The city council's finance and audit committee voted to approve issuing up to $20 million in revenue bonds for improvements to the building. Plans call for a private developer, Homkor of Missouri, to turn the property at 613 Garfield Ave. into an office and apartment building.
The ground level, second and third floors would be converted to office space, with the top seven floors turned into 224 apartment units. The city would occupy the offices on the first two floors, using them for police property, the fire marshal's office and emergency preparedness and storage. A tenant for the third floor as yet to be named.
Earlier, the city had agreed to start leasing the space next year at a yearly rate of $985,964. The developer, in light of securing the bond money, has dropped the lease rate to $167,000 per year. Apartments are estimated to have monthly rents in the low $500's.
Homkor agreed to buy the building from the city for $225,000 in 1998, but did not close until last June. The company approached the city about funding after being unable to get financing from traditional lenders. With city funding, the developer may not sell or refinance the property without permission.
Kansas City bought the building from the department of Housing and Urban Development for $1 in 1992. In the late 1980s, HUD seized the vacant building after the University of Health Sciences defaulted on a mortgage balance of about $14 million. The hospital was constructed in the mid 1970s.
The revenue bond proposal now goes to the full city council. If given the go-ahead, construction could begin as soon as next month. Estimated construction time is nine months for the offices and apartment completion in the summer of 2002.
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