From The Kansas City Business Journal
By Rob Roberts
he development firm working on $125 million of new apartment construction at three Downtown area locations needed another $1 million public boost for one of those projects.
The Planned Industrial Expansion Authority board provided it Thursday, approving industrial revenue bond financing for Cityscape Residential’s 221-unit Crossroads West project southeast of Interstate 35 and Southwest Boulevard. The IRBs will provide the developers with a sales tax exemption on building materials, which will mean $1 million in savings, Cityscape Principal Jim Thomas said.
It’s not a huge amount, Thomas told the PIEA board, but it will be enough to attract the lender and equity investment needed to finance the project.
In August, the PIEA board approved 25-year property tax abatements for Crossroads West and two Cityscape projects on Quality Hill: the 130-unit Apex on Quality Hill project near 10th and Jefferson streets and the 258-unit Summit on Quality Hill project near 12th and Pennsylvania streets.
The Quality Hill projects' abatements will average 50 percent over 25 years — 20 percentage points less than the Crossroads West abatement average of 70 percent.
But the Quality Hill projects were still able to attract the necessary debt and equity, Thomas said.
“The good news is those projects are moving forward,” said Roxsen Koch, a Polsinelli PC attorney representing Cityscape. She said the developers were “looking to close at the end of the month,” with groundbreaking to follow in April.
Thomas said lenders and equity investors have been more reluctant to support development on the Crossroads West site, which he has called “the hardest site I’ve ever worked on in 25 years.”
That project will require demolition of two vacant structures, utility easement relocations and building around two billboard easements and a West Pennway flyover. Cityscape also had to purchase another billboard easement “at a substantial acquisition price,” Koch said.
In exchange for obtaining the upfront savings for the project via the sales tax exemption on building materials, Koch said, Cityscape agreed to sacrifice the final year of its 25-year abatement.
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