Revitalizing Kansas City's Historic Northeast: A Bond-Financed Transformation

Kansas City, Missouri, is embarking on a bold and ambitious plan to tackle decades-old blight and environmental issues in its Historic Northeast neighborhood. The city is leveraging a bond-financed redevelopment strategy to breathe new life into this long-neglected area, with the goal of creating a vibrant, mixed-use community that addresses the diverse needs of its residents.

Unlocking the Potential of Kansas City's Historic Northeast

Tackling Decades of Neglect

The Historic Northeast Redevelopment Area encompasses a vast 1,398 noncontiguous acres, hosting nearly 400 businesses that have weathered multiple revitalization efforts over the years. The sheer scale of the challenge has been daunting, but city officials are determined to break the cycle of neglect and breathe new life into this historic district.

Clay County Commissioner Scott Wagner, a former Kansas City councilman, acknowledges the magnitude of the task at hand, but believes the city's comprehensive finance plan offers the best chance of success. "This project's finance plan offers a number of sources to fill the many gaps that a project of this size typically has," Wagner said. "By putting together a plan that includes state and local elements, I think it offers the most thought-out plan to take on a project of this size."

Addressing Environmental Concerns

The Historic Northeast neighborhood has grappled with environmental issues that date back nearly a century, further complicating the redevelopment efforts. "You have to deal with environmental challenges that date back almost a century ago," Wagner explained. "This project is not for the faint of heart."

The city's plan aims to tackle these long-standing environmental concerns, paving the way for a more sustainable and livable community. By addressing these complex challenges, the redevelopment project has the potential to transform the neighborhood, improving the quality of life for its residents and attracting new investment and opportunities.

A Multifaceted Approach

The Historic Northeast Redevelopment Plan is a comprehensive initiative that encompasses a diverse range of elements. The mixed-use development will include affordable housing, retail space, a daycare facility, and public infrastructure improvements, all spanning over 43,000 square feet, not including parking.

The plan's financing structure is equally multifaceted, with the Industrial Development Authority of Kansas City issuing a combination of tax-exempt and taxable revenue bonds to fund the project. The first tranche, $52.105 million of unrated tax-exempt economic activity tax revenue bonds, will be used to kickstart the redevelopment efforts, while the second tranche, $1.285 million of taxables, will provide additional resources to support the project's implementation.

Securing Public-Private Partnerships

The success of the Historic Northeast Redevelopment Plan hinges on the city's ability to forge effective public-private partnerships. The Planned Industrial Expansion Authority of Kansas City will become the owner of the redevelopment project site and the existing improvements, leveraging a Chapter 100 bond issue to facilitate the process.

Additionally, the city has secured the involvement of Historic Northeast Lofts, LLC, the developer responsible for the residential component of the project. The city's partnership with this private entity is crucial, as it allows for the coordination of equity and debt financing to ensure the successful completion of the residential portion of the development.

Projecting Growth and Sustainability

The city's redevelopment plan is underpinned by a comprehensive revenue study conducted by PGAV Planners, which projects the growth and sustainability of the project's funding sources. The study assumes that voters will reauthorize and extend the various sales taxes imposed in the redevelopment area, which are captured as part of the economic activity tax (EAT) revenues.

The study also estimates 2% annual growth in taxable sales, 2% annual growth in food and beverage sales, 3% annual growth in earnings, and 1% growth in utility tax collections. These projections, based on historical data, provide a solid foundation for the city's confidence in the long-term viability of the redevelopment plan.

Overcoming Challenges and Unlocking Potential

The Historic Northeast Redevelopment Plan is not without its challenges, but city officials are determined to overcome them. "In order to successfully redevelop this site, you are forced to take on multiple buildings at once to remove blight," Wagner said. "The market alone cannot bring this site back. It would never [generate the] cash flow to make it worthwhile."

However, with the right developer, the right plan, and the support of the public sector, the project has become feasible. By leveraging a comprehensive bond-financing strategy and forging strategic partnerships, Kansas City is poised to unlock the immense potential of its Historic Northeast neighborhood, transforming it into a vibrant, sustainable, and inclusive community that serves the needs of its residents for generations to come.