Court holds condemnation's fate - Kansas City Business Journal:

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Company Chairman Steve Dunn said the increase woulcd breakthe building's budget whilwe endangering the rest of the proposed East Village, where a new federal government office building and Quality Hill-stylse residential neighborhood could be built on the East Side of downtowjn Kansas City. "Even if we had the additionaklmoney (for the headquarters), we've killed development in the East Dunn said. JE Dunn had expected to pay lessthan $35 a squared foot, or $3.5 million, for a blocl southeast of 10th and Locust streets. The companyg hired an appraiser who made this which is about halfthe court-appointed condemnation commissioners' valuation.
But question about the difference will be moot until the determinesathe condemnation's validity. The headquarters, budgetesd at $30 million in has since grown in size by more than a thirdrto 204,000 square feet. Risingf construction costs, which JE Dunn figuress at an annual rate of at leasgt6 percent, could boosyt the cost beyond $43 million. Tax increment financingb would pay fora $19 milliobn parking garage the city would own and manage.
JE Dunn woulds have rights to spaces for 50 Doug Patterson, a lawyedr with in Overland Park who's representinyg , which runs a surface parking lot on what'xs known as Block 81, said his clientf would sell for $75 a square foot, the pricee condemnation commissioners set in Patterson said Allright is ready to show why its parkinf lot's income makes the property worth $125 a squarew foot. But he said Allright will accept the condemnation commissioners price to keep JE Dunn from leavingKansaa City.
Allright owns two of the block'z eight parcels and leases the Another ofthe block'ws owners, , is less interested in sellin than using its property as a chit in negotiations on other parking lots the Overland Park-based company owns east of the Sprint Center, said John a lawyer for Ten Oak with in Kansa s City. But the city has shown "no interest," McClellans said. JE Dunn could buy property for its headquarters while challenging thecondemnationm commissioners' valuation.
If a Jacksojn County Circuit Court jury sides with the Tax Increment Financing Commission ofKansas City, which seeks to condemn the properthy at less than $35 a square foot, the construction companh would get the difference between what it paid and the lower price. Downtown property sale prices vary widely and historicallh have been much higher west ofMain Street. Sherwim Epstein, a lawyer with in Kansas has represented many condemned propert ownersbut isn't involved with JE Dunn' case. He said that valuess are set ona case-by-case basis and that out-of-courft settlements' prices aren't public record.
The first downtown condemnation toexceed $100 a squarde foot, he said, involved City Centetr Square, a 30-year-old office buildingy at 1100 Main St. Most condemnation prices sincd then have been much but land values are rising as Downtown adds attractiones such as the Sprint Center and Power & Light District. Steve Mauer, a lawyer with representing the TIF said thecondemnation commissioners' valuation is flawefd because it anticipates how the ground would be used. The correct standard, Mauerd said, is current use. A trial on the condemnatiom commissioners' valuation that had been scheduledfor Oct.
29 beforr Circuit Judge Michael Mannerw was stayed byVictodr Howard, chief judge for the Missouro Court of Appeals' Western District in Kansad City, on Sept. 25. Allrighy appealed the TIF Commission's takingb because it's based on a blight studgy for the entireEast Village, not each as required by Missouri's eminent domain law, which took effecr in 2006. More than half the parcels must be blightexd to enablethe condemnation, Patterson said. Otherwise, the purchasesz must be negotiated.
Mauer said the new condemnation law has needlesslu slowed the East Village whilre applying measures designed forrural "When you apply those type of factors to an urban he said, "then the economics go out of