Hotel hallway
Patrick Tuohey

For years, a development group led by former Kansas City politico Mike Burke has been trying to close a convention hotel deal downtown. It’s tough to know exactly what is going on, but recent news stories do not inspire confidence. Eight months ago, we wrote that the group still did not have financing in place, despite saying a year earlier that they did. As of June 7, 2017, they still don’t. It’s one more missed deadline in a project beset with delays—before ground has even been broken.

They do, finally—maybe—have a guaranteed maximum price (GMP) from project general contractor JE Dunn. According to The Kansas City Business Journal, JE Dunn “provided the final GMP proposal two weeks ago.” Burke described the number as “preliminary,” making it reasonable to wonder if the price is actually guaranteed.

The Star now says that Hyatt has pulled out of the convention hotel project. This news wasn’t made public weeks ago when it happened, nor has the development group revealed how much the new hotel company, Loews, is investing in the project. This is no surprise; Burke’s group has previously refused to provide information about the hotel. When asked by The Pitch in 2015 to share information about the project, he said,

There's some sensitivity to releasing anything that's old or anything that causes us grief with the bond buyers," Burke tells The Pitch. "The minute we put it out, somebody with the Show-Me Institute will say it's unrealistic."

Not only are we left wondering how much the hotel company is investing, but we also don’t know who the other investors are. Those who watched the Planning and Zoning Committee hearing on June 7 saw conflicting testimony. Development team member Steve Rattner now tells the committee, “the financing is in place; we’re ready to go.” Mind you, it was supposed to wrapped up by March or April, and Rattner said it was in place back in October 2015. But the project attorney, Roxsen Koch, said that drafting the bond documents will take months and only after that—in early August—will the financing be in place. How confident should we be that deadline will be met?

Those aren’t the only examples of information from the hotel’s development team being hard to come by or subject to change. Two months ago, Burke promised a summer groundbreaking. Now, he says groundbreaking has been moved to October. Before that it was spring 2017; and before that early 2016.   

Even members of the committee were hesitant to endorse predictions from the development team. Chairman Taylor called for a motion to advance the matter to the full Council and the committee members sat in silence for 9 seconds before Councilwoman Katheryn Shields laughed and offered the motion herself. (See here.) That delay likely represents a well-founded lack of confidence that this project will deliver as promised.

About the Author

Patrick Tuohey
Patrick Tuohey

Patrick Tuohey is the Director of Municipal Policy at the Show-Me Institute.