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Developer Dan Clothier Planning $38 million Hotel and
 Garage in Kansas City's Central Business District

By Kevin Collison, The Kansas City Star, Mo.McClatchy-Tribune Regional News

Aug. 4, 2007--The developer of the historic Freight House building, home of three upscale restaurants, wants to complete his original plan by building a 21-story hotel and garage nearby.

Dan Clothier said a hotel was part of the draft redevelopment concept when the 120-year-old Freight House was renovated 10 years ago. The brick landmark at 101 W. 22nd St. in the heart of the Crossroads Arts District now houses City Tavern, which Clothier owns, as well as Lidia's Kansas City and Fiorella's Jack Stack Barbecue.

"We withdrew the hotel mainly because we had some trepidation about the future of the market in Kansas City at that time," Clothier said Friday. "The first quarter of last year we saw an uptick in hotel occupancy and decided to dust off our plans."

The proposed hotel would be east of the Freight House and face the Main Street viaduct. The hotel would have its entrance on Main, and the 260-space garage would have access both from Main and the surface parking lot that serves the Freight House restaurants.

The plan calls for an 18-story hotel tower atop a three-level garage. The tower would accommodate up to 200 hotel rooms or a combination of 160 hotel rooms and 25 residential condominiums.

No restaurant would be included in the hotel, and in fact one of the hoped-for outcomes would be bringing additional business to the nearby Freight House restaurants. Clothier said new business would be helpful as the Freight House establishments prepare for new rivals in the Power & Light District being built downtown.

"With all the new projects coming to Kansas City's central business district, the Freight House restaurants will have to fight hard to remain viable in the face of increased competition," he said.

A rezoning request is to be considered Aug. 21 by the City Plan Commission for the $38 million proposal. The developer also is asking for the Freight House to be divided into three units to allow each restaurant to own and manage its property, and form a condominium association.

Clothier plans to maintain ownership of City Tavern and develop the proposed hotel and garage. He plans to seek tax increment financing for the garage, which is expected to cost $8 million to $9 million. TIF allows a developer to divert part of the net new taxes generated by a project to reimburse the extraordinary costs.

In seeking TIF, Clothier acknowledged he was in controversial territory but said it would be a "pay as you go" plan in which he would assume all the risk in repaying the financing. The city's tax incentive policies are currently the subject of a review ordered by Mayor Mark Funkhouser.

Clothier's plan calls for the existing TIF plan to be used to help renovate the Freight House, known as the 22nd and Main TIF, to be extended 10 years beyond its 2020 expiration date to assist the hotel's garage, and also use some of the new revenues expected to be generated by the hotel itself.

The TIF currently generates $200,000 annually in net new revenues for local governments after covering the TIF costs, he said.

The developer said the proposed hotel should not be a cause for concern for advocates of a new convention center hotel.

A study has recommended that a 1,000-room hotel be built in the next few years near Bartle Hall. There have been concerns that continuing to subsidize the construction of smaller hotels downtown would make that goal more difficult.

Clothier said his project would be a milelong walk from the convention center. He also said it was not seeking new tax increment assistance, but only extending the original Freight House TIF.

Bill Lucas, president of Crown Center Redevelopment and chairman of a Kansas City Convention & Visitors Association task force examining the issue of a new 1,000-room convention center hotel, challenged Clothier's proposal, saying it would not help attract more business to the community. Crown Center is home to the Westin Crown Center and the Hyatt Regency Crown Center.

"I feel fairly certain the (visitors association) and Hotel-Motel Association would be opposed to a further TIF," Lucas said. "If we do anything, it should be supporting something that moves the dial here, and this doesn't create demand. As long as it's not creating new demand, it takes away from others."

Clothier envisions the proposed hotel as an extended-stay operation similar to a Resi dence Inn or Homestead Suites that would serve guests coming to such nearby facilities as the Federal Reserve Bank of Kansas City and the new Internal Revenue Service Processing Center on West Pershing Road, or tourists to Liberty Memorial and Union Station.

Should the rezoning move forward, Clothier plans to seek a co-developer for the project and would like to submit an application to the TIF Commission this winter. An operator and final concept also would be identified by then. The project architect is Shaw Hofstra + Associates.

To reach Kevin Collison, call 816-234-4289 or send e-mail to kcollison@kcstar.com.

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To see more of The Kansas City Star, or to subscribe to the newspaper, go to http://www.kansascity.com.

Copyright (c) 2007, The Kansas City Star, Mo.

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