No-Tell Hotel

Alice Everest has been a proud Eagle for thirty years, and like the most dedicated of her compatriots, she wears that pride on her chest. Specifically, she wears a brown shirt that’s emblazoned with an eagle. Her earrings have eagles on them, too. Beads hang from the eagle-rings.

It’s an unimaginably sweltering August afternoon, and Everest does her best to cool off in downtown Kansas City, where the Fraternal Order of Eagles has landed for its 2002 convention. More than 4,000 American and Canadian Eagles have descended on the four-block area surrounding Bartle Hall, swooping into rooms at the Marriott, Holiday Inn and Doubletree hotels.

As a class, they are old, white and patriotically overweight. They move slowly, limping along or carefully driving motorized chairs. They’re a smiling bunch, a possible byproduct of karma. Each year, the Eagles raise thousands of dollars for charities. Kidney research. Cancer organizations. Children’s funds. And their influence doesn’t stop there. Among other things, the group can be thanked for the invention of Mother’s Day.

Hallmark owes the Eagles a special debt of gratitude for that.

A few days into the convention, Everest and thirty or so other Eagles collect in the shade of a convention-center overpass to wait for a shuttle that will ferry them on a tour of local lodges. Three elderly women walk by dressed in white gowns. “They just got done with ritual auxiliary,” Everest explains to a curious non-Eagle. The women look tired. Everest says they’ve spent the afternoon answering questions and performing tasks for a panel, which grades them on their formalized responses. “You have to say everything word for word, comma for comma, period for period,” Everest says adamantly. “And they judge you on it.”

Everest, a resident of Portland, Oregon, has been going to these annual meetings for years, so she knows about convention towns. A city’s worth, she says, depends on a few key things. “It’s how close you’re staying to the convention, the entertainment they have and the prices. The Eagles are working people, and we don’t have the big bucks.”

Last night, the Eagles were entertained by the Smothers brothers, and this afternoon they heard a keynote speech by Vicki Lawrence, who played the title character of the TV show “Mama’s Family.” So far, so good on entertainment.

But Everest has heard complaints about the Holiday Inn, about mildew in the showers and rooms without air conditioning. On Sunday morning, Everest and friends walked from the Marriott to Denny’s for breakfast. They expected a quick, easy jaunt. “We didn’t know we were going to have to cross the interstate,” she says. It felt like danger.

This feedback is important, because the Eagles are a migratory bunch. Three years ago, their convention sent them to Louisville, Kentucky. The next year it was Ontario, Canada. Last year, before Kansas City sang the call of the Eagle, they went to Nashville, Tennessee.

The song? Cha-ching, cha-ching, cha-ching.

During their weeklong convention, the Eagles will pump more than $2.8 million into Kansas City, staying in hotels, eating at restaurants, visiting landmarks and leaving a trail of sales tax everywhere they go. Within their own little philanthropic world, the Eagles will create a bubble in the Kansas City economy. Even downtown hot dog venders will line up around the convention center to cater to their needs. Jumbo dogs fetch $2.50 apiece. Gatorades go for $2.

And that’s just for the Eagles. The next week, it’s a veterinary conference. In a few weeks, the International Association of Fire Chiefs. In September, a rodeo expo comes to town. A few months down the road, “I Still Do — A Life-Changing Conference for Couples” swings through.

Based on the endless rotation of conventions, Kansas City leaders have long operated on the belief that the area’s convention business can always use more hotel rooms. More hotel rooms equals bigger conventions, and bigger conventions equals millions of out-of-town bucks. Even The Kansas City Star has adopted this mantra, citing in a recent editorial the city’s ever-present need for “more hotel rooms downtown to attract more conventions and free-spending visitors.”

So when the city received an offer for 225 more hotel rooms last week, it seemed like a great deal. Developer Ron Jury had offered to restore the historic President Hotel at 14th and Baltimore. For $14.5 million in subsidies, he argued, city council members would not only address the convention center’s constant need for more hotel rooms but also help bring back a Kansas City treasure. What’s more, Jury promised his project would lead to more apartments and shops downtown.

The plan had one major opponent: Andi Udris, the head of Kansas City’s Economic Development Corporation and the man hired last summer to lead a downtown revival.

After taking office a year ago this month, Udris had investigated the root of Kansas City’s downtown problem. First, he’d come up with a hypothesis: Downtown was boring. Then he’d developed a philosophy on how to address that problem: Make downtown interesting again. Based on that plan, Udris had urged city leaders to visualize a downtown entertainment district. Restaurants, nightclubs, that sort of thing. He’d explained that with the right public investments, such an area could spur hotel growth naturally. He’d warned that with the wrong public investments, existing hotels could suffer. On July 10, he told city council members to take a pass on the President Hotel, to set priorities for how it invests money downtown and to believe in his philosophy.

They ignored him.

Andi Udris arrived in town torn in half by two Ohio cities. The first, Cleveland, hailed him as a hero. The second, Cincinnati, sent him packing with the lingering nickname “Andi Useless.”

As Cleveland’s director of economic development from 1981 to 1988, Udris led that city through a downtown revival to be envied by cities nationwide. To outsiders, the city’s most notable improvement was Jacobs Field, the lauded revivalist home of the Cleveland Indians. The true success, however, was a piecemeal project that revived a dormant downtown. “We created an entertainment district, first of all, which was the Flats,” Udris recalls. “That became a major regional entertainment district. We started with five restaurants, and now I think there are, like, fifty. It became the place in the region where people go.” Urban loft dwellers followed. Now, it’s as if Cleveland packed the best parts of Westport, the City Market, the Plaza and the suburbs into one district.

Udris hopes to bring a similar atmosphere to Kansas City. Not only is he talking about nightlife downtown, but he has also proposed an annual Oktoberfest celebration to mirror Cincinnati’s massively successful and lucrative keg party. In short, Udris wants Kansas City to rock out. For downtown, he sees the city’s $300 million performing arts center project as the perfect start to a nightlife renaissance. Restaurants, nightclubs, that sort of thing.

But he’ll have to avoid the snake pit he fell into in Cincinnati.

Five years after he left public service in Cleveland, Udris took a job doing the same thing 240 miles south. Once again, city leaders hired Udris to revamp the struggling downtown of a second-tier city. But as Udris’ tenure wore on, criticism escalated. Local developers felt snubbed when Udris thought about bringing in a riverfront developer from Indianapolis, and they complained to the media. Too little was happening. Communication was lacking. Udris could get things going, sure, but he was lazy with details and couldn’t carry projects through. Udris’ ambitious riverfront plan collapsed when the Cincinnati city council dropped support for the idea.

In Cincinnati, he also faced a challenge well-known to Kansas City: competition across a state line. While Cincinnati leaders continually balked on ideas, opting to study and restudy and then study again, northern Kentucky jumped on project after project and built a riverfront development that stared down Cincinnati from across the Ohio River.

Though his Cincinnati numbers were impressive — $800 million in private investments based on $80 million in public subsidies — Udris had nothing like the Flats or Jacob’s Field to show for his efforts. Eight months after the riverfront failure, Udris resigned amid harsh criticism and took an executive position with Hofbräuhaus, a Munich-based beer hall looking to expand to the United States. For more than a year, Udris worked on opening the German company’s first pub in the Cincinnati area. Public service, it seemed, was in his past.

Until Kansas City came calling. Shortly after she took office, Mayor Kay Barnes ousted Economic Development Corporation chief Mark Bunnell (with whom she’d reportedly clashed when she’d been a member of the tax-increment financing commission). Barnes headed up a selection committee that pegged Udris as the city’s new downtown wünderkind. In August 2001, Udris arrived in Kansas City and began working himself into the establishment. By late last winter, he had become a voice on the mayor’s new Greater Downtown Development Authority, a collection of A-list bureaucrats and business bigwigs charged with revitalizing downtown. He embraced the city’s visionary plan for a performing-arts center and used it as a springboard for a first-class entertainment district.The Udris strategy: Pump taxpayer subsidies into the sort of business-by-business growth that had produced the Flats in Cleveland. That way, the city’s investment serves (and profits from) visiting conventioneers and residents alike. “An entertainment or performing-arts district is maintained substantially by the local residents first,” Udris says. “Having a place for the symphony and ballet and all these things are normal assets for cities our size. The conventioneers add the extra bonus.”

For a while, it looked as though city leaders agreed. The mayor had pushed for more downtown housing. And the performing-arts center project continued to gain speed with the support of Kansas City’s powerful private foundations.

Then along came the President Hotel.

Udris studied the plan as it was submitted to the TIF commission, a city entity within the Economic Development Corporation, which Udris oversees. Last fall, developer Ron Jury offered a four-phase plan for the blocks around 14th and Baltimore. First he would renovate the President into an upscale hotel. In later phases, he suggested an adjacent parking garage and a city block of new commercial and residential real estate. For this, he’d asked the city to contribute more than $14 million in TIF — a third of the project’s total cost — with a considerable amount of the remaining investment coming from state and federal tax credits.

After researching the plan, Udris thought it sucked. Never mind what he saw as Jury’s shaky numbers (see “Math Whizzes,”) — the plan stood to harm existing hotels, particularly the Phillips, at 12th and Baltimore. Two years ago, the city contributed $7 million in TIF for the renovation of that 214-room hotel. So far, the Phillips hasn’t made enough money to meet its projections. And the problem doesn’t stop with the Phillips. Udris noticed that the entire downtown hotel industry had been experiencing a decline in business. The President plan just didn’t make sense, at least not now.

“[The President Hotel developers] asked us to provide subsidies far beyond what have been asked in the past, particularly on the Phillips Hotel, which was the last deal the city agreed to,” Udris says. “And that’s why we gave the extra scrutiny, because we were very concerned that the Phillips and this hotel were going to go head to head. And if the Phillips is already not achieving their desired results, why are we adding more hotel rooms? So that’s where we came back and said maybe we should be looking at other kinds of investments that will get that demand up and thereby not require as much city subsidy.”

Before Udris slammed the President plan, he had spoken with the city’s convention planners. What he learned called into question more than a decade of city thinking.

Kansas City didn’t need more hotel rooms; it needed something to do. “When you survey the Convention and Visitors Bureau, they’ll tell you the area around the convention center is the bigger problem,” Udris says. “Now, some would argue that fixing up the President Hotel immediately addresses that by cleaning up and tearing down the ugly buildings around it. But I don’t think putting up a surface parking lot solves that problem. I’d like to see the developer get phase two underway, build that housing and retail that he’s going to propose. But the point is, I think creating an entertainment and performing-arts district is the bigger priority.”

In July, Udris told TIF commissioners to withdraw their support of the President Hotel plan. He considered its approval bad public policy.

This caused headaches at City Hall. The mayor was worried about losing an opportunity to build more apartments downtown. Nobody wanted to miss a chance to restore the President. But they’d hired Andi Udris to give them good advice.

Within weeks, the mayor summoned a special committee of city council members to intercede before the TIF commission dropped Jury’s plan altogether. This hotel committee took over from there, overseeing negotiations to limit the city’s risk and place more financial responsibility on Jury if the project did not live up to his projections.

But the Hotel Committee never addressed Udris’ concerns about the need for activity and the potential threat to existing hotels.

Those who know say the city should have listened.

This summer, Jeff Eastman stood outside the downtown Doubletree Hotel with a meeting planner who had brought her convention to Kansas City. It was lunchtime, and the planner needed somewhere to eat. Naturally, she asked Eastman, the marketing director for the Kansas City Convention and Visitors Bureau, for suggestions.Eastman pulled out a list. “It’s not like in other cities where you can stand and point,” Eastman says. “We have to get out the list.”

Eastman knows how important hotel-room statistics are in the absurdly competitive convention industry. So, as a CVB staffer, he’s required to say that Kansas City could always use more hotel rooms — to keep up not just with Indianapolis and St. Louis but with Omaha, Tulsa and Des Moines.

Kansas City’s main problems lie elsewhere, though — specifically with the convention center’s wimpy ballroom and the lack of activity in the area. “I don’t think [a lack of] more hotel rooms is hurting business that much,” Eastman says. “I think it’s the ballroom, and I think it’s the condition of downtown.”

Convention business is a forward-thinking enterprise. Meeting planners across the country already have conventions planned through 2005. Cities are really competing for conventions around 2006 and beyond.

Ron Jury plans to open the President Hotel in late 2003, an estimate almost everyone considers ambitious. But even if the President reopened in 2004, that year’s convention business is already in place, so a new hotel could create tension. “We’re going to be competing for the same people,” says Tina Harlow, general manager of the Phillips Hotel.

Harlow wants everyone to know that she’s for downtown development, even if that means a direct competitor. “But I think timing is crucial,” she says. “I think the Convention and Visitors Bureau needs to make promises, and I understand that. But it’s sort of feast or famine down here.”

Harlow, who took over the Phillips in April after three years at a Houston hotel and spa, hopes to improve business. But in the meantime, she’s seeing the President development team present questionable numbers. Although downtown hotel numbers show a decline in business, Jury has presented studies showing an increase in occupancy. “When you start throwing numbers around, somebody should be intelligent enough to ask where those numbers are coming from,” Harlow says.

They’re not coming from the Phillips. Jury’s consultant submitted studies to the city — but they didn’t include the Phillips’ performance. The studies do include Crown Center, however, where occupancy is routinely stronger than downtown. And that’s misleading.

“Crown Center is not downtown,” says Jeff Marvel, a national hotel consultant. “They try to say it’s downtown, but it’s not downtown.”

Marvel isn’t talking about just the President developers but almost all developers who have sought subsidies for downtown hotel projects. He should know. One of the country’s leading hotel analysts, Marvel has spent the past thirty years studying hotels from Miami to Los Angeles. But he’s particularly knowledgeable about Kansas City, where he has an office on the Plaza. When it comes to downtown Kansas City, Marvel hasn’t been afraid to say that a project won’t work — even if it might cost him business in the future. In the early 1990s, for example, he told city leaders to back off a hotel project submitted by the family of former presidential candidate Ross Perot. After nearly a decade of arguing over the project, the city finally took Marvel’s advice.

Downtown Kansas City is a tricky area for development, Marvel says, especially when it comes to risky ventures involving hotel real estate. Such projects frequently turn into a tug-of-war between the city and developers over subsidies. Marvel cites as examples the restoration of the Muehlebach and Americana hotels. For the first, Marvel says, the city signed off on a good deal that eventually got the Marriott chain interested in downtown. With the Americana (now the Doubletree), he says the city got screwed. “The developers just took a lot of money from the city,” he says. “It’s still better, though. It’s not boarded up.”

Marvel won’t say as much for the President Hotel. He considers the costs of the current project too high and the amount of subsidies excessive. But it’s not just Jury’s plan that makes Marvel nervous about the President. “I have done three feasibility studies on it over the years,” he says. The result? Thumbs down each time.

To understand the challenge downtown, Marvel says, it’s important to know how Kansas City got so bad. In the ’40s and ’50s, downtown Kansas City was a major meeting destination. Back then, Marvel’s Chicago-based mentor, Gene Lott, would ride the train into Union Station on a Saturday morning, conduct hotel business during the day and party on 12th Street that night. On Sunday, he caught the train back home. He never traveled south of Union Station.But in the decades that followed, the Country Club Plaza, urban sprawl and Crown Center each contributed to a commercial exodus from downtown. The convention industry grew more competitive, too. National and regional associations booking their meetings were able to demand just about anything they wanted. More meeting space. More exhibit space. More hotel rooms. “It got so competitive in the industry that cities would give away the space to get business,” says Marvel, who watched Kansas City’s downtown hotels suffer in the process.

Even with the construction of Bartle Hall in 1976 and its expansion in 1994, Kansas City couldn’t gain an advantage over rival cities that were always willing to go a bit further for Shriners, boat lovers and the Future Farmers of America. Even with a major convention center, convention business didn’t support the hotels.

In the past decade, the city has subsidized three hotel projects — the Muehlebach, the Americana and the Phillips — to increase the number of rooms by more than 1,000. Still, city council members continue to hear reports that there’s no such thing as too many hotel rooms.

Why? Because that’s what the Convention and Visitor’s Bureau has told them. Why? Because that’s what the CVB is supposed to say. Why? Because the convention industry is without limits.

Even though independent experts say the President could harm the downtown market, the city moves forward anyway.

“Certainly, if the President happened it would be directly competitive with the investment the city made with the Phillips,” Marvel says, although no one in power seems to care.

No one but Udris.

As he points out, the President may perform fantastically. That is not the issue. “The question is: Can all these hotel rooms survive given the current market?” Udris says. “It’s one thing to build them. It’s another for them to remain profitable and to keep the money in their businesses to reinvest. If there’s not enough money, then what you’re going to start seeing is decline in the maintenance and service levels. That can have just as bad of an impact on your convention business, because what people don’t want to see is ratty, poor-service hotels.”

Yet after all his objections, Udris may be the person most responsible for the President plan’s approval.

At the July 11 TIF hearing, Udris broadsided Jury and Jury’s attorney, David Fenley, by bashing the plan in front of a commission that had given them preliminary approval last fall.The hearing marked a turning point in the commission’s history. Both the city council and the city auditor’s office had pressured the commission to be more judicious in the TIF spending it recommended to the city. Whether the victim of bad timing or his own shoddy plan (or both), Jury sat and watched as first Udris and then TIF chairman Peter Yelorda ripped into his lawyer (“Legal Vacancy,” July 18).

Udris not only rejected the President Hotel plan but also suggested another fate for the long-vacant building: demolition.

Udris hadn’t just pulled that idea from his mustache. Since moving to Kansas City, Udris had embraced the Sasaki Plan as a blueprint for downtown growth. The plan, with its maps and recommendations for saving downtown, had been created by the Massachusetts-based consulting company Sasaki Associates, at the behest of the Civic Council (a group of Kansas City’s top CEOs). It had been hailed by business leaders at the Chamber of Commerce as well as by Mayor Barnes and other City Hall insiders. Because the city has no official policy regarding downtown development and no strategy for how and where to spend taxpayer money, Udris seized the Sasaki Plan — which focused precisely on downtown — as a guide.

That the Sasaki Plan called for an urban park where the President now stands shouldn’t have come as a surprise to anyone. The widely distributed document has been in the public view for more than a year. Yet when Udris reminded the hotel committee that the Sasaki Plan called for the President to be torn down, everybody seemed shocked.

At the next hearing, on July 19, preservationists joined the throng of lawyers and consultants arguing in favor of the President plan. Developer Jury astutely played on their support. “To think that anyone would suggest the President Hotel should be torn down and made into a park is beyond my understanding,” he told the committee. “This position reflects a different agenda other than the revitalization of downtown Kansas City.”

Udris had stumbled. In an attempt to persuade the city to drop its financing for the hotel, he had unwittingly turned the discussion into a black-and-white issue: Approve the plan, and the President gets saved; reject it, and Kansas City loses its history.

Jane Flynn, a leader in Kansas City’s preservation community, had spent this spring battling David Fenley’s plan to tear down the 77-year-old Park Lane apartment building so he could and use TIF money to build new Plaza offices for his law firm (“Truce or Consequences,” March 7). Now she was Fenley’s ally, defending a developer who wanted to use TIF money to keep the President standing.

Jury now had preservationists coming to his rescue. “I’m tremendously supportive of what this man is doing,” says Flynn. “We have a developer who is as sensitive as Ron Jury is, and we have to start carving him up into little pieces? To me, that’s sickening.”

Flynn and other preservationists made their presence known at the July 19 hearing. Their support did wonders. By the time the hotel committee voted last week, council members were gushing over Jury’s bid to save the Kansas City landmark. They didn’t even mention Udris’ concerns about the Phillips Hotel.

“In my mind, the overriding issue was the historical significance of the Hotel President,” Councilman Evert Asjes told his colleagues on the council’s finance and audit committee.

Councilman Paul Danaher reminisced about his time as an elevator operator at the President and lauded Jury for saving his old workplace. “I firmly believe this is going to be a success downtown,” he said. “I look forward to its opening.”

Councilman Alvin Brooks also waxed nostalgic. Even though he admitted to unpleasant memories of the hotel’s original policy of segregation and wondered whether a visit by former President Richard Nixon was really worth celebrating, Brooks sounded ebullient about the plan. “I’m very happy to see this moving forward,” he said.

Udris, meanwhile, downplays his role as the President’s accidental savior.

“The President Hotel is very clearly a Kansas City landmark. You could never replace it,” Udris says. “The question is: How much do you want to spend for historic preservation?”

To save the President, the city will pump more money into the project than any other investor, put a competing hotel at risk, disregard the city’s only semblance of a downtown redevelopment strategy and ignore the man hired to lead Kansas City on such decisions.

But it will save a building. And though 225 upscale hotel rooms means little to the average Kansas Citian, it’s an improvement that will no doubt be appreciated by the more luxury-minded members of the Association of Rotational Molders, the National Association of Farm Broadcasters and the Weed Science Society of America.