Hyatt House Hotel Wins Incentive Approval, Work to Begin This Spring

By Kevin Collison

Construction of a 13-story Hyatt House hotel on a parking lot at Ninth and Broadway is expected to begin this spring after its Colorado developer was approved for incentives last week–but not before a two-hour debate by the development agency involved.

Boulder-based Pedersen Development won approval for a 15-year property tax break, 10 years at 100 percent, five years at 37.5 percent, from the Land Clearance for Redevelopment Authority. The project also was grant a sales tax exemption on building materials.

But while the LCRA’s consultant, SB Friedman, confirmed the incentive package was necessary to make the $38 million project financially viable, board members were uncomfortable being asked to help the development.

Chairman Steven Hamilton said his agency would prefer to utilize tax incentives to help attract projects to impoverished areas on Kansas City’s East Side, particularly affordable housing.

However, there were no such projects on the LCRA agenda last week.

Developer Scott Pedersen said his firm has pursued the project for more than a year and followed the city economic development review process.

The hotel site, at the southwest corner of Ninth and Broadway, is located in distressed census tract established by the city which automatically qualified it for a 100 percent, 10 year abatement.

“I feel we’re caught in the middle of a policy discussion,” he said.

Pedersen Development plans to build its hotel on the vacant lot next to the “Google Fiber” building it purchased at 908 Broadway. (Image form Google Maps)

Roxsen Koch, the attorney for the developer, said there had been no new commercial construction along that stretch of Broadway in two decades. The parking lot where the hotel will be built is currently paying $52 annually in property taxes.

“We think it’s a special hotel site for this part of the downtown core,” Pedersen said. “It’s five blocks from the convention center and when the (Loews) convention hotel opens, it will lead to more demand for hotel rooms.”

The planned Hyatt House will be an extended stay hotel, with many rooms including a kitchenette. It also will included a rooftop bar and restaurant, and Pedersen said the Roasterie plans to open a coffee shop and roasting operation on the first floor.

The development also will include a 48-stall mechanical garage on its west side. The parking will serve the “Google Fiber” office building at 908 Broadway and replace the spaces lost due to the hotel development.

The hotel project itself will not include parking, instead valet parking will be provided guests by using spaces in existing nearby garages.

Pedersen also told the LCRA board the hotel has arranged to set up an internship program with high school students at the Crossroads Prep charter school across the street in hotel and restaurant management.

The Hyatt House plan was supported by the Kansas City Economic Development Corp.

“It’s an attractive building on an urban site in a gateway to our city,” said Greg Flisram, senior vice president of Re/Development for the EDC.

During their deliberations, LCRA board members discussed alternative property tax abatement formulas for the project, but in the end the board voted unanimously to approved the original plan.

The hotel is expected to create 40 permanent jobs and 100 construction jobs. It’s scheduled to open in June 2020.