After years of delay Rialto, a Florida real estate firm, and the city have reached an agreement to get repairs completed to the facade of the Vogue condominiums and its parking structure downtown.
Those fixes could add momentum to efforts for leasing several retail spaces on south Douglas Street that were part of the Hartley Block project, which would be a boon to downtown.
The Lee’s Summit City Council at its July 24 meeting approved an agreement by an 8-1 vote to pay Rialto money accumulating in the Hartley Block Tax-increment Financing District to complete the work in that development.
The city approved the Hartley Block TIF in 2006 undertaken by local builder Kurt Pycior, but a recession buffeted the project and Rialto took over the property. Pycior had refurbished some buildings and added some structures.
The 48-space parking garage has substandard construction and is failing, so it never fully opened and the facade of Vogue building also has spots where it is breaking off the building Douglas south of Third Street. Inside more work was needed to make condominiums ready for sale. Since March 2011, when Rialto acquired the property, the city has been trying to sort out the mess with Pycior, who had the original agreement for the TIF and Rialto.
Only three of 18 condominiums are occupied in the Vogue building, which has retail shops fronting Douglas Street, and while parts of the project are leased, others have been vacant for a long time. The prominent southeast corner of Third and Douglas had tenants, but now has been idle for years and seen as a keystone.
“It is an eyesore for downtown and the sooner it’s resolved the better,” said Councilwoman Diane Seif.
Councilman Rob Binney, the sole vote against the project thought Rialto was getting too sweet a deal. He said the company bought the project for “pennies on the dollar.” In the deal worked out with Pycior the city would have shared public parking with the condos for free, now it is leasing parking paces for up to 20 years at $840 a month.
Under the deal Rialto will get about $300,000 of TIF money, once the garage is fixed and open. It also in final day of negotiation managed to reduce the number of public spaces from 34 to 28. The city will end the TIF when the parking structure is fixed and the city, schools, libraries, etc. will again start getting property taxes from the project.
Conrad Lamb, the city’s finance director, said the rate for leasing the parking spaces owned by Rialto will be about the same as other public parking it leases downtown.
Matt Sonntag, vice president of Rialto’s real estate group, told the council the parking lease was to cover the city’s share of maintenance for the structure.
He said the company’s plan is to stabilize the project and in the long-term sell the properties. The deal is the “global agreement” to get the project finished.
“We want to make it a success and flagship for downtown Lee’s Summit,” Sonntag said.
Councilman Derek Holland said the city is resolving a project that went bad, which is why it should accept the deal negotiated by staff and Rialto.
“Now we’re trying to resurrect it,” Holland said. “That’s what we’re getting.”