The Next American Dream : Kansas City : A Documentary Film

July 14, 2005 | Kansas City Star

Downtown buildings might become living space
St. Louis firm aims to renovate 3 KC structures for lofts, apartments
By Kevin Collison

A St. Louis firm is planning a big splash in the downtown Kansas City residential rehabilitation market and wants a 2 million-square-foot portfolio of buildings by year’s end.

McGowan & Walsh Historic Renovators appears to be off to a fast start.

The company is partnering with Michael Rainen to renovate two landmark warehouses in the Freight House District into housing, the 220,000-square-foot H.D. Lee Building at 20th and Wyandotte streets and a 165,000-square-foot building at 2117 Broadway. The two projects would add more than 240 lofts to the area.

The firm also plans to renovate the historic Argyle Building at 306 E. 12th St. into 100 market-rate apartments. Two restaurants are planned for the first floor of the 100-year-old building.

“In the next three years, McGowan & Walsh will probably build close to 2,000 units in downtown Kansas City alone,” said Kevin McGowan, one of the partners.

McGowan said his firm has been a major player in the redevelopment of downtown St. Louis, where it has done about 2 million square feet of historic renovation projects. Many are along Washington Avenue, a downtown artery that has been revived in recent years.

“Borders plans to move there and if you get Borders, it’s the Good Housekeeping Seal of Approval,” McGowan said. “The good news for Kansas City is that the climate is the same as St. Louis when it comes to state and federal historic tax credits.

“We think the demand in Kansas City is even more than St. Louis and we can’t keep up with it in St. Louis.”

Jim Cloar, president and chief executive officer of the Downtown St. Louis Partnership, said McGowan and his partner, Nat Walsh, were energetic and aggressive.

“They both have an excellent reputation individually and collectively,” he said. “The good thing they’ve done is when they take old buildings, they make sure they have good quality retail on the ground floor. It helps bring life to the street.”

Rainen said McGowan approached him about working together to redevelop the H.D. Lee Building. Rainen had announced a plan to redevelop the nine-story building into lofts and commercial space in December 2002, but had made little progress since. The project depends on the construction of a parking garage.

“He (McGowan) approached me … and offered me the proverbial deal I couldn’t refuse,” Rainen said. “They are really solid guys with a great track record.”

McGowan said he and Rainen also planned to complete their purchase of the eight-story building at 2117 Broadway soon.

Should their plans to renovate the two warehouses be fulfilled, it would mean the three largest warehouses in the Freight House District would find new life as housing. Developer Roger Buford recently renovated the seven-story Stuart Hall building at 2121 Central St. into 118 luxury apartments.

“We think we’re sitting pretty,” McGowan said. “We have two of the largest properties down there and we’re looking for more.”

Construction of the H.D. Lee project is expected to begin next spring. McGowan expressed confidence a way would be found to build the garage for residents required to make the project successful, but provided no specifics. The estimated cost for the H.D. Lee project, including garage, is $30 million. The renovation of 2117 Broadway is expected to cost $18 million to $19 million.

The Argyle project, which he hopes to begin before the end of the year, is expected to cost $14 million. McGowan is negotiating with the city to obtain parking for Argyle residents in the adjacent city-owned garage.

Suzie Aron, a real estate broker and president of the Crossroads Community Association, said 2117 Broadway and the H.D. Lee Building should be attractive as residential properties.

“Those two buildings have the best views of any buildings; any way you look is spectacular,” she said.

McGowan said his firm was close to acquiring other properties, but he declined to identify them.

“We expect, before the end of the year, we’ll have 2 million square feet in Kansas City, all downtown,” he said.