Kone Centre to be minimum 10 stories, wont feature retail space

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By Dustin Lemmon | Wednesday, August 20, 2008 10:34 PM CDT | () comments

The planned Kone Centre in Moline might be several stories shorter because the developer says tough economic times have made it difficult to get signed commitments for the space outside the anchor tenant.

When first announced last September, developers proposed a 20-story mixed-use building at Bass Street Landing, 17th Street and River Drive, that would be the tallest in the Quad-Cities.

But Rodney Blackwell, managing principal of Financial District Properties, which is the developer of the property, said Wednesday the height of the building is still in flux.

“It’s going to be 10 stories and residential,” Blackwell said. “We don’t know how high, anywhere from 12 to 18 stories. It depends on how much residential it will sell. The only thing we definitely know is, it is a 10-story project.”

Blackwell said the 10 floors are a definite because the majority of that is office space for Kone, the elevator company that is moving its downtown offices. He said economic times have changed even since last year’s announcement of the tower. And rather than have a higher percentage of vacant space in the residential portion of the tower, “I’d rather have it 90 percent full” before it is built.

Alderwoman Dorothy Armstrong, Ward 7, was sad to hear the building may not be the tallest between Chicago and Des Moines, as originally proposed.

“I’m disappointed, I can tell you that,” she said. “It’s a good project. It depends on how much incentive we can give him (to build). I have lots of questions.”

Alderman Mike Carton, Ward 2, noted that the city is still waiting for more details about the project.

“I’m sort of disappointed with the latest decision, but I guess it’s not a big surprise,” Carton said of the height. “From the beginning, we haven’t had a lot of information. The only tenant we have known of is Kone.”

Alderman Mike Crotty, Ward 6, was already skeptical about the proposed height and thinks a shorter building is more feasible. He said an 18- to 20-story building might be out of place in downtown Moline.

“I’m glad the developer hasn’t tried to overextend himself,” Crotty said. “It was quite an aggressive plan from the beginning. I think the 10 stories will still be a landmark in Moline.”

Moline City Administrator Lew Steinbrecher said the city’s main concern is that the building is tall enough to keep Kone in Moline. Without it, the company could move.

“The (original) height of the Kone Centre was more a manifestation of the developer than the city,” he said.

Steinbrecher is not surprised that the scope of the project has changed, but he said developers need to move forward after signing a $9 million lease with Kone Inc. last month as the anchor tenant.

“The project has constantly changed,” Steinbrecher said. “Rodney really does need to move forward now that he signed the lease with Kone.”

Steinbrecher said the city is still waiting on information from Blackwell before proceeding with an agreement for the project and a new tax increment financing district that includes a $17.5 million rebate over 23 years.

The city needs a copy of the lease with Kone, legal documents showing the creation of Financial District Properties, a letter from a bank indicating interest in the project, $40,000 so the city can hire a consultant to help create the new TIF district and financial projections for the project with and without the new TIF district, Steinbrecher said.

Regarding concerns or objections about the TIF agreement being worked out between the city and Financial District Properties, Blackwell said the Bass Street Landing site currently is generating no tax revenue.

“The site takes in zero dollars. We are going to have a building that will have high taxes,” he said. “We are going to need 90 percent of it rebated back to the developer for a 23-year period. But even with 10 percent available in taxes to the city, that is more than what is coming in now.

“I am creating property taxes, and at the end of 23 years” the property will generate $700,000 to $1 million a year in property taxes for the city, he said.

Steinbrecher is not surprised that an agreement has yet to be reached.

“Because of the (current) financial and real estate markets, any type of project like this is much more complicated and takes longer,” he said. “I’m optimistic the project will come through, but a lot of details need to be worked out.”

Carton thinks it’s wise for the City Council to take its time reaching an agreement.

“I don’t think we should try to rush it,” he said. “I’d rather see all of the information in front of me.”

Dustin Lemmon can be contacted at (563) 383-2493 or dlemmon@qctimes.com. Comment on this story at qctimes.com.