Kansas City: Looking Ahead to the Next 10 Years

Gib Kerr • 5/1/2019
The story of downtown Kansas City’s remarkable comeback is one in which we can all be proud.

Kansas City Skyscrapers

We have seen amazing progress, with cranes and construction on nearly every block and streets bustling with activity. The questions I hear most often now are: “When will it stop?” and “What’s next?”

Looking Back – Progress in the Last 10 Years

Before I try to answer those questions, let’s recap Downtown’s recent successes:

  • Downtown’s residential population has surged to roughly 27,000 people and is expected to pass 30,000 in 2020. Over the last decade, we have added about 1,200 to 1,500 apartment units per year, which equates to an average of about 2,000 residents per year.
  • Downtown’s office vacancy rate has dropped from 17 percent to under 10 percent since 2010. The average rental rate has increased 25 percent during that time.
  • After going 30 years without a single new hotel development, Downtown has 14 new hotels—either built or under construction—adding over 2,600 rooms and helping make Kansas City a much more attractive convention destination.
  • The streetcar starter line has prompted over $2 billion in new development. The population along the streetcar line has tripled. Property values of development sites along the line also have tripled in many cases. Surface parking lots are vanishing rapidly.
  • Over 2.5 million square feet of historic buildings have been redeveloped, mostly from office to residential or hotel. As the inventory of historic structures disappears, we are transitioning to new construction with several landmark projects such as One Light, Two Light and Arterra luxury apartments.

Looking Ahead – Next 10 Years

To answer the first question, “When will it stop?” it simply won’t stop. We may slow down briefly when the economy inevitably takes a pause from its recent growth streak, but Downtown’s resurgence will benefit from the “snowball effect” whereby success attracts more and more activity. This is not just a trend—downtown Kansas City is in the early stages of a whole new chapter.

As for the second question, “What’s next?” I gaze into my crystal ball and predict that over the next 10 years, we will see the final pieces of Downtown’s revitalization fall into place. After experiencing tremendous success with residential, hotel and entertainment development, we are now moving into an exciting era of office and retail growth.

New commercial activity will be driven by the rising Downtown population and the desire among employers to locate offices where the millennials want to be (which is, of course, Downtown). In a tight labor market, where companies have to compete to attract the top talent, being located in the right place makes a huge difference.

The streetcar extensions (north and south) to Berkley Riverfront and through Midtown to the Plaza and the University of Missouri—Kansas City will lead to significant increases in development activity and population along the lines. On the riverfront, where apartment development is already under way, expect to see a transition to higher density mixed-use projects. Berkley Riverfront’s Master Planned Development calls for up to 5 million square feet of office, retail, hotel and multi-family.

The land rush along the Main Street streetcar extension through Midtown already has begun. Transit-oriented developers are seeking prime sites of one to two acres for mid-rise apartment projects. While the $316 million southern extension is contingent upon a $151 million federal grant, the pundits are optimistic that the funding will be approved and the extension will be completed in three or four years.

For over a century, Kansas City’s development pattern has primarily been along a north/south axis. In an interesting twist, however, development is starting to push eastward from Downtown. A prime example is East Crossroads, which is emerging as the hub of “Hipsterdom” in Kansas City. Led by artists and local craft brewers and distillers, East Crossroads has become one of the coolest and most entrepreneurial locations in town.

The 18th Street corridor, linking East Crossroads to the 18th & Vine historic district, also is attracting a lot of attention. JE Dunn Construction’s proposed Keystone District is expected to draw $90 to $120 million in new development at the site of Kansas City Area Transportation Authority’s (KCATA) current headquarters.

Last but not least, for the first time in decades, we are witnessing new construction along Troost Avenue, primarily near Hospital Hill. This is a fascinating trend that bodes well for our city on many levels, and I expect the Troost turnaround to extend south all the way to 85th Street over the next decade.

With all of this development activity, many believe that the one thing missing is a baseball stadium for the Kansas City Royals. The Royals better hurry, though, if they want to move Downtown because development sites are going fast.

My final prediction: The Royals will see the light and realize that their attendance and prices would be much improved by a Downtown location. They will hire local sports architects to build the coolest stadium in Major League Baseball—right here in River City as the crown jewel of Downtown’s epic comeback.

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