Commission hands off downtown office-hotel proposals

Members of the Springfield Tax Abatement and Tax Increment Financing Commission, however, lacked consensus. At least two commissioners expressed frustration with the priority placed on a stand-alone headquarters for accounting firm BKD LLP.

At a July 2 meeting, commissioners voted 7-2 to forward the proposals to council with a caveat that the site – 1.7 acres sandwiched between the Springfield Exposition Center and Jordan Valley Car Park – include a BKD headquarters building and a future hotel.

Split plans

Council members are now tasked with selecting one of four firms that responded to a request for proposals the city issued in late April. In that request, developers were explicitly instructed to include an office building with at least 100,000 square feet of Class A office space and a four-star hotel with at least 150 rooms.

Branson-based HCW Evergreen LLC, BC Development Co. of Kansas City and John Q. Hammons Hotels & Resorts LLC each submitted hotel-office tower proposals while Opus Northwest LLC, also of Kansas City, pitched a BKD headquarters building and a “pad” for a future hotel.

At the meeting, commissioners learned that each of the firms proposing a hotel-office tower had agreed to split the two components into separate buildings during negotiations with city staff. Doing so allows construction to begin immediately on an office for BKD, which is nearing the end of its long-term lease in Hammons Tower.

Mike VanBuskirk, a Kansas City-based commercial real estate agent representing BKD, said the high cost, low functionality and lengthy construction schedule associated with a hotel-office tower were deal-breakers for BKD’s relocation to the site.

Choosing sides

But dissenting commissioners Sally Hargis and Dave Coonrod along with Tracy Kimberlin, executive director of the Springfield Convention & Visitors Bureau, questioned whether BKD’s needs had trumped downtown Springfield’s best chance to compete for convention business with a four-star, full-service hotel.

“Whatever decision is made on this lot is monumental to the future of convention business in Springfield,” Kimberlin said. “If we don’t do it right this time, there is no future opportunity. Period.”

Greene County Presiding Commissioner Coonrod said he was philosophically opposed to “crafting this whole proposal around BKD’s needs.” He also questioned whether the accounting firm’s economic impact would come close to that of a hotel and convention center.

“I don’t see that it’s a fit,” Coonrod said. “I don’t care how many lunches they buy downtown.”

Hargis, vice president of corporate strategy for Ozarks Coca-Cola/Dr Pepper Bottling Co., and Coonrod shared the opinion that Opus Northwest failed to meet the RFP criteria. Hargis suggested the proposal was “anti-hotel.”

According to its proposal, Opus Northwest consulted an independent hotelier who said that “current market conditions, rack rates and occupancy do not justify the development of the suggested hotel component at this time.”

Dave Harrison, vice president of real estate development for Opus Northwest, agreed that a hotel can be built on the site with “creative architectural design,” but he said his firm’s position hasn’t changed. Building BKD’s headquarters and leaving space for the hotel is the best strategy, he said.

“I’d argue it makes it easier for a hotelier to come in,” he told the commission.

City consultant David Queen, a public finance attorney with Kansas City firm Gilmore & Bell PC, reminded commissioners that specifics of the proposals would likely change over time and that economics would ultimately dictate whether a four-star hotel is built.

“It’s easy to love the idea of a hotel,” Queen said, adding that convention center hotels in Branson, St. Louis and Overland Park, Kan., were subsidized with tens of millions of taxpayer dollars.

Queen said he was “over 50 percent confident” that HCW Evergreen and Hammons would proceed with plans for a free-standing hotel if chosen by council to develop the site.

Driver’s seat

Two council members who attended the commission meeting shared their views about the viability of a hotel.

Councilman Denny Whayne questioned whether the city is forcing the issue while Councilman Ralph Manley said the hotel is a must for Springfield to compete for conventions.

“We may picking the wrong thing to drive the project,” Whayne said. “Everybody wants a hotel down there. Is a hotel the right thing to drive the project?”

HCW Evergreen President Rick Huffman told commissioners that his firm’s proposal hasn’t changed significantly and that the design was only modified to accommodate BKD’s timeframe. He urged council to move quickly and select a developer.

“The more people you’ve got to negotiate with, the longer it strings things out,” he said.

City Economic Development Director Mary Lilly Smith said city staff plans to recommend a developer to council in late July or early August along with a term sheet detailing the proposed deal. If council approves the terms, the city would move forward with a legally binding development contract.