Paul Wilson: The Plaza’s Intercontinental Hotel – 4 Stars of Blight?

screen-shot-2016-09-16-at-3-53-32-pmEarlier this week I had the pleasure of having lunch with Kelvin Simmons and a couple of the largest names in Kansas City commercial real estate. If you don’t know Kelvin, you should. He’s an intensely bright, interesting guy.

Among his achievements, Simmons has served as senior staff member to the late Missouri Gov. Mel Carnahan and was twice elected city councilman in Kansas City. He has been the Commissioner and Chairman of the Missouri Public Service Commission, Director of the state Department of Economic Development and Vice President for Governmental Affairs at Swope Health Services, as well as President and CEO of Swope Community Builders and founder and owner of A.M. Development Company. Currently, he serves as the principal of Denton law firm at 45thand Main in KCMO.

Kelvin Simmons is kind of a big deal.

The table talk came around to TIF, CID’s and urban project financing. Since lunch was on the Plaza, against a solid glass window with a great view of the Intercontinental Hotel, I asked Simmons,

“I understand blight or deferred taxes for a building that’s sat vacant, turns in no tax contribution, but if revitalized, becomes a tax generating property. That makes perfect sense. But as we look out over there at the Intercontinental…what’s your thoughts on it as a “blighted property?”

Simmons laughed, covered his face with both hands and said, “I was so hoping that wouldn’t come up!”

He went on to add his personal opinions that were summed up in a single comment:

“If the Intercontinental is blighted, all of Kansas City is blighted.” 

The Intercontinental opened as the Alameda Plaza Hotel in 1972 and has been a KC showplace ever since. Its coffee shop was one of my my grandfather and my most frequent stops. It’s the place I had my last breakfast with Sprint (United Telecom’s) Paul Henson before he died.

collectible-matchbook-kansas-city-mo-alameda-plaza-hotel-vg-unstruck-7aee9cee30bb50b5f032e26767a0a275Today it needs renovations like any aging property would.

It’s ready to invest $7 million for the guest rooms, $1.2 million for the hotel’s restaurant, $649,000 for its lobby, and $648,000 for improvements to the parking garage and only $205,730 for exterior improvements.

A property this prominent seeking blighted status is a first for KC. 

As soon as the Intercontinental floated its trial blight balloon, what happened?

You guessed it, it opened the flood gates of “me too” opportunists.

Brett Ellison, general manager of the Kansas City Marriott Country Club Plaza, was first in line at the planning meeting. Ellison told the City Council that allowing one of his competitors to collect a tax surcharge to help pay for a renovation project would lead to similar requests from other hotels, including his.

“I am in the middle of a $15 million renovation, so you will receive our application,” Ellison said, dramatically holding his paperwork in the air.

The Planning, Zoning and Economic Development Committee saw this topic as a hot potato and voted 3-1 to send it to the full Council without a formal recommendation.

Kuddos to CouncilwomanHeather Hall, for having the intellectual integrity to vote NO!

“We’ve used the term ‘blight’ like Kleenex,” Hall said. “It’s getting tiresome to hear that everything is blighted.”

Hall went on to ask, “How come the owners didn’t take care of some of these things prior to now?”  “Where did that fall through the cracks?”

What a great question, Ms. Hall…..and here’s the answer.

In January this year, the Aztec Group of Miami said in a release that it had arranged a $75.1 loan from Deutsche Bank for the Procaccianti Group, also known as TPG. TPG Hospitality has managed the Intercontinental since 2006.

The loan documentation states it was for acquisition costs and…….the renovation of 366 guest rooms.

Long story short, they got a loan over nine months ago for renovations. Where did that money go? Now they need blighted status?

Your well-coiffed Scribe is confused.

Hall said another reason for her lone no vote was that InterContinental’s General Manager Breckinridge declined to divulge the hotel’s average occupancy. She said that left her no way to determine how much the sales tax surcharge might bring in.

You know why else they wouldn’t want to share their census?

It likely goes against their case that a four-star Plaza hotel with an average room-night cost of $190 and an 87% full house needs a blight designation and a sales tax increase to fund improvements.

Simmons final thoughts: “I think you’ll see this get tossed out with record speed.”

I’ll be sitting in next Thursday’s Council meeting and report the outcome as soon as it’s available.

And like the street car story, maybe I’ll add another selfie with my friend, Mayor Frosty.

http://www.mb-kc.com/
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51 Responses to Paul Wilson: The Plaza’s Intercontinental Hotel – 4 Stars of Blight?

  1. Typical of whats happening around the nation Paul. It’s worse in dallas than kc.
    These corporations are feeding at the public tax trough like never before.
    Everyone of them wants their piece of the pie.
    And as you know…in the end they get it.
    Worthless projects that get financed thru taxpayer dough where the only winner is the recipient has to stop. When does it end. Probably never. The developers/owners
    have cash for the politicians and then they will pay for the TIF or development
    money.
    Wanna see an example of the worst example of public taxes being misspent..spend
    a day in Jeff City. It’s become so rampant and so overt that this type of business
    is done right out in the open. And Kansas citys representatives are some of the
    biggest pay for play actors in the NATION! In jeff city 60K can kill a bill!
    While kc’s infrastructure is at breaking point…as many cities are becoming the
    next flint……the money is flowing to these types of business people thru the
    crooked and very wealthy political types.
    It’s only getting worse. Now take some smelling salts…great article and a subject
    that needs to be addressed before. Hope to hear other comments on this subject.
    Our country is not broke….we just don’t know how to be frugal and smart with
    where the money goes.
    Citizens united must be repealed. Til then, as John McCain said….its one massive
    pay to play game in America!
    In Kansas, they took lessons from their friends in jeff city. I could blow the
    whistle on what is happening but instead I just sit in disgust at what is happening.
    People have no power. The three power sources are the banks/the insurance
    industry/and the pharmaceutical industry. They are now the kings!

    • paulwilsonkc says:

      Thank you, kind sir. It’s much appreciated. Friday afternoon is the worst day to drop a story on KCC as most are headed into their weekend, but I didn’t want it to sit until Monday.

  2. Orphan of the Road says:

    White, middle-class women have received the biggest benefit from EEO and such.

    You and your buddy Frosty can contemplate another rigged election for the expansion of the trolley to keep democracy at bay.

    • paulwilsonkc says:

      Not without at least a small intervention from Clay Light Rail Chastain!

      • Orphan of the Road says:

        Say what you will about lo’ Clay, he at least got a plan passed by a legitimate election.

        Ol’ Frosty reminds me of what Shirley Chisom said, black politicians are just like white politicians.

        • paulwilsonkc says:

          …and every mile of track, each mile of track will be passed in the same manner, I’m guessing. Limited votes in limited districts but everyone pays the bill!

          • Orphan of the Road says:

            If there is a god we will get a TDD like Columbia, MO did when it created a special district for an election.

            Only one person was in the district.

            The history of urban renewal in KCMO is a history of one FUBAR after another. Perhaps no greater example than I-70’s path.

  3. Whitten Pell says:

    Not sure if your pal that is “sorta a big deal” knows or represents anyone that looked at or was approached about buying the building a few years ago. I do. The infrastructure is a mess and falling apart rapidly. If the tax is limited to those that use it, then what is the issue? User tax is not bad. They are right raising the room rate beyond what a small, minor league town like KC can handle is not the answer.

    Shifting somewhat…Right now we have an arena that has lost money every year it has been open and folks that may and probably won’t ever use it.. pay part of the bill. Folks don’t seem to mind that at all. My take is that tax should go on every ticket sold, but then folks would understand the cost and maybe would not have jumped so quickly to find the easiest way to clear off a few blocks of blight.

    • paulwilsonkc says:

      To your first point, no, he did not and made it clear his points of view were purely personal editorial comments. But totally understand your point. All that said, I agree with Hall that “blighted” gets tossed around like Kleenex.
      We could not be more in agreement on your arena points. I’d vote users pay. When teams are worth billions, privately held, my thoughts are owners should own that obligation or fans if willing.
      ….like $40 parking.
      Makes me grateful to be a sports agnostic.
      Great comment.

  4. Snappietom says:

    This has got to be one of the most greedy moves of all time. TPG knew the condition of the hotel when they bought it. In almost all cases, when hotel ownership changes hands there is a PIP (Product Improvement Plan) completed. Either the seller, buyer or a combination of the two can pay to complete the PIP. In addition, the franchisor, IHG Hotels can extend time to complete these upgrades and improvements. To ask the city to do this through TIF should piss off all tax payers.
    I would hope general manager, Mr .Breckenridge is following orders from TPG and this was not his idea.

    • paulwilsonkc says:

      ST, I saw an abreviated narrative from the loan package $15-17M (depending on how you segregate it, with or without consulting and design fees) was set aside strictly for needed renovations. About the same amount they are looking for now.
      GM’s rarely make the final call on renovations. I do FF&E for projects like these all the time in hospitality. So I’ve been close to how these happen at some of the largest properties in the metro.
      This ones a head scratcher.
      Thanks for your take.

  5. CFPCowboy says:

    It is a good informative article, but what is left out is the reset of depreciation on federal income tax returns. When building Sprint Arena, taxes were heaped on car rentrrs and hotels alike, all of which eere perceived as unrecoverable. Nobody pays attention to the tax rate in a car rental or hotel reservation. It just xhows up on the bill. KC opened the door with the building of the new police crime lab in a blighted area. It is a smart business that uses government idiocy to feather its own nest, and KC is no exception. There is federal money to be had, and even if it was not intended for the purpose, it fits the requiement. We tend not to pay attention to the unexpected consequences. The tax breaks for the KC Star is another example that could cost the population of Kansas City 20+ million. Generally if you need tax breaks to build or recondition property, your taxes are too high, and you have opened the door for corruption and crony capitalism. Who pays? It appears to be another case of unintended consequences. Kansas City has no heritage over 100 years old. In commercial property, 30 year depreciation rules. Hence Red Lobster at 95th and Metcalf. 30 and done, business on the basis of tax policy, the unintended consequence.

    • paulwilsonkc says:

      Right on the money, great comment.
      A $10 per night up charge, after taxes, pays the whole renovation bill in 15 years. You can tax your self, or tax your self.

  6. HARLEY’S TAKE!
    . Great street car! Rode it once. I’ve seen enough. Congrats to those who
    got the money approved. You showed your prowess in wrangling money
    from the taxpayers. I live in overland park. We’re getting a museum filled
    with pictures of old restaurants/scale buildings of a pizza shop/and
    matchbooks from the old glenwood theatre. Wow! Just what we needed.
    2. Westport: I met three owners from Westport who said business had
    returned. They have a new Mexican restaurant and a Picklemans restaurant
    on Westport road. Great. It appears to have overcome its rough days but
    run after 1am.
    3. Election: Hillary still appears to still have lead with
    292 electoral votes VERY WELL LOCKED IN even if she loses florida/ohio and north Carolina. Trumps huge problem will be how do you take 3 minutes of explaining
    your programs and stretch them into 4.5 hours during the 3 debates.
    Impossible. He doesn’t have enough insults and lies to fill up 4.5 hours
    so we should see him stall his way thru them. Obama can
    use executive orders to force Trumps taxes be made public but they
    already have them so no need to do that and inflame alt right racists.
    Trump can turn the debates to cover subjects like the ovens at Auschwitz
    being too small or that Hillary was supposed to be dead on the 12th (which
    has passed) according to reliable sources like Breitbart (chuckies favorite
    bathroom reading material).
    4. Harley’s presidential predictions will be out late. We need to see the final
    voter registration numbers from ohio and florida even those states won’t make
    a difference in the outcome of this election.
    5. Jason Kander (candidate for US Senate) put out one of the best
    political commericals I’ve ever seen as he is blindfolded and assembles
    an automatic weapon in the tv spot. I’m not into guns so I assume it was
    an automatic weapon. Very cool. Don’t know if he’ll win but
    he and his wife are some of the nicest people you could meet. He’s a hero
    who signed up and fought in Afghanistan. We need more like him.
    6. Chuckles was concerned with tv ratings of football. Well chuckles…
    the nfl has done a great job in promoting their product via tablets/laptops
    and smart phones that many people are watching on alternative sources.
    And with millions hooked up to FREE tv now via computers and other devices
    you’ll probably continue to see these ratings numbers be lower. I was surprised because the games were in major markets with large tv audiences
    but maybe the nfl has reached it’s point of maximum saturation with so
    many games televised in a single week plus all the college games that were
    also televised. Plus multiple audience viewing is increasing.
    7. It was amazing what one guy not standing for the pledge could do. Colin got more ink than anyone I’ve seen for just sitting down. The other 80,000 people stood to honor the flag. Don’t we have bigger problems that need our attention than some dude with a chip on his 14 million dollar shoulder. Crazy!
    8. If the intercontinental is actually blighted why don’t they shut it down for the plaza art fair? Seriously folks this is just another money grab to take money away from the taxpayers.
    9. Thanks to all who emailed me last week after I took on the glaze and his
    jinxing our local sports teams. Glaze is obviously having problems and I wish him the best but he won’t listen to Harley and write only bad stuff about our local teams so we can get back to the world series and super bowl eventually. However…he’s got the male strippers coming back to his place so boys buy some tickets for your women and let your wives/girlfriends get hot and horny so when they come home you can get some action!
    thanks to all….
    Harley the Magnificent

  7. miket. says:

    place was better as The Alameda, even tho’ to build it JCN displaced my aunt and uncle who lived in a duplex on that spot.

    so it seems i’m turning into k–raq lamenting how much things were back when.

    TPG tries for ‘blighted’ designation so they can tax users for millions, and keep their already lofty room rates the same as advertised now. some clever accountant-type bucking for a raise or promotion based on saving the co. said millions.

    so here’s a toast, with the finest bourbon of course, to the venerable Oak Room, the lobby bar where i once met Buck Buchannan, The Pam Pam coffee shop that was always busy and where i first had eggs benedict, and to those everywhere who own their actions, speak true and fair, and accept the responsibility of their obligations and stewardship.

    • paulwilsonkc says:

      I miss the original Pam Pam more than anything else that’s come and gone from the Plaza.
      I’d add Dirty Sallys, where I lived in the 70’s, but I was way under age so I’ll leave that out!

      • miket. says:

        i remember that joint. i remember going in there many times. i don’t necessarily remember leaving.

        me… i miss more the local, beloved clothing stores – the Woolf Bro’s, Rothchild’s, Jack Henry, even the johnny-come-lately Mr. Guy. my Grandmother ran a department at Harzfeld’s there (and downtown and Corinth), our dentist was on the Plaza, mom worked at JH’s for a few years – we were down there a lot.

        Trailhouse restaurant… the treasure chest….

        omg… really am turning into k-raq!!!

        • paulwilsonkc says:

          I used to buy all my clothes at The Underground, downstairs at Wolfe Brothers! The hippest, trendiest place on the Plaza in 72!!
          So I’m right there with you….

      • chuck says:

        Dirty Sally’s. Remember that chick? She had long straight hair and dressed like a Black Widow Spider.

        What was that dice game the chicks were all playing in the elevated area in the back?

  8. I saw paul McCartney when he was in town go to the intercontinental hotel.
    It was nicer as the alameda but didn’t it have 2 or 3 other owners before
    becoming the intercontinental.
    Harley says the hotel gets it’s money. Why not? They spent millions on that
    street car…fixing a hotel seems like chump change!

  9. Stomper says:

    I can’t let the mention of Dirty Sally’s go by without adding to it. Interesting that so many of the regulars here have mentioned they spent time there. A lot of us must have crossed paths there 40 years ago. Our illustrious admin and I pretty much blew most of our paychecks there in the 70’s as well. Initial draw was a well endowed waitress that we later discovered was only 13 at the time we first met her. The Lord works in many ways. Played a lot of backgammon as well. Phyllis, as many know, was a huge Elvis fan and for those lucky enough to be invited downstairs into her lair, they knew. Phyllis was married to the brother of Pontiac Super Dealer Earl Miller, 42nd and Main. Earl’s son Sam remains one of my best friends today. Good times for sure. Thanks for mentioning the place, Paul.

    • paulwilsonkc says:

      Stomper, that’s just hilarious. I lived in Carthage, but my grandfather, an exec with Coke, was more like me dad. He was a huge figure and mentor in my life and lived on the Plaza. I came up every weekend I could in 71, 72. I had a whole other group of friends up here.
      Every Sunday afternoon was spent in Volker listening to the bands.
      There was always a rumor Elvis actually was slipped in to Dirty Sallys for a brief visit. Never could confirm, but man, what a place that was.
      The bouncers liked me and never gave me an ounce of trouble, way under age!
      There will never be a club like that again. Or River Quay. I watched them all implode. Or…..explode.

    • chuck says:

      MILLER PONTIAC!!!! 4200 MAIN!!!! FREE FISHING ROD WITH EACH APPRAISAL!!!!

    • Phyliss Miller…name from long ago.
      When I was 16 I spent 10 days in las vegas with my family. Our relatives
      pretty much owned the city at that time. Stayed at the Las Vegas Hilton.
      Got to meet elvis there along with his security head dick grobe and his
      guitarist Charlie Hodge. Charlie passed awaya few years ago I think in
      Alabama or Mississippi….great people.
      One of my relatives met phyliss at the hotel and I met her before one of
      elvis’s show.
      Her claim to fame was in Elvis’s recorded concert in Hawaii she’s in the
      front row and elvis presents her one of his scarves in the video.
      Also knew the Millers….Earl was cool guy. Sam was friens with my
      relatives and we had dinner at their house that was like on 85th or 86th street on the rounded curve between mission and lee blvd.
      I saw phyliss once on the plaza after that. Nice lady. Let us into her place
      when we were underage with fake id cards from ben’s camera shop in downtown kc. Went downstairs where there was a bedroom that was
      used for “special events”. Many of the royals would be there secretly.
      Stomper …. you probably know all my older relatives from southwest high school.

      • Stomper says:

        Graduated high school in 1970. Attended Border Star until 1963/64 when my family moved to the Ks. side. I’ll also admit to being a “daisy” as the townies at Southwest called us. If your older relatives were “tribesmen” at Southwest around that time frame, I bet I at least knew them, some of them well.

        I agree with your comments about Earl Miller also. Bought my first car from him because he was Sam’s dad. Earl was a Marine and kept himself in great shape. Right up until the end he could probably do more push-ups than any guy in the room and proved it on a few occasions.

  10. Libertarian says:

    I work in the IC hotel several times a year. It is a really nice hotel, quite far from blight.

    Magnificent chandeliers in the ballroom and sky room. An occupancy rate that would be the envy of anyone named ‘Patel”. Great food. Great service. But blighted?

    Right. If that hotel meets the definition of blight, I’ll kiss your ass.

    Always good to hear from you, Wilson.

    • paulwilsonkc says:

      “An occupancy rate that would be the envy of anyone named ‘Patel”.”

      Ok, you win the Internets, Lib, for the story’s funniest comment!
      You know what I appreciate about you? Even if we’re at opposite ends of an opinion, you’re always smart, well reasoned and fair!

      I may be guilty of giggling about that all day.
      Paulie Patel

    • chuck says:

      My buddy Tom and I hung the Chandeliers at the Raphael.

      They were gorgeous I thought.

      🙂

  11. HARLEYS TAKE:
    1. super dave wrote a great article about these developers and business owners
    getting tax money. He hit it on the nail
    2. Hillary holding steady with 292 electoral votes. The states she gets those
    votes from have her winning that state with at least an 80% chance of winning.
    The states that are now battleground are Wisconsin and Michigan because even
    if trump wins ohio and florida he loses if Hillary wins Wisconsin and Michigan
    where she has a huge % chance of winning. Surprise might be Hillary winning
    florida and if she wins that its all over for dumpster. I see the debates as being
    pretty heated but trump has attention deficit disorder and how can he speak for
    an hour and a half on policies he’s never outlined. The path to victory for Hillary
    is still huge but as predicted the race is closer than expected…but America is a
    divided nation so it should be expected.

    3. Right wingers have made a huge deal about the number of police officers
    killed while Obama has been president. Of course, it’s a tragedy when any
    one of them in uniform is killed. They are heros. But the number of officers
    killed in the line of duty while Obama was president is much less than the
    numbers of officers killed during the bush/Clinton/Reagan/old man bush
    adminstrations. However…one officer killed is too much!!!!!!!!!!!!!
    4. This weekend is plaza art fair….interesting to see the huge numbers it draws
    with great weather expected. The plaza is not dead. Westport is not dead.
    they both are important entertainment and shopping areas in our great city.
    5. DEA: I’m not sure many of the readers of my writings on the 4 blogs I now
    write on have heard of kratom. Its a powder that many people have been
    taking as opposed to opiods and other pain and anxiety pills. Kratom was
    made illegal as of the end of this month and millions of americans are upset.
    It apparently was non addictive and reduced pain for many cancer patients
    and others who used it. What is the DEA/government thinking. We have a
    huge addiction crisis in the nation right now. As I said before, the pharma
    industry has a huge hold on the government and probably played a big role
    in getting this pulled from the market.
    6. Great conversations at law4life1000@yahoo.com about various topics. For
    advice on business/life/current events go to my website for further information.
    Sorry about last newsletter. Somehow constant contact wasn’t working.

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