REVERBerating in the KC Crossroads

Opening a multifamily community and a cocktail lounge during a pandemic presents a unique set of challenges, as told by panelists during last week’s CREW KC event.

The virtual presentation featured REVERB, a 14-story, 132-unit multifamily complex and The Mercury Room, a 800-SF cocktail lounge atop of REVERB, located at 18th and Walnut in the Crossroads Arts District.

Bri Swanson, REVERB community manager; Kyle Bennett, The Mercury Room general manager; Charles Rotter, staff architect at Burns & McDonnell; and Trevor Hoiland, design manager at Burns & McDonnell; joined moderator Andrea McClain, portfolio analyst at CrossFirst Bank, to discuss how the team was able to rise above the challenges of the project during a pandemic.

Developed by Copaken Brooks and managed by Asset Living, REVERB opened mid-August 2020; The Mercury Room soon followed, opening in mid-November 2020.

Swanson explained that REVERB is unique from other recent multifamily projects in that it only offers studio and one-bedroom units and provides its residents with no amenities, like a pool or a gym. Instead, residents have access to a mixed-use space on the 14th floor with conference and meeting rooms and the Mercury Room — all of which Swanson called “an extension to our residents’ homes.”

Hoiland said that in selecting the site, the developers wanted the project to be part of the Crossroads neighborhood.

“So many downtown apartment buildings have everything you need inside them so why move downtown and then just stay in your building?  We really wanted people to not have a gym and not have a pool and not have some of these amenities you typically see because we want people out on the streets, to be part of the neighborhood and connecting with other tenants up the street.  That was very, very intentional,”  Hoiland said.

Swanson said that to supplement the community’s lack of amenities, Asset Living focused on providing residents with ways to get residents into the neighborhood, including providing residents with metal cards to present at nearby businesses for insider perks and discounts.

Swanson said the challenges of developing and delivering a high-end multifamily community with only studio and one bedroom units, no on-site amenities and a cocktail lounge open to the public during a pandemic were met through an innovative marketing plan, custom-built website and COVID-friendly seamless leasing and a virtual marketing outreach.

“When COVID interrupted previously established marketing plans, the Asset team quickly pivoted to creative practices such as partnerships with social media influencers to promote REVERB through what we call the ‘unboxing experience..’ We partnered with several local Kansas City influencers and invited these influencers to unbox promotional items and branded apparel on Instagram as well as attend private tours and share the REVERB experience with followers,” said Swanson.

Swanson said that the project was nearly 10 percent pre-leased without offering concessions prior to delivery.  To date, REVERB is 20.77 percent occupied and 26.15 percent leased.  Rents range from $1,149/mos for a studio unit to $3,325/mos for the largest one bedroom unit, which offers 1393 SF.

Construction of the project was well underway when the pandemic hit and there were not many delays.  Holland said that when smaller job sites in the city were shut down, the REVERB project was able to pull from them to keep construction going. 

Hoiland said that the project got its name from the energy on the streetcar, which also impacted the design of the building. 

“As the building gets taller, those apartment units stretch out further towards the streetcar, towards Main Street - then it pulls back at the very top.  So we really wanted to almost create a diagram of the soundwave that maybe you get from the energy on Main Street,”  Hoiland said. 

The Mercury Room currently accommodates approximately 20 guests to comply with COVID restrictions, but Bennett said it can sit approximately 32 guests when operating at full capacity.  

Entry to The Mercury Room is by reservation only for two-hour periods. Guests are checked in by a host downstairs and notified by text when their table is ready. Reservations are being taken on a month-to-month basis and Bennett said The Mercury Room is booked through the end of the month. Bennett expects to retain the reservation system post-pandemic.

“We are a high-end cocktail bar, really focusing on the craft of making delicious cocktails and really offering a high-touch, elevated-style service not seen in the cocktail world,”  said Bennett.

The Mercury Room has partnered with Michael Corvino from Corvino Supper Club & Tasting Room and is seeking other chefs to offer small bites to pair with the cocktails.

Kuehl forecasts partly sunny, partly cloudy recovery for US economy

CCIM Kansas City kicked off its 2021 monthly breakfast series last week with the annual economic forecast by Dr. Chris Kuehl, managing director and co-founder of Armada Corporate Intelligence. Chris Williams, CCIM, of Highlands Development Group and CCIM Kansas City president, moderated the virtual event.

Kuehl anticipates that 2021 will see five positive changes which will affect the economy and five negative changes.  

The first positive change is the vaccine rollout.  Kuehl acknowledged that the vaccine rollout is slow, complicated and bureaucratic.  However, he said he’s “pretty confident” that by March, the vulnerable population will be vaccinated.  He expects that by mid-summer, the United States will have achieved herd immunity, or something close to it. 

Kuehl believes the second positive change is that lockdowns will start to lift by the second quarter.  The lifting of lockdown restrictions will improve job numbers, particularly in the service sector, and spur spending.  Service jobs will come back very quickly, because there’s no barrier to entry.

“When the service sector starts to come back, our spending will go back to what it used to be. Rather than spending as much money on things as we are now, there will be more interest in spending on services, something that’s been cut off for the last year,” Kuehl said.

The third positive change is the improvement of trade relations with certain key partners in Europe, Japan and Canada, but not China.

Kuehl anticipates permanent changes in work patterns as the fourth positive change. For example, many employees will see a 3/2 week - three days in the office and two days working from home.  However, those who work in collaborative environments and sales people likely will not have that option. 

The fifth positive change, which could benefit some sectors but could damage others, is the recent political shift.  Kuehl said there will be a big emphasis on green, more stability in the medical sector and an emphasis on infrastructure.

Kuehl said the first negative change to anticipate is that the retreat from pandemic protocols will be slow and there will be setbacks, such as mutations of the virus and bureaucratic barriers.

The second negative change is that the business and investment community will be cautious in making moves until they can better assess the new administration.  Kuehl said there are estimates that $2.5 to $4 trillion are waiting to be invested.

The third negative change, according to Kuehl, is that confrontations with China will accelerate and affect trade patterns; followed by the his fourth adverse change: consumers will have to decide when (or even if) they want to go back to their old habits.

Kuehl identified the lingering political divisions as the fifth and final change, complicating policy development on several issues; including economic stimulus, immigration and cultural conflicts.

Kuehl predicts that the United States will see a lot of progress toward economic recovery in 2021, but full recovery will not occur until the end of the year or early 2022, and recovery is volatile. 

“There are lots of factors that are going to have to be worked through in the next several years and we’re going to have periods where there is substantial recovery and then a decline and then a substantial recovery, partly because it is still global,” said Kuehl. 

Kuehl said he did not anticipate that there will be changes to Section 1031 exchanges or REITs in the foreseeable future because both keep money active and moving. 

Kuehl also anticipates that the hotel and airline industries and everything connected to business travel will begin to see a comeback by late May or early summer. 

Kuehl said he predicts that the United States will continue to emphasize reshoring.  But, unlike the prior administration which relied on tariffs and limitations, Kuehl said he believes the Biden administration will push export promotion. 

New KC city manager shares future plans, priorities

Improving efficiencies and supporting underserved communities are among the top priorities for Kansas City, Missouri’s new city manager, Brian Platt.

This week, KC Downtowners welcomed Platt as their monthly virtual luncheon speaker.  Kim Gile, community reference manager for Kansas City Public Library and president of KC Downtowners, moderated. 

Platt, who formerly served as city manager/business administrator for Jersey City, New Jersey, began his role in Kansas City on December 7, 2020.

Citing the city’s $70 million budget deficit for the next year, Platt said he is committed to finding ways to provide and deliver city services without reducing personnel, emergency response times or any crucial services. 

“We’re looking at a lot of ways where we can provide the same services, possibly even provide more of those services, in a much more efficient and cost-effective manner,” said Platt. 

Platt said that since he arrived, the city already has made some specific and aggressive changes to the snow removal policy to make sure that the city is removing snow quickly and efficiently.

As an example, Platt pointed out converting city street lights to LED lights could, over time, cut the annual cost for street lights and their maintenance by nearly one-half.

Platt said he is approaching his new position by listening and learning from the city’s residents and stakeholders to see what the biggest challenges are and will work collectively and collaboratively to identify the best path forward.

“I’m not coming in here and saying this is how I think things should be,” said Platt.

The day before Platt assumed his position, the Kansas City Star released its report on racism in the fire department.  One of the first challenges with which Platt was tasked was tackling systemic racism within city government.

“This problem exists and transcends far beyond the fire department.  It’s in all of our departments and it’s even beyond the halls of city hall, so to speak. It’s a cultural challenge that is not going to be something that we solve overnight,” Platt said.

Platt said the city will be making some big investments to increase staffing in its human resources department and providing management training to make sure managers know the types of behaviors that are acceptable and the best ways to support their staff.

Platt supports making economic development incentives more widely available to underserved communities where there might be some local developers or property owners that have the ability to build a successful project, but might not know or understand the incentive process.

Platt has been speaking with city council members privately - and discussing publicly with community groups - the need for a very detailed, specific and comprehensive development and incentive policy for the entire city.

“One of the ways that a better policy (with) more transparency, more openness will be helpful is anyone in the city, not just the biggest players, not just those with the means and those with the most resources, have access to those incentives.  There seem to be plenty of incentives available.  It’s not a question necessarily of, for the most part, making more incentives available, it’s a question of getting them into the right hands and ensuring that we’re giving them only in the circumstances and cases with the highest need,” Platt said.

Moving from a part of the country where the river is such an important part of the city, Platt was surprised to see so little development along Kansas City’s Riverfront.

“I think there’s a huge opportunity to do more stuff along the waterfront even if it’s just like restaurants and social activities and that sort of thing.  But, it’s one of those resources that absolutely has a lot more potential,” Platt said.

He also said that discussions are underway internally about the opportunity for energy capture from the river itself.

“You think about solar, you think about wind, but we also should think about hydroelectric power.  The water flowing down that river, you may not notice if you look at it, but there are tens of thousands of gallons flowing by every second and that energy and that force of water can be a big, literally, creator of power for the city,” said Platt.

KC Streetcar stays on track to success

Despite the economic challenges of the COVID pandemic, the KC Streetcar system continues to gain momentum and community support.

During this week’s KC Downtowners monthly webinar, Tom Gerend, executive director of the Kansas City Streetcar Authority (KCSA), discussed the current status of the KC Streetcar line as well as the plans for expansion.

“Decreased foot traffic in downtown Kansas City has impacted ridership, but not enthusiasm. Local neighborhoods are continuously requesting that the line extend into their area,” Gerend said.

The current extension projects include routes to the Country Club Plaza, the University of Missouri-Kansas City (UMKC) and the River Market.

“The Plaza stop is an exciting development. This extension will be a gateway connection linking the KC Streetcar to local and regional bus routes. The residents of the Mainline and Plaza areas will have increased accessibility as well,” Gerend said.

The ease of accessibility to these areas will be an added bonus for the students of UMKC. The campus stop will not only help bring foot traffic into other neighborhoods, but be an added an amenity for students.

The additional stops were requested, voted on, approved and funded by the districts that they will impact and are expected to be complete by late 2025.

At the other end of the Mainline, the KC Streetcar plans to expand to the River Market.

“The River Market is a Kansas City neighborhood that has essentially been on an island. This connection will raise the quality of life for residents in this neighborhood by offering better accessibility to and from the area,” said Gerend.

The $20 million project has received $14 million in federal funding and $6 million from local investors.

The current Mainline operates six cars; the expansion projects will allow that number to increase to twelve. The additional cars will require a larger maintenance facility, which is being planned alongside the expansion projects.

The success of the KC Streetcar is clear with public transportation ridership up 30 percent since it began operation, according to Gerend.

“While there is no way of quantifying the economic impact of the COVID pandemic until we are on the other side of it, the hope is that continuing to develop our city during this time will help us bounce back faster,” Gerend said.

In closing, Gerend was asked about further expansion north and south of the urban core.

“There are three legs to the stool. Before we can move forward with a project, we need to know there is technological feasibility, financial feasibility and community support. We are seeing a lot of community support north of the river. The feasibility still needs to be determined,” Gerend said.

Early discussions with North Kansas City have brought to light the possibility of future expansion across the Heart of America Bridge; however, data regarding the feasibility of the that project still needs to be collected.

“This season has brought with it many challenges, but development in downtown Kansas City is moving forward with a hopeful outlook. The KC Streetcar will serve as a valuable asset in recovery and continuing to grow our city,” Gerend said.

The expansion project team plans to seek local contractors via the KCMO procurement process.

Gerend was named the first executive director of the KCSA in June 2014. Since public opening of the streetcar system on May 6, 2016, the KC Streetcar system has carried over 8 million passenger trips, won numerous state and national awards and has been credited with stimulating over $3 billion in active economic development in downtown Kansas City.

In addition to overseeing KCSA’s financial, operations, maintenance and marketing programs, Gerend is helping to lead and advance the streetcar expansion efforts to the Missouri Riverfront and UMKC in partnership with the City of Kansas City, Missouri; the Kansas City Area Transportation Authority and PortKC.