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Bringing multifamily downtown: NorthPoint’s Power & Light plan

When Cordish Co. dropped its contract on the Power & Light Building in December 2012, Nathaniel Hagedorn of then one-year-old NorthPoint Development saw an opening. His purchase of the building would be the fifth time redevelopment of the 80-year old building went under contract.

Nathaniel Hagedorn calls the building's lobby one of the finest art deco spaces in the country.

Nathaniel Hagedorn calls the building’s lobby one of the finest art deco spaces in the country.

One email later, and NorthPoint VP of Operations Mark Pomerenke was drawing up plans for the building based off its information filed with the National Register of Historic Places. A pro-forma was ready by 4 a.m., that broke down how many units they’d be able to get with a certain efficiency, how much they could get for the units and what it all would cost. And by the time Hagedorn toured it, he instantly fell in love.

Built in 1931 as the headquarters of the Kansas City Power & Light Co. in an 18-month time frame, the building was at its completion the tallest building west of the Mississippi River, and retained that designation for the next 50 years.

Built in 1931 as the headquarters of the Kansas City Power & Light Co. in an 18-month time frame, the building was at its completion the tallest building west of the Mississippi River, and retained that designation for the next 50 years.

“The lobby with these beautiful barrel ceilings, all the marble, and these pewter with sun bursts over the elevator doors. Then you get up to the 32nd floor and you see the views,” he said. “I knew I had to buy it.”

The two-year-old firm closed Sept. 30 on its acquisition of the building and by fall of 2016, will unveil 213 apartments with the “the highest end finishes anyone has seen in Kansas City,” Hagedorn says. But knowing that one of many barriers to building downtown was the addition of parking space, NorthPoint also bought the lot to the north of the building, where 80 additional apartments will wrap a 509-stall garage.

In the 1930s, Kansas Citians came to the auditorium of the building - which has since been filled in - to learn how to use electricity.

In the 1930s, Kansas Citians came to the auditorium of the building – which has since been filled in – to learn how to use electricity.

“Our plan was to come in with a five-story garage that suits the parking needs for our project, and the Hotel President had a need for 100 stalls, so we cut a deal,” Pomerenke said. “The Hotel President is one of the most successful TIF projects in the Kansas City-area, so meeting with Ron Jury and understanding the finances of that TIF and what the capacity was to do more with it, we hatched a plan for this 5-story garage, with 400 stalls on floors 2 through 5 and Hotel President having the basement level. That allows us to capture existing TIF income to subsidize the infrastructure needs of project.”

The Power & Light project will include an extension to the north with a 509-space parking garage wrapped with floor-level retail and 80 additional units.

The Power & Light project will include an extension to the north with a 509-space parking garage wrapped with floor-level retail and 80 additional units.

Named after the utility company it formerly housed, the Power & Light Building building has sat largely vacant for years. BNIM, its last tenant, moved out and demolition has already begun. Crews are dealing with environmental issues: asbestos and dealing with the effects of the power plant that formerly sat in the northern lot. The building was also 59 percent efficient – much lower than the 80 to 85 percent range NorthPoint usually works with. The firm also had to get six code modifications from the city to allow it to do things like dead-end corridors, and to leave the stair towers as they were.

Gib Kerr of Cassidy Turley, who brokered the deal; Nathaniel Hagedorn, CEO of NorthPoint Development and Mark Pomerenke, NorthPoint VP of Operations.

Gib Kerr of Cassidy Turley, who brokered the deal; Nathaniel Hagedorn, CEO of NorthPoint Development and Mark Pomerenke, NorthPoint VP of Operations.

After a full-gut remodel, each unit will receive hardwood floors and travertine bathrooms. A 3,000-square-foot clubhouse on the 32nd floor will house a bar, piano, and sundeck as well as a 360-degree terrace with the most stunning views of Kansas City.

The view from the building looking south.

The view from the building looking south.

“We’ve also got this remarkable lobby space, one of the finest art deco spaces in the country. We could convert it to office, but it deserves to be a public space,” he said. That’s why he’s on the hunt for a 17,000-square-foot restaurant to go into the lobby. With a $6 net rent, “it will be a hell of a deal,” Hagedorn said.

The view from the building looking north.

The view from the building looking east.

With street-level retail, a full-size saltwater pool, and 400-square-feet private terraces, the Power & Light project’s north extension “will be the most unique product offering in Kansas City from a multifamily standpoint,” Pomerenke said. “The tower units are sexy, and they have the views, but this will be a really unique living experience.”

[Click here to see a floor plan.]

One environmental problem NorthPoint will have to deal with in the northern extension of its project: the effects of the power plant that was formerly on the site.

One environmental problem NorthPoint will have to deal with in the northern extension of its project: the effects of the power plant that was formerly on the site.

So why take on a project that’s failed so many times?

“We’ve seen absolutely great growth in the multifamily sector over the last few years. Demand in downtown has historically been 97 to 98 percent – and those are pretty lightly managed properties,” Pomerenke said. “The level of service we’ll bring will really change that landscape.”

NorthPoint will replace the lighting system of the building’s four-story lantern, but in the meantime had 8 LED lights installed and lit blue for the Kansas City Royals.

NorthPoint will replace the lighting system of the building’s four-story lantern, but in the meantime had 8 LED lights installed and lit blue for the Kansas City Royals.

 NorthPoint’s playing ground was principally in the suburban markets of Kansas City, but Hagedorn points out he’s concerned with oversaturation in those markets. “So we asked ourselves how we take our expertise in management and multifamily but utilize it in a place where there’s high barriers to entry,” Hagedorn said. “Land downtown is $80 to $100 a square foot, you’ve got to go vertical, and you’ve got to build parking structures. It’s difficult to build downtown, which is great, because that means you close the door behind you.”

The building's tube system would send correspondence from one floor to another and was a state of the art system in the 1930s.

The building’s tube system would send correspondence from one floor to another and was a state of the art system in the 1930s.

But Hagedorn believes the Power & Light Building, along with Cordish Company’s One Light 25-story apartment tower will “open the flood gates” on new supply.

“We had done really the first suburban upscale apartments at Briarcliff City Apartments and we started to achieve new rental rates that people didn’t know were possible. It’s taken off further from there. If we can hit $2 rents downtown, that’s certainly on the high side but it’s a possibility,” he said. “If both of our projects can achieve the success I think we’ll be able to, we can prove out there’s demand for institutional size projects of 250-plus units. We’ll set new high water marks for Kansas City’s multifamily market that I think will open the flood gates of new construction towers.”

PROJECT TEAM: Polsinelli PC, Lewis Rice & Fingerish, NSPJ Architects, Neighbors construction, Great Southern Bank.

Check out more stunning photos on our Facebook page!

Using historic tax credits to bring
multifamily downtown

1-KC CREW October Panelists 10.22.14

Mark Pomerenke, NorthPoint Development; Jason Swords, Sunflower Development Group; Michael Knight, Commerce Tower Group; Courtney Kounkel, Centric Projects; Christine Johnston, Marsh & Co.

 Urban sprawl in Kansas City has left some incredible historic buildings as eyesores in the core of the city. Historic tax credits are one mechanism that’s helping developers take those blighted black holes and make projects work. KC CREW invited four experts to share their thoughts on historic tax credit process and how to best leverage it to make these projects viable. Here’s what they said.

The exterior of the Power & Light Building is clad with Indiana limestone.

The exterior of the Power & Light Building is clad with Indiana limestone.

Mark Pomerenke, whose firm is working to renovate the Power & Light Building, said NorthPoint Development wanted to use historic tax credits as a reduction of cost – not a source of equity – and giving those credits to their investment partners. The project is financed using $19 million raised in equity combined with small bridge loans and state tax credits, and with a $36 million permanent loan with Great Southern Bank,

“Those projects exist because you have these unique assets that are irreplaceable real estate. Without the passion and desire to bring those back, you really wouldn’t see these projects,” he said. “It’s a unique tool to keep our history intact.”

Michael Knight of Commerce Tower Group

Michael Knight of Commerce Tower Group

So how has Kansas City’s market evolved to now be able to support these projects? Michael Knight of Commerce Tower Group, said his firm looks toward a demographic that isn’t so cut and dry.

“Sure, the young people are the low-hanging fruit of the downtown urban core, but what we’re seeing here and in other cities is that those are the first people through the door because they’re the most risk-oblivious; They don’t think about the same things that a well-weathered individual would, someone that’s been out there before and had to do a little more thinking before rushing into it,” he said.

He also noted a general shift in society. After World War II, mobility was key; Residents could move farther out into neighborhoods and then jump in the car when they needed to drive to different services. Now, today’s market is after instant gratification.

“Mobility’s now gone, and ‘connectivity’ is the new word. I want it now; I don’t want to have to wait to go get it. Connectivity is access to resources like entertainment venues, food, arts, culture – being on the pulse of the city,” he said. “That mindset doesn’t fit well into a pie chart: it’s working professionals, new families, millennials, empty-nesters, and retirees.”

Sunflower Development Group was responsible for the conversion of the Ambassador Hotel at 11th and Grand downtown.

Sunflower Development Group was responsible for the conversion of the Ambassador Hotel at 11th and Grand downtown.

Jason Swords, owner of Sunflower Development Group, recently finished the Ambassador Hotel at 11th and Grand, a $10.5 million conversion using historic tad credits. His group is also working on its biggest project to date – converting 215 W. Pershing to a mixed-use building by adding 5 floors of high-end apartments, a $17 million project.

He said he has two concerns about the future of using these credits in downtown Kansas City. “At some point, we’re going to run out of building stock,” he said. He said he’s also concerned about “falseness” in the market when it comes to developers achieving rents of $1.75 to $1.80 a square foot. “To go up from $1.25 to $1.80 is a three-generation swing. I hope we can get there, but our numbers don’t prevail upon us making $1.75. We have to make it work with numbers that make sense.”

L to R: Mark Pomerenke, NorthPoint Development; Jason Swords, Sunflower Development Group; Michael Knight, Commerce Tower Group; and Courtney Kounkel, Centric Projects.

L to R: Mark Pomerenke, NorthPoint Development; Jason Swords, Sunflower Development Group; Michael Knight, Commerce Tower Group; and Courtney Kounkel, Centric Projects.

Courtney Kounkel, partner of Centric Projects, highlighted the challenges she sees in the design and construction of historic conversion projects. The most difficult, she said, is often the stringent MBE/WBE requirements.

“The workforce reporting – we’re now required to report on any projects were doing with incentives, every single person that works on the project we now have to report every month. They’re tracking minority women, an as you can imagine in construction,  it’s difficult. We’re actively out looking for bringing crafts people that are women onto our project to meet those requirements,” she said.

In fact, although she is one of three founding partners of Centric Projects, she can’t get certified because she doesn’t own 51 percent of the company.

“It’s harder to get women’s participation on the construction services and unfortunately I don’t see as many programs out there encouraging women into that sector, which is a bad thing,” she said. “A lot of programs and services bolster and promote minority side of things but we need to encourage women’s participation because it’s currently, there are so few people out there that can check those boxes.”

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NorthPoint begins demolition, plans new Kaw Point spec warehouse

Since its 1937 construction, the Public Levee in Fairfax, Kan., has been largely successful. Built to compete with City Market on the other side of the river, the site never took off. The Unified Government of Wyandotte County/Kansas City, Kan. acquired the property in 1897 as the City of Wyandotte, before UG was formed. The entity still owns the ground, but its few remaining tenants are moving out following a recently signed lease to NorthPoint development for sixty years, plus a forty-year extension.

NorthPoint Development started on demolition at a Thursday morning open house of sorts, in the fashion of the “Transformers” movie, Brent Miles calls it. A Kaw Valley Cos. crew took “one of the most powerful munchers in Kansas City” to the south end of one of eight buildings the crew will demolish by February 2015.

A rendering of NorthPoint's new spec-built Kaw Point warehouse. Accurso believes he's close to leasing 100,000 SF of that space.

A rendering of NorthPoint’s new spec-built Kaw Point warehouse. Accurso believes he’s close to leasing 100,000 SF of that space.

Beginning in March, crews will construct a 400,000-foot single-load spec warehouse that’s 500 yards from I-70 and 1.7 miles from GM’s Fairfax plant.

“That will probably be ready around August or September 2015,” said Kessinger Hunter’s Joe Accurso, who is marketing the project. He thinks he’s close to pre-leasing more than 100,000 square feet of that space.

A stone's throw away from GM's Fairfax plant and I-70 and 635, NorthPoint expects the space to go quickly.

A stone’s throw away from GM’s Fairfax plant and I-70 and 635, NorthPoint expects the space to go quickly.

“Timing worked well with this tenant that wanted upgrades to their building before it was built, but didn’t want to own their own building,” Miles said. “We’re going to put them in the east end of the building which leaves us 270,000 square feet deep – similar to the product we’ve been successful with in Riverside.”

It’s a lucrative projects for tenants who want to be along the Kaw River and take advantage of aggressive Kansas incentives, such as personal property tax exemption, a 5-year BPU electrical discount, and PEAK, LLC, and S-Corp exemptions.

Kaw Valley Engineering began eating away the public levee as part of Kessinger and NorthPoint's open house on Thursday. Want to see it in action? Check out a video on our Facebook page.

A Kaw Valley Cos. crew began eating away the public levee as part of Kessinger and NorthPoint’s open house on Thursday.

“We see it as an alternative to Riverside, close to the GM plant, I-70,635 and I-35, so we think logistics make a lot of sense for this location as well,” Miles said. “Because of the side of the building, the cost and incentives from UG, we have taxes set right at $1, which is very competitive.”

Interested in the space? Contact Joe Accurso here.


CBRE’s Deal of the Week

Executive Hills, 8400-8500 W. 110th, Overland Park, Kan..

Executive Hills, 8400-8500 W. 110th, Overland Park, Kan..

Brent Roberts represented 2526 Investment Company in the signing of a lease by Emporia State University. The school will move into 10,174 square feet in Executive Hills 26, 8500 W. 110th St. The building is at the highest point in Overland Park with fantastic views, Roberts said.

Roberts still has a full floor of space in Executive Hills to rent. Download a property brochure. http://www.cbre.us/o/kansascity/AssetLibrary/8400-8500%20W%20110TH%20flyer%201.14.pdf

Roberts still has a full floor of space in Executive Hills to rent. Download a property brochure.

Roberts is working on marketing the available 5th floor of the building, about 11,300 rentable square feet. Those interested can download a property brochure here.

Did you recently negotiate a significant deal? Contact us and we may feature it as our Deal of the Week!


KCIC honors area’s most sustainable projects

Hufft Projects, 3612 Karnes

Hufft Projects, 3612 Karnes

The Kansas City Industrial Council is recognizing industrial-based businesses in Kansas City who have invested considerable money and effort into sustainable practices. Here’s a look at the honorees:

For its new headquarters, Hufft Projects took an old grocery warehouse in Roanoke and converted into a modern architecture studio and fabrication shop using sustainable building techniques and products throughout the adaptive-reuse renovation.

The Surplus Exchange, founded in the late 1980s, collects electronic waste to refurbish and re-sell equipment that can’t be refurbished, addressing the issue of American’s sending more than 70 percent of their e-waste to poor countries where it pollutes the streams and fields.

Boulevard Brewing Co. took home an award from KCIC Thursday night for its commitment to remaining a landfill-free facility.

Boulevard Brewing Co. took home an award from KCIC Thursday night for its commitment to remaining a landfill-free facility.

NextPage, a commercial lender located in Subtropolis, expanded its space in the underground business park by 28,000 square feet, which enabled it to install a very efficient eight-page color press that uses 35 percent less energy to operate and produces a fourth of the CO2 emissions of a standard printer.

With the opening of its new headquarters facility in 2010, Boulevard Brewing Co. founded Ripple Glass, a glass recycling initiative. Working with Bridging the Gap on by-product synergy solutions, the move helped the brewery implement its stringent zero-landfill policy. Cheers to that!

Since 1992, Bridging the Gap has worked to connect the environment, economy and community, but has put a major focus on connecting waste generated at local industrial businesses with other businesses who can reuse that waste. In the past 5 years, the organization has diverted almost 10,000 tons from area landfills.


Curry Real Estate Services
celebrates 90 years

Ray Brock, Chairman Emeritus of Curry Real Estate Services

Ray Brock, Chairman Emeritus of Curry Real Estate Services

Founded by Charles F. Curry in 1924, multifamily and commercial property firm Curry Real Estate Services is turning 90 years old this year. Chairman Emeritus Ray Brock is celebrating a milestone as well: 60 years with the company.

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Curry employees are active in the community and frequently contribute their time to Harvesters, the American Red Cross, the Harvest Ball Society, and Gordon Parks Elementary School.

“We are proud that our history has given Curry a strong foundation, spurring the growth that gives us the opportunity to serve the Kansas City commercial real estate market well into the future,” said President Ellen Todd. “We are especially appreciative of the six decades of leadership Ray Brock has contributed and continues to contribute to our company.”

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Freightquote CEO Tim Barton, AEG’s Phil Anschutz share lessons of entrepreneurship

In August of 1998, Tim Barton set out to enter one of the largest markets in the country: Freight.

“Honestly I didn’t know anything about freight. I sometimes joke I still don’t,” Barton said. “It was a very large industry, and what I’d heard about it was that people spend a lot of time gathering quotes because if you’re going to ship something heavy, sometimes the cost of moving the good is more expensive than the goods themselves, so getting a quote is pretty important.”

Sixteen years later, Freightquote handles more than a billion shipments per year, and is set this year to rake in more than $600 million in revenue. But launching such a large endeavor to introduce new e-commerce technology to that market was something he needed to handle with a certain finesse.

UMKC Trustee Tom Bloch and Freightquote lead independent director Gary Forsee.

UMKC Trustee Tom Bloch and Freightquote lead independent director Gary Forsee.

“We set out to build this system to bring ratings across all carriers to the internet. It took a lot of luck because you couldn’t tell the carriers what you were doing or they would freak out, so you had to build it quietly and then launch it and hope everything worked out,” Barton said. “So we spent a year decoding all these complex tariffs and ratings structures and putting them on the web. That was 16 years ago and we’ve grown quite a bit since then.”

Freightquote has been so successful, Barton said, because its tech platform was disruptive. He said he’s seeing that disruption today in the automobile industry with the advent of self-driving cars and ride-sharing services like Uber, which have the potential to cut demand for oil and cars in half.

UMKC names Phil Anschutz as their 2014 International Entrepreneur of the Year.

UMKC names Phil Anschutz as their 2014 International Entrepreneur of the Year.

“It’s an exciting time to live in these technologies and use them to pioneer,” he said. “The potential for disruption in startups and innovation is probably bigger than it’s ever been in my adult lifetime. Starting a business today is more exciting and maybe more approachable than ever.”

Barton is one of two local businessmen whose careers were highlighted by the University of Missouri Kansas City as winners of the Henry W. Bloch School of Management’s entrepreneurs of the year. He joins a list of honorable past winners including David Brain of EPR Properties and Dan Lowe of RED Legacy. UMKC also awarded its International Entrepreneur of the Year award to Phil Anschutz, owner of Anschutz Corp. and subsidiary Anschutz Entertainment Group (AEG), which built and operates the Sprint Center. The corporation’s major business interests include communications, transportation, natural and renewable resources, real estate, lodging, publishing and entertainment.

Phil Anschutz reveals the traits of 1920s entrepreneurs who built Kansas City and the industries to support it.

Phil Anschutz reveals the traits of 1920s entrepreneurs who built Kansas City and the industries to support it.

Anschutz’ Kansas City footprint is undeniable, as evidenced by Clark Hunt, CEO of the Kansas City Chiefs, who said his career would not have been possible without Anschutz.

“Mr. Anschutz is involved in so many ventures and has been for decades. He sees opportunities that others just don’t see,” Hunt said. “He’s been a tremendous partner in the league; He’s had a tremendous vision for the league and has supported it throughout. My family would not have had the pleasure of being a part of the league as long as we have without Phil Anschutz.”

Anschutz used the platform of the award to reveal a new book he recently completed, which characterizes 50 businessmen who in the 1920s explored, developed, civilized and settled territory west of St. Louis, establishing new strategies, creating new technologies, industries, and tens of thousands of jobs. He peered into the character of these men and revealed a few key traits necessary for creating such a legacy.

We caught up with Michael Block Block Real Estate Services and Byron Ginsburg at UMKC's Entrepreneur of the Year awards banquet.

We caught up with Michael Block Block Real Estate Services and Byron Ginsburg at UMKC’s Entrepreneur of the Year awards banquet.

First, they all acquired an education but were mostly self-taught. They all had commercial instincts, and had plans that they boldly clinged to. But perhaps most importantly?

“They all had overcome challenges early in their lives of some kind. Their biggest advantage was that they had no advantage,” Anschutz said. “They seemed to possess the ability to overcome adversity. They were equipped to psychologically accept the burdens and pressures of risks.”

Look for the book – which has yet to be named – to hit shelves in mid-January.


Take the crown!
KC CRE firms show Royals pride

Block Real Estate Services modified its annual wreath lighting to show its support for the Kansas City Royals.

Block Real Estate Services modified its annual wreath lighting to show its support for the Kansas City Royals.

Kansas City’s real estate scene is ready for the big game tonight and are flaunting their Royals pride! Is your team showing their support? Show us by sharing photos on our Facebook page, or by emailing our managing editor.

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David Block and h is wife will watch the Kansas City Royals take on Baltimore today from the same seats they watched the 1985 World Series. Photo courtesy of Yahoo! Sports.

Sitting in the front row of last night’s Game 3 of the American League Championship Series, David Block caught the eye of a Yahoo! Sports reporter, who noticed Block’s shirt: “29 years, 1 wife, 3 kids, 9 dogs, 0 World Series.” Block reveals in the article that he and his wife are dog lovers who have served as a foster home for dogs. His wife, Vicki, says she’s “just happy he’s only had one wife.” Read the full article here.

BHC RHODES team (left) and CBRE staff (right) are ready for a World Series!

BHC RHODES team (left) and CBRE staff (right) are ready for a World Series!

Check out the rest of our photos and like our Facebook page by clicking here. And GO ROYALS!


Block Real Estate Services’
Deal of the Week

Pinnacle Corporate Centre V, 4001 W. 114th St., Leawood, Kan.

Pinnacle Corporate Centre V, 4001 W. 114th St., Leawood, Kan.

Hunter Johnson, Max Wasserstrom, and Ken Block of Block Real Estate Services negotiated a long-term lease of a Class A office building in Leawood, Kan. An undisclosed international financial service firm will occupy 17,000 square feet of the building, located at Pinnacle Corporate Centre V, 4001 W. 114th Street in Leawood.

Pinnacle Corporate Centre V is a spec-built office development is the last remaining office development along the Tomahawk Creek Parkway corridor, according to BRES. The three-story, 67,924-square-foot office building will be ready for occupancy by September 1, 2015. About 50,000 square feet remain available for lease with the opportunity for exterior building signage.

Want more information? Contact Hunter Johnson or Max Wassterstrom.

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