Downtown Kansas City's inspiring comeback story

In 2002, only 60,000 employees worked in Downtown Kansas City, Missouri.

“They were fleeing as quickly as they could, and I think the access on Main Street was one way south to Johnson County. No one wanted to be here. No one wanted to live here. It was really a very difficult kind of situation,” said Bill Dietrich, president and CEO of the Downtown Council of Kansas City.

Dietrich was the featured speaker at the monthly luncheon hosted by the KC Downtowners last week.

Since 2002, Downtown has seen $11 billion in investment. It now boasts 124,000 employees and 32,000 residents.

“We’re the fastest-growing neighborhood. If we were a city, we’d be the 11th largest in the metroplex. That’s kind of cool. We’re also the fastest-growing neighborhood community. We’re adding more residents,” said Dietrich.

The area that Dietrich said he defines as “Greater Downtown” is approximately 2.5-mile square blocks and includes the Missouri River to 31st Street, 18th and Vine to State Line Road.

Dietrich shared publicly for the first time some new independent research data about Downtown’s post-COVID recovery. Like all major communities across the country, Kansas City suffered some economic losses as a result of the pandemic which struck in 2020. But, recovery has been healthy.

In 2019, Downtown had 5.3 million unique visitors. In 2023, Downtown had 6 million unique visitors, which equates to 133 percent of the pre-COVID levels. In addition, Downtown has recovered 95 percent of the number of visits (the visit frequency of unique visitors) from 2019. Kansas City’s recovery rate is surpassed by only Nashville and San Jose, Dietrich said.

“We need to build on that trend. That’s why these events are so important. Not only the FIFA World Cup, which we all know is coming in 2026, but we now have the Big 12 women’s and men’s for the next seven years. Those are huge plusses for our community, and they feed off of each other. The more of these you do, the more you get,” he said.

The employee base has increased by 11 percent since 2020. Thirty-five percent of all Kansas City, Missouri jobs are Downtown. Dietrich said that the employment base is important to support Downtown restaurants and cultural venues which helps spur the economy.

Dietrich said companies are drawn to Downtown because of its exceptional talent pool, vibrant environment and growing residential options. Downtown has 26.5 million SF of office space, making it the largest business district in the region.

According to Dietrich, approximately 76 percent of the Downtown pre-COVID employees are back in their offices at least three days a week, placing Kansas City fourth in the nation for employee recovery.

Bill Dietrich, president and CEO of Downtown Council of Kansas City presented to KC Downtowners earlier this month. Photo Credit: Marcia Charney | MWM KC

Data shows that where employees reside in the metro drives their use of Downtown. Dietrich said that employees who live within two miles of Downtown are 100 percent back in the office. This percentage drops to 80 percent for employees who live two to five miles away and to 70 percent for employees five to 10 miles away. Farther than 10 miles, the percentage drops even lower.

“What does that tell you about what you should be focusing on as a city as policymakers and at City Hall? You should be focusing on an economic development strategy for the city, in my opinion, which prioritizes and really focuses on multi-family residential in Downtown. . . . You can see it borne out in the data. The closer you are to the center, the more likely you are to go to your office, buy that lunch and go to that theater afterward, go to a game or a concert at T-Mobile Center or the Kauffman Center for the Performing Arts,” he said.

Although the number of Downtown residents has climbed, Dietrich said there is a need for more residential inventory of all types, not just luxury projects. He said the residential population is projected to be 43,000 by 2035.

“Residents are everything. Residents bring vitality. They demand things. They want streetcars. They want more cultural amenities. They want better jobs. And, it makes a huge difference to have them,” he said.

The demographics of Downtown residents show that 50 percent are men and 50 percent are women, and 51 percent are not majority culture.

So we’re a very diverse downtown. And that’s in pockets and areas that are less diverse and more diverse areas. That’s why we say Downtown is a collection of 22 unique neighborhoods, each with its heritage, history, value and culture,” said Dietrich.

Dietrich said there is $3.5 billion of Downtown investment currently underway, including the redevelopment underway by SomaraRoad Inc. in the West Bottoms, mixed-use development at the riverfront, the UMKC Health Sciences Building, streetcar expansion, Barney Allis Plaza and the Buck O’Neil Bridge. There also is the $225 million South Loop project, a four-block park on 5.5 acres which will be built over I-670 and will reconnect Crossroads to the Central Business District. To date, $125 million of the project’s cost has been raised, and Dietrich said construction should begin next spring.

“Downtown baseball is still a conversation we need to have. It’s the right decision to make. It would add three million more visitors to our marketplace, and absolutely you would see $2 to $3 billion of investment around it,” Dietrich said.

Other needs for Downtown include innovation districts, east-west transit connections and more parks, trees and open spaces.

Dietrich recognized that Downtown crime is escalating, and public safety is a huge issue.

“We’re seeing escalations in crime on property or person, and we are mobilizing our energy and our forces. It is a top priority for us to change that trend,” he said.

Dietrich cautioned that Kansas City must work to retain its progress and avoid what happened in downtown St. Louis, which has beautiful monumental structures and roads, but is empty.

“It’s very affordable Downtown. It’s very diverse Downtown. It is a very welcoming Downtown. None of those are a given. We all had to work really hard to make that happen. And, we can’t take our eye off the prize,” Dietrich said.

The header image shows the completed, under development and proposed mixed-use and multifamily Light Towers within the Kansas City Power & Light District’s nine-city block retail, entertainment, office and residential district, located in the heart of Downtown Kansas City directly adjacent to the T-Mobile Center. Image courtesy of The Cordish Companies.

No hurdle too high for KC'S transformative mixed-use developments

“Doing any development today is really hard. Challenges on construction costs, challenges on financing. Doing mixed-use is a whole other level of hard,” said Michael VanBuskirk, SIOR, CCIM, CRE, vice chairman and principal at Newmark Zimmer.

Yet, several substantially sized and transformative mixed-use projects are underway across the Kansas City market.

VanBuskirk was joined by panelists Brandon Brensing, VP of real estate development at Ryan Companies US, Inc.; Grant Curtin, principal and VP at Curtin Property Company; Dan Horn, development manager at IAS Partners, Ltd.; Holly Rome, EVP, national retail leasing at JLL; and Scott Rosemann, P.E., F.SEI, LEED AP, COO at Rosemann & Associates, P.C. at MetroWire Media Kansas City’s Mixed-Use Masterpieces program last week. Erin Rosenthal, P.E., president at PMA Engineering, moderated.

The panelists discussed some of the current area projects as well as the challenges and insights for creating successful and visionary mixed-use projects.

Above: MWM KC Mixed-Use Masterpieces panelists (L to R): Holly Rome of JLL, Brandon Brensing of Ryan Companies US Inc., and Scott Rosemann of Rosemann & Associates P.C. discuss the challenges and timelines for mixed-use developments in KC. Photo credit: Jacia Phillips | Arch Photo KC

One of those projects is Bluhawk, a 277-acre mixed-use project in south Overland Park, Kansas, a large portion of which already is completed. The project includes 380 residential units, AdventHealth South Overland Park Hospital, office and retail. A 420,000 SF sports complex will open later this year.

Another is Discovery Park in Lee’s Summit, Missouri, a 268-acre project.

“We’ve taken the live, work, play and we’ve added stay in there. We’ve got two hotels in our first phase . . . and then medical office was a piece of it because we looked at how close we were to all the regional hospitals, and Lee’s Summit is a medical hub. And then the entertainment piece. . . . We looked at the opportunity to make this a regional destination,” said VanBuskirk.

While Bluhawk and Discovery Park are creating new developments where there were none, some major adaptive reuse and redevelopment projects also are underway.

One is the redevelopment of the former site of the Metro North Mall in the Northland, which is a 106-acre mixed-use development called Metro North Crossing.

“For mall redevelopments in particular, in our experience, the thing we’ve had going for us from day one at Metro North is although the mall became obsolete, the real estate that it sat on is still awesome.  We are right at the corner of two highways—169 and 152—right in the middle of the Northland,” said Horn.

Another project in Overland Park is the redevelopment of the Brookridge Golf Course, a 200-acre site being developed by Curtin Property Company. According to Curtain, the project, called Meridian, will feature 2,000 units of multifamily, two million SF of office, retail, food and beverage, entertainment, several hotels and green space. Once completed, the project will retain 18 holes of golf and have a health and wellness focus.

Above: MWM KC attendees enjoy breakfast and coffee while listening in on the panel discussion moderated by Erin Rosenthal of PMA Engineering. Photo credit: Jacia Phillips | Arch Photo KC

Mixed-use projects help to satisfy housing demand, which remains high, Brensing said.

“Kansas City has fared fairly well when it comes to rents, absorption, vacancies and those kinds of standpoints. We’ve seen about a 2.9 percent year over year rent increase. With a limited amount of supply coming onboard, we expect that number to increase through the remainder of the year and potentially into 2025.. . . And we’re going to continue to see a lot of growth not only in class A, but also the class B multifamily,” said Brensing.

VanBuskirk said Kansas City’s retail market is very strong. And although office vacancy in Kansas City is pushing 18 percent, office is doing well in mixed-use projects, he said.

“As we do these projects, we incorporate office into it as a very important critical component to have success,” said VanBuskirk.

The panelists discussed the importance of placemaking in mixed-use projects.

“What it does is it creates an authenticity. It creates a connection to the community. And, it creates a vibrancy in the development. And it’s not just one thing that makes that place that you want to go to. It’s everything that’s put together. It’s the architecture. It’s the landscaping. It’s what retailers you put in there. . . . So, it’s very purposeful and intentional,” Rome said.

“Placemaking is huge. There’s no doubt about it. And the thing that we caution all our developers is placemaking happens, whether you mean for it to or not. Every development is making your place whether you know it or not,” Rosemann said.

According to Horn, another critical element to the success of a mixed-use project is understanding up front what the specific community in which a developer is putting a project wants and what the community is missing.

“Every trade area in Kansas City is a little bit different,” Horn said.

“Talk with your city officials. Understand what they are looking for,” said Brensing.

Above (L to R): Deb Blaylock, Karen Saper and Jason Osborne network at MWM KC’s Mixed-Use event. Photo credit: Jacia Phillips | Arch Photo KC

Mixed-use projects present financing challenges, and although lenders and financing sources are less leery of these projects than they once were, many mixed-use projects would not happen without including a public private partnership component, Curtain said.

“It’s really difficult to make financial sense without the public’s side of investment in the project, whether it be property tax abatement or sales tax incentives and things of that nature,” said Horn.

According to Rosemann, it is important to include current architecture and design trends in mixed-use projects because that’s what tenants and shoppers expect. Design trends today include pet-friendly amenities and places on site to create an “Instagram moment.”

Rosemann also said being nimble and flexible in designing mixed-use spaces is crucial.

“If there’s one thing COVID and everybody being forced to go home taught us, it is that we end up using our spaces in the life of a building in ways that we really, really can’t envision now. So how do we give some thought to a space that can be used multiple ways, whether that’s today or five or 10 years from now,” he said.

“We’re really getting creative with these developments to get people to work there, live there, play there,” Rosenthal said.

Kansas City’s mixed-use market is faring well.

“I would say the fact that we have everyone here at the table talking about the size of the projects we’re talking about tells you how Kansas City is doing. And, that’s very well,” said VanBuskirk.

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Feature photo credit: Jacia Phillips | Arch Photo KC

View the complete event photo album by Arch Photo KC here