Developers plan a $65M rebirth for Pickwick Plaza
Like one of the luxurious Nite Coach sleeper buses that used to take off from Kansas City’s Pickwick Plaza, developer Tom Smith is “ready to roll.”
Smith, the president of Gold Crown Properties Inc. in Overland Park, was talking Friday about his firm’s long, challenging effort to restore the historic downtown complex built in 1929-30 by the San Diego-based Pickwick Corp.
Within 16 months, it is expected to be transformed into East 9 at Pickwick Plaza, a mix of 260 apartments with finishes, amenities and rents designed to attract millennials; 32,000 square feet of commercial space; and a 300-space parking garage.
Located on the east side of McGee St. and stretching the entire block between Ninth and 10th streets, Pickwick Plaza originally opened as a colossal hotel and bus terminal, which were completed for the then-colossal cost of $3.5 million.
Gold Crown’s redevelopment cost, estimated at $46 million two years ago, has increased to $65 million, making financing a challenge. But on Friday, Smith and his son, Bryan, Gold Crown’s executive vice president, were celebrating the closing of their construction financing — a primary construction loan from UC Funds of Boston and a mezzanine loan from FAST Preferred Equity of Denver.
Along with the private equity, property tax abatement, and state and historic tax credits that already were in place, the construction financing will allow the general contractor, HarenLaughlin Construction, to begin work immediately, Tom Smith said.
“We expect it to be leased up before we finish construction,” he said. “This is going to be a special place, really geared to our millennials. It’s going to be their baby.”
Plans call for the project’s north wing, which includes the parking garage and a seven-story building last used for offices decades ago, to be renovated first. It will include 45 apartments that could be ready for occupancy within a year.
The south, or 10th Street, side will include 215 apartments in the 11-story, horseshoe-shaped Pickwick Hotel building.
All apartment tenants will have access to an indoor pool to be added in the two-story Union Bus Terminal space that links the two buildings and is topped by a four-story stone arcade with recessed clock that serves as the visual centerpiece of the Pickwick complex.
Brian Smith said East 9 at Pickwick Plaza also will include a fitness center, other common areas and high-end apartment finishes, such as granite counter tops and stainless steel appliances. But the apartment sizes are being kept relatively small to make rents affordable for millennials seeking upscale downtown digs.
Monthly rents will start around $750 for 375-square-foot studio apartments. The project also will include 525-square-foot one-bedroom units that will rent for $900 to $1,000 and a few 860-square-foot two-bedroom units that will rent for $1,200 to $1,400.
The commercial space could be occupied by office users and retailers, perhaps including a restaurant. Most of it will be on the ground floor, Tom Smith said, but 7,000 square feet of the commercial space is contained in the 11th-story hotel penthouse, which was occupied by the KMBC and WHB radio stations from 1930 until 1968.
Although the current plan is to lease the 11th-floor space to a commercial tenant, he added, he won’t be surprised if someone enamored by the building’s architecture and downtown views approaches him with a request to buy the penthouse as a condo. If that’s the case, the developers wouldn’t be averse to selling off that piece of the historic site.
According to various histories of the Pickwick Corp., it built its first hotel in 1926 in San Francisco and during the next few years added hotels in San Diego, Los Angeles, Salt Lake City and Kansas City — each with its own radio station and bus terminal.
In 1929, the corporation’s Pickwick Stages subsidiary and several other bus lines merged to form Greyhound Corp., which covered the western United States with three divisions, including the Pickwick-Greyhound Lines.
Besides serving as a hub for Pickwick’s luxury bi-level sleeper coaches of the early 1930s, the Union Bus Terminal provided more standard transportation via Pickwick-Greyound routes that radiated toward both coasts, Canada and Mexico.
“The Bus Terminal, billed as one of, if not the, largest terminal west of the Mississippi River, accommodated 4,433 scheduled departures monthly in the early 1950s,” states an application for the Pickwick Plaza’s inclusion on the National Register of Historic Places.
By the 1960s, however, public transportation and downtown Kansas City were in decline. By 1972, the 11-story Pickwick Hotel tower had been converted into a subsidized housing project, called the Royal Towers — a use that continued, albeit with high vacancy — until Gold Crown bought the hotel and bus terminal portions of the complex in April 2010.
By then, the low-income housing reconfiguration and a 1996 fire had eliminated the hotel’s grand lobby and other interior ornamentation.
“But we’re going to take the hotel lobby back to what it looked like in its glory days,” Tom Smith said.
Designed by Wight & Wight, the Kansas City architectural firm that designed landmarks including City Hall and the Nelson-Atkins Museum of Art, the Pickwick Plaza was clad with a brick-and-stone exterior featuring ornamentation that hinted at the Art Deco style that was just beginning to emerge. Its original uses, meanwhile, anticipated the much later trend toward mixed-use development.
The Smiths initially were attracted to the complex in 2008 by its potential to satisfy the growing demand for smaller, upscale apartments that they perceived.
In the 1970s and ’80s, Tom Smith had built Gold Crown Properties into the nation’s fourth-largest apartment management company. He sold it in 1991 to a firm that never used the Gold Crown name. So he took the name back in the late 1990s, when he decided to get into multifamily development.
Brian Smith joined the firm in 2004, and for the next four years, father and son focused on apartment-to-condominium conversions.
Then, in 2010, they bought the Pickwick hotel tower and bus terminal and began work on the 228-unit Heights of Delaware Ridge, the first new apartment project built in Wyandotte County in 27 years.
They sold that project a couple of years later and used the proceeds to advance the Pickwick project. But the developers faced several hurdles. Besides the recession, those included removing a federal deed restriction that limited the hotel tower’s occupancy to low-income residents; securing the separately owned north tower and garage, which they acquired two months ago; and landing incentives and financing.
Perhaps the biggest gut-punch arrived last Christmas Eve, when the developers learned that the concrete restoration needed to put the garage back in service was going to cost $5 million more than they’d expected.
Rising costs necessitated some redesign and value engineering by project designers Helix Architecture + Design of Kansas City and Krudwig Structural Engineers Inc., a Lenexa firm that Gold Crown brought in to help with the cost-saving task.
But the final cost still came in at $65 million, requiring the addition of a mezzanine lender. Metropolitan Capital Advisors Inc. of New York helped the Smiths with the loan processes, and Bob Mayer of MR Capital Advisors LLC of Kansas City helped them navigate the city approval processes. Another Kansas City firm, Rosin Preservation, helped with the historic tax credits.
Now, the Smiths said, they’re eager for the construction team to begin the final work toward restoring life and luster to the hotel tower, which was a favorite 1930s haunt of Harry Truman, and the north tower, which once provided office space for businesses needing quick access to the nearby seats of finance and government.
Located immediately west of Ilus Davis Park, which adjoins the Whittaker U.S. Courthouse, the Pickwick complex also lies just east of the old Kansas City Federal Reserve Bank — now a $100 million hotel redevelopment project.
“That makes $165 million worth of development on the last corner of Downtown that needs to be brought back to life,” Tom Smith said.Originally posted in the Kansas City Business Journal