Law of Demand

For more than twenty years, the Law Building rotted on the corner of 12th and Grand while members of the Downtown Council, a consortium of business owners, tried to buy the property. But its owner, a Californian named Robert Lipson, declined their offers. In 2001 they tried to have it condemned and destroyed.

They sought help from the Public Improvements Advisory Committee, a group of citizens chosen by City Council members to prioritize capital-improvement projects. The Downtown Council asked PIAC for $500,000 a year over five years to blast crumbling, abandoned buildings out of the Kansas City skyline — starting with the Law Building.

But PIAC members — who typically fund construction, not destruction — declined.

Then Matthew J. Abbott, a twentysomething from Quincy, Illinois, snuck into town and did what Kansas City’s most powerful developers couldn’t: He bought the Law Building.

Members of the Downtown Council were thrilled, telling the Kansas City Star that “no effort would be spared to help him.” But they were unwilling to give Abbott the time they had enjoyed in their failed efforts. The fix shouldn’t “take more than a few months to prove out,” Downtown Council Chairman John Laney told the Star last year. “Without that, we return to the demolition course.”

Abbott spent $1 million of his own money to buy the building and fix it up enough to get it off the city’s dangerous-buildings list. Then he sought $8 million to transform the decrepit structure into stately law offices with street-level stores.

He turned to Kansas City banks — particularly the ones with downtown property holdings that presumably had an interest in resuscitating the corner. But no local financial institution would back him.

Abbott got a federal loan for $150,000, a ten-year partial tax abatement and a $25,000 grant to repair the facade. Then he asked PIAC for money to fix the sidewalk. Twelfth and Grand is one of downtown’s rattiest corners, with a vandalized bus stop, broken curbs and a layer of grime from the people and pigeons who loiter there.

PIAC members offered $250,000. Abbott is the kind of underdog PIAC members like to support. The body was created to allow owners of homes and businesses — who might not be politically connected but who have made personally significant investments in the city — to have a say over how city funds are spent. For much of the city’s history, capital-improvement dollars were traded back and forth among politicians to fund pet projects and bolster political capital. PIAC brings this exchange into the open to empower common taxpayers.

In early August, Abbott finally scored the loan he needed — from a bank in St. Louis. The financing was part of a precarious package that would fall apart if PIAC’s pledge of $250,000 fell through.

So PIAC members were dismayed to learn last week that downtown-development leaders and Mayor Kay Barnes wanted them to shift the $250,000 away from the Law Building’s corner to 909 Walnut, site of the 35-story, double-spired Fidelity Bank & Trust Building.

At Ninth and Walnut, two Dallas developers — Simbol Commercial and Housing Horizons LLC — want to put in office and retail space, 180 luxury apartments and a couple of penthouse condos. The latter developer is a subsidiary of Kimberly-Clark. The Kleenex-making megacorporation has entered the real-estate business over the last several years, and Kansas City leaders have been so eager to welcome it that the Dallas developers won’t have to pay any property tax for 25 years.

Council members had to skirt city policy to make the gift possible. Typically, developers only get full tax abatement for ten years, followed by fifteen years of 50 percent abatement. City regulations only allow full 25-year abatements to assist development of affordable housing, not the sumptuous variety that’ll be offered at 909 Walnut.

“This is a big deal for downtown,” says Glenn Solomon, principal for Simbol Commercial, who adds that such subsidies are vital for large-scale urban-redevelopment projects because their costs are formidable. “Nobody is getting rich on this.”

PIAC members disagreed — to them, it seemed to be a case of the city robbing the poor to help the rich.

But Solomon says his project doesn’t even need the $250,000 to go forward. If Abbott had asked, Solomon says, “We would have backed off.”

That didn’t happen, though. The request went to PIAC on August 8, and the committee’s indignant reaction has further widened the division among the citizen committee, the development community and the City Planning Department.

“I think it’s despicable,” PIAC member Lou Austin crowed at the meeting. “There’s a lot of sordid history to this deal.”

The request to shift the funds had been made by Andi Udris, president of the Economic Development Corporation, a nonprofit that receives city funds to attract and retain businesses in Kansas City. At the PIAC meeting, EDC staffer Missy Wilson tried to convince PIAC members that they weren’t taking funds from the Law Building. Instead, they were correcting an error in which duplicate funds had been allocated for the corner of 12th and Grand.

Abbott’s project, Wilson explained, could be paid for with money from a $35 million bond issue that voters approved last fall (“Money Changes Everything,” July 25, 2002). Last spring, PIAC agreed to put $2.5 million of that money into streetscape improvements along 12th Street.

But PIAC members figured out that these duplicate funds existed only in concept.

Vicki Noteis, the city’s director of planning, concurs with this assessment. “What [EDC is] arguing is that it could be shifted,” she tells the Pitch. “We don’t know that yet, because we haven’t designed [the street improvements] yet.”

“She has some other agenda,” Udris scoffs. He says the plan to switch the funds came out of a private meeting he had in early August with Noteis and the mayor. There, he says, Noteis told him the city could easily fund the entire 12th and Grand sidewalk-improvement scheme. He says he even offered Abbott a letter of commitment to satisfy the lenders.

Everyone agrees, though, that politics have fueled the dispute — not the politics of alliances, but the politics of style.

While downtown leaders set their sights on whopper projects with big-time developers, PIAC plods along by funding dozens of tiny projects for run-of-the-mill Kansas Citians.

On August 8, PIAC rejected EDC’s request, which left both sides spewing.

“There’s something out there, and it’s alive, and it wants money,” Austin said before joining his colleagues in the unanimous vote. “Had [Andi Udris] gotten his way, [the Law Building project] would have died.”

“The order of the day was to punish the evil Economic Development Corporation,” Udris says.

But the pissing match has left Solomon — developer of the coveted 909 Walnut project and, it is hoped, more downtown projects — feeling sour.

“We need the support of PIAC and the city and the EDC,” he says. “We do not need to have everybody getting caught up in the middle of a political battle.”