1. Ordinance160163 Planning, Zoning and Economic Development Committee 5/11/16 Grand Reserve

2. Location of Project  Most of the block, between 9 th and 10 th, Grand & McGee

3. Project Overview  9 th and Grand  301K s.f. adaptive reuse – historic building  Vacant 8 years  301 Room All-Suite Hotel, 24 Room Boutique, 150 stall parking garage, 85K sf data center  $146M Project  252 New Hospitality Jobs and 11 Data Center; Total 263

4. Current

9. Proposed

10. Presentation Overview  Financial Analysis - But-For/Cost-Benefit Analysis  Conservation Study  TIF Plan and TIF Project  Sales Tax Contribution  Chapter 100  Project Summary  Council Action

11. Financial Analyses Tom Denaway, Springsted Incorporated

12. But-For TOTAL$146M Unleveraged IRR w/o Incentives7.05% Unleveraged IRR w Incentives10.14% Average Market Rate IRR10.48%

13. Cost Benefit Analysis Net Impact 23 years 50% fixed cost City$51.1M Jackson County$10.9M KCMSD$1.5M Library$363K Other$62.7M* $61.3M benefits State. Other $1.4M split between TJs

14. Conservation Study Scott Belke, Belke Appraisal & Consulting Services

15. TIF Plan/Project 1 Dan Moye, Economic Development Corporation of Kansas City

16. TIF Plan  Conservation Area "50% or more of structures are 35 years or older... and at risk of becoming blighted" - RSMo 99.805  TIF Plan supports redevelopment of hotel  Includes public infrastructure improvements  Meets But-For & Conservation Tests and Other Required Statutory Findings

17. Project 1  301 Room All Suite Embassy Suite Hotel  $570K in Public Improvements – Streetscape, Sidewalks, Lighting  Completed 2018  Adaptive Reuse of Historic Federal Reserve Building (8 years Vacant)

18. Public Improvements

19. Sales Tax Contribution Kerrie Tyndall, Office of Economic Development

20. Overview  23 years contribution  Project 1 – 50% Certain Sales Taxes Not Otherwise Captured by TIF; 70% F&B Taxes Not Otherwise Captured by TIF; and 70% Hotel/Motel Taxes Not Available via TIF  Adjoining boutique hotel – 70% Hotel/Motel Taxes  Average Annual Capture - $513K  Capped at $11.8M  Certification of Expenses through TIFC  Provides critical gap funding to project needed, along with other tools, to generate feasible IRR

21. Chapter 100 Katherine Carttar, City Planning

22. CH 100 Plan  $135M Bond Issuance  $112.1 million Real Property Investment  $19.6 million Personal Property Investment  RP Abatement – 20 Years  PP Abatement  Project I – 10 Years  Project II – 5 Years  Sales Tax Exemption on Construction Materials  Clawback  If the Developer’s capital investment does not meet the goals stated, then the PILOT will increase on a pro rata basis.

23. Project Summary Kerrie Tyndall, Director of Economic Development

24. Economic Productivity Indicators Activation of Business Use - 301,000 sq. ft. of vacant, historic building put into active business use Increased Property Values - Current AV = $2.9M; Projected at $14.1M (2039); 381% increase Increased Taxes - Current Annual RE Taxes (2015) = $213K; Projected by 2033 - $1.2M New Jobs and Income for Residents and Businesses - 263 new jobs with avg. wage of $35k; $20M Net New Business Related Taxes – Sales/Earnings TJs Held Harmless. By Year 10 – KCMSD ($460K); Metropolitan CC ($10k)

25. Council Action  Omnibus Ordinance  Approves TIF Plan/Project & Activates Project 1  Authorizes Execution of Sales Tax Contribution Agreement  Approves Ch 100 Plan and Authorizes Issuance of up to $135M in conduit bonds  Establishes an accelerated effective date

26. Developer Comments Doug Stone, Lewis Rice

27. Questions?