SerpApi.Org
The developers behind a proposed 20-story data center tower in downtown Kansas City say it will be unlike the artificial intelligence facilities that companies like Google and Meta are building.
And they say it could drive upward of $25 million in new tax revenue for local government.
But it’s not clear if the project will even happen.
The companies working on the proposal for 934 Central St. staged a public meeting Monday to share more details and answer questions ahead of a scheduled public hearing in August.
The tower would include retail space on the ground floor that could include something like a coffee shop. It remains under city review.
20-story data center in downtown KC?
Revitalization Unlimited, a Miami-based investment fund with a focus on historic buildings, is behind the project. CEO Steve Austin said Monday that, compared to AI data centers of a massively different magnitude, this facility would be considered basic, modern-day infrastructure.
“Every time you’re accessing Facebook on your phone or an app, and you’re posting something, you’re getting a cell phone call, you’re using Microsoft Office, watching Netflix,” he said. “Those are the types of things that run through these types of urban data centers that we’ve all known, become very accustomed to with our everyday life.”
Austin said urban data centers are located where they are because they need to be close by to work quickly. He said companies like T-Mobile, AT&T and Verizon invest heavily in urban markets to support their customers.
Also, he said, these kinds of projects drive significant tax revenue into the local community: perhaps for schools, police and fire service.
“But at the same time, it has very little stress on things like your roads and traffic,” he said, adding that the data center would have less burden on the area and its services than something like a multi-family project that could add thousands of new people.
Developers also say that the tower would produce its own electricity - 30 megawatts - on site with natural gas fuel cells, off the Evergy grid with diesel generators as backup, and would not affect electric bills. Austin said the system would create electricity without combustion with hydrogen and water as the byproduct.
According to project documents, the tower would use a “closed-loop” cooling system that would limit water usage and be more efficient. The developers estimate the annual water demand would be 70% of what an 18-hole golf course uses in Kansas City.
The developers also say the building would be designed so it could be reused as housing or offices if it’s no longer a data center in the future, while the floors that produce noise and sound would be higher up and direct noise and heat away from the street.
They say the noise level would usually be like typical urban background noise, or no louder than a busy urban street at its loudest when using equipment during an emergency or a monthly test.
Western Newspaper Union Building
Plans filed with the city show that the project would include demolishing and replacing an existing building on the site.
On the property now is the Western Newspaper Union Building, which is over 100 years old and listed on the National Register of Historic Places. The building was once a hub for printing services and provided thousands of weekly newspapers throughout the country with content.
More recently, the building has been used for offices and short-term rentals and was rehabbed in the 2010s.
Asked why this site for the data center tower, the developers’ answer was simple: it’s the site they own.
Austin also emphasized that the proposal remains preliminary and that the developers have to go through the process to see what their options are.
“We have no idea if this project is even financeable,” he said.
Project questioned at public meeting
Attendees questioned the developers on how the data center tower proposal squares with Revitalization Unlimited previously putting a historic preservation easement, a type of legal agreement meant to protect historic structures that limits how they can be developed, on the property.
According to the company’s website, it buys historic properties with “valuable development rights” and places them under a preservation easement, which gives investors a “charitable tax deduction” that enhances their return and lowers investment risk.
“We focus on stabilizing and optimizing the property’s cash flow, which may involve redevelopment,” the website says. “This process can attract federal and state tax incentives that cover 40% or more of the redevelopment costs.”
Austin said the property’s future will depend on whether the tax deduction can be claimed and how the process unfolds, which includes answers from the city on what can legally be done with the building - following city code changes in January.
“You have to be able to demonstrate that the project has real merit and is feasible, and so to do that, we’ve got to be able to go through the same exact process that you would do if you’re going to actually build the building,” he said. “Which means I’ve got to be able to show a loan officer at a bank that I have a viable project that is fundable, and then we can make that decision, at that point in time, whether to move forward with preservation or the development, or to change and go a different course.
“That’s this process that you’re seeing unfolding. It’s not that we’re being cagey and trying to not tell you what we’re doing. We don’t have any way of knowing,” he said.
The hope, he said, is for investors to be able to claim the deduction and preserve the building. If the deduction is claimed, which would need to be later this year, that would permanently strip away development rights under the law.
Austin noted that another Revitalization Unlimited project, a rehab for the Garment House building at 1000 Broadway Blvd., is moving forward.
Historic preservationists oppose project
Historic KC, a historic preservation group, has publicly opposed the data center proposal.
On Monday, Executive Director Ethan Starr posted the question: “Given all of what we know, answer me this: Would you characterize this as a serious proposal?”
“Yes,” Austin said, “because if we don’t take the deduction, we will build something.”
He said the process is not about getting a larger or smaller deduction, but whether there will be a deduction at all.
A public meeting before the City Plan Commission is scheduled for the proposal on Aug. 5.
In a Tuesday statement, the Downtown Neighborhood Association also said that it opposes the project. The statement noted the availability of many empty lots nearby.
“The firm’s own description of its business model raises questions about whether construction is the real goal,” the statement said.
The neighborhood association said that, as it understands the historic preservation easement deductions to generally work, the value of the deduction is tied to the development potential given up.
“So the more valuable the use that can be claimed for the site, such as a 20-story data center, the larger the potential deduction, whether or not the project is ever built,” the statement said.
In the company does intend to build, the association said it opposes the project without reservation because “this data center does not benefit the community, and the public has made clear that it is unwanted.”
