Katz Owner Seeks Demo Permit After Redevelopment Plan Denied

(Updated July 1: The City Council voted 9-2 to reconsider the Katz redevelopment project and send it back to committee at the request of the proposal’s sponsor City Councilwoman Katheryn Shields.

Shields said Councilman Eric Bunch, who sponsored the amendment to reduce the proposal’s property tax abatement and add a requirement for affordable housing and free public parking, agreed to support the reconsideration.

“I’m happy to have this go back and have further discussion to see if we can come to an agreement on the project moving forward,” Bunch said.

‘I’ve stated I support the project but it’s got to be the right deal for the city and the taxing jurisdictions and for those reasons I’m willing to have a good conversation and hopefully the committee will have another robust conversation as well.”)

By Kevin Collison

Stung by the City Council’s rejection last week of a plan to save the historic Katz Drugstore as part of an apartment project, the building owner has applied for a demolition permit from the city.

The application was filed on behalf of Redeemer Fellowship church, the owner of the iconic building at Westport and Main, with the City Historic Preservation Commission, the agency that reviews requests to alter or raze buildings designated as local landmarks.

And while the Preservation Commission is not expected to approve the request, it does start a three-year clock after which the owner can demolish the building automatically if it still chooses.

“We really don’t want to demolish the building, that’s not our hope,” said Doug Stone, the attorney representing Redeemer Fellowship, “but based on the Council meeting, it’s lessened the likelihood of it being preserved.

“If the city and developer can’t put a deal together that makes financial sense, you can’t blame us.

“My owner’s (Redeemer Fellowship) mission is not to restore historic buildings. We need a partner and if the partner can’t work with the city productively, i don’t know what the alternative is.”

The Katz apartment project planned to use the rooftop of the historic drugstore for a pool and other resident amenities. (Rendering from Hoefer Welker)

The move to seek demolition could put pressure on the Council to reconsider the Katz redevelopment plan, although it’s uncertain if the developer, Lux Living, is still willing to pursue the project.

The developer could not be reached immediately for comment.

Lux Living had been seeking a 15-year property tax abatement, 10 years at 75 percent, five years at 50 percent, to help finance its plan to renovate the historic Katz building and build a 192-unit, six-story apartment project behind it.

The $50- $70 million redevelopment plan had the support of Historic Kansas City, the city’s premier preservation group, because it saved the Katz Drugstore, a landmark at the corner since 1934. It also was supported by neighborhood groups.

That proposal had been endorsed by the Council Neighborhood, Planning and Development Committee.

But at the full Council meeting last week, an amendment was added by Councilman Eric Bunch, whose district includes Katz, that the developer said undermined the economics of the deal.

As expected, Bunch’s amendment reduced the abatement to 10 years at 75 percent, an amount suggested in a city consultant’s report.

But in a surprise move, the Bunch amendment added what were described as “poison pill” changes including an affordable housing set aside and free public parking. The amendment was approved 7-6 by the Council.

The apartment building planned by Lux Living would have replaced the parking lot behind the Katz Drugstore.

The developer, through his attorney, said the amendment would make the project financially unfeasible and asked the Council to reject the entire deal. The Council then unanimously voted to deny it.

At the meeting, Councilwoman Katheryn Shields, whose district also includes Katz, noted the project had been submitted before the city had adopted new requirements for affordable housing and would have been exempted anyway as a historic rehab project.

“This amendment violates this policy,” she said. “This was filled clearly before the new ordinance. Most historic buildings saved in KC were saved due to local incentives on top of state or historic tax credits.”

Stone said the church believes its unlikely that any developer will want to renovate the Katz building as a stand alone project. He also said the tax incentives in the Lux Living apartment proposal would have gone solely to help renovate the old building.

The development plan called for the Katz building to be renovated and reused to provide amenities for the apartment residents including a rooftop swimming pool and fitness center. About 5,000 square feet would be used for a coffee shop open to the public.

“We love the Katz building and a redevelopment can’t happen without help from the city and they basically said ‘no,'” Stone said.