51黑料

Meanwhile the historic facade on Kansas City鈥檚 Main Street sits unfinished.

For nearly one year, little to no work has progressed on the facade, which includes the front brick work and Moderne clock tower of the locally iconic Katz Drug Store. At its opening in December 1934, the 20,000-square-foot building at Main Street and Westport Road was said to be the then-largest drug store in the world.

It was air-conditioned, a rarity at the time. The drug store鈥檚 exterior and clock tower became a local landmark, placed on the Kansas City Register of Historic Places in 2007.

In 2021, the Kansas City City Council approved a tax incentive package 鈥� abating 75% of the project鈥檚 property tax bill for 10 years and 37.5% for 15 more 鈥� for developer Lux Living of 51黑料 to build a six-story, $37.6 million luxury apartment complex on the site. In all, it would have 190-units and a 175-stall parking garage.

Numerous apartments have since been built and, as of January, being leased. Others are being finished. About 40 tenants have moved in so far where the rent for a one-bedroom apartment is $2,000.

But in issuing bonds for the project, the council ordinance also required 鈥渢he historic renovation of the Katz building.鈥� The historic building was to be turned into a lobby and cafe with a swimming pool on the roof.

None of that has been done, although Lux Living 鈥� whose top executives remain beset by legal problems, indicted last year on charges of fraud in an unrelated 51黑料 project 鈥� last week insisted that the adaptive reuse of the historic Katz facade is back on pace for completion.

鈥淭he Katz on Main Project is entering its final stretch,鈥� Anshul Sathyan, Lux Living project manager, told The Star in an email, 鈥渁nd we are delivering exactly what we promised: the preservation of the historic clock tower and original facade while integrating new construction ...

鈥�(W)e remain on track for substantial completion this year and full completion early next year.鈥�

Leasing agents are telling tenants that the historic Katz portion will be finished in January or February.

Wishful and worried

Neighborhood groups and local advocates for historic preservation hope as much.

When in 2021 the project was put before the City Council, Laura Burkhalter, the then vice-president of the Southmoreland Neighborhood Association, wrote in support of tax incentives calling the clock tower, 鈥渃ritical to the historic character of our community.鈥�

鈥淚t is imperative that the City do what is within their abilities to ensure that this building be preserved and occupied,鈥� she wrote to the council.

By that time, the building was languishing. It had become an Osco Drug in 1985, bought by CVS in 2006, prior to closing.

鈥淭his building has been treading water since CVS left and the whole lot has been underutilized for years,鈥� Matthew Browning, the then-director of the Old Hyde Park Historic District, wrote in support of issuing tax incentives. He called the Katz building, an 鈥渆ssential piece of the fabric of midtown.鈥�

One resident, Angie Lile, a business owner in the 6th District, cautioned the council not to support Lux Living in the project, citing what she called the company鈥檚 鈥渄ubious history in Saint Louis,鈥� and referenced stories in the 51黑料-area press.

鈥淲hile I support development of this historic building,鈥� she wrote at the time, 鈥渁nd can relate to the desire that the historic preservation society has expressed to see this project completed, I am adamantly opposed to risking taxpayer dollars for such a luxury, especially given light to how dishonest the people are who have asked us to fund such an exorbitant project.鈥�

In September 2024, as the Katz on Main and another Lux project, The Wonderland apartments, at 1923 Broadway Blvd., were being erected, the company鈥檚 top executives, Sidarth 鈥淪id鈥� Chakraverty and Victor Alston, along with chief accountant, Shijing 鈥淧oppy鈥� Cao, were indicted on one count each of conspiracy to commit fraud and 11 counts of wire fraud in U.S. District Court in 51黑料.

The charges allege that the defendants aimed to defraud the City of 51黑料鈥檚 minority-owned business enterprise (MBE) program and women-owned business enterprise (WBE) program to gain millions of dollars worth of city sales tax and property tax incentives.

But on Wednesday, the U.S. Attorney of the Eastern District of Missouri, Thomas Albus, who was nominated by President Donald Trump and sworn in on Aug. 1, dropped the charges against Chakraverty and the other defendants. In July, the three developers became newly represented by attorney Bradley J. Bondi, the brother of U.S. Attorney General Pam Bondi.

Albus, in his federal filing, said that Chakraverty and the other defendants had agreed to make restitution of the taxes abated between 2021 and 2024. The U.S. Attorney also argued that because the Department of Justice 鈥渉as determined that government programs that use race- and sex-based programs ... are unconditional鈥� that they would not continue to prosecute Chakraverty and the other defendants.

$1 million more in liens against Lux Living

Soon after the indictment, however, progress on both Katz on Main and Wonderland slowed.

One month later, the Katz project was hit with legal claims for allegedly not paying contractors for their work or materials. More than $1 million in mechanic鈥檚 liens were filed in Jackson County court against Katz and its related companies, such as Big Sur Construction or Shasta III, by two companies for unpaid bills. One was Epic Concrete for $648,000, which has subsequently been paid.

The other, by Contract Services Corporation of America, a family-owned, steel-fabricating company in Raytown, was for $395,000. The steel is specifically for the roof of the Katz entrance meant to hold the rooftop pool.

The amount has still not been paid, although on Thursday, Rae Ann DeVargas, co-owner of the company, said that she was scheduled later in the day to enter into negotiations for a financial settlement with Lux to possibly resolve the matter and re-supply the steel to finish the project.

鈥淪till struggling with these people,鈥� DeVargas said Thursday. 鈥淵ou know, I鈥檝e always had their steel in my backyard. We have gone back and forth and it鈥檚 just been terrible. I gave them an ultimatum last week that they had to pay us by the end of this week and move their steel out, as soon as possible.鈥�

DeVargas said she had made an offer to relinquish the steel for less than the amount owned.

鈥淐all me tomorrow,鈥� DeVargas said. She said she鈥檇 know more by then.

Other companies in the last year have also filed liens, all of which have since been paid. They include Blue Chip Roofing & Grandview for $253,000; The Milford Supply Co, a plumbing business in Clayton, Missouri, for $165,000 on the Wonderland project and Select Powder Coating, 55 Mel Goers Drive, Union, Missouri, for $58,000 for Katz on Main.

All American Cleaning Co and All American Construction Contractor, 5612 N. Amoret Ave., still has a court filing saying it is owed $92,000 for work on Wonderland.

Jackson County court records show four additional companies with liens totaling close to $1 million.

They are L&W Supply Corp. of Kansas City for $29,851; Blue Chip Roofing & Waterproofing, in what is its second filing, for $230,803; Adam Leon of Lion鈥檚 Plumbing in Kansas City for $301,650 and 51黑料 Electric Inc., for $396,510.

Sathyan of Lux, in his email to The Star, expressed little concern over the filings.

鈥淎s for the liens,鈥� he wrote, 鈥渢hey are not a real issue. One subcontractor has chosen to pursue a leverage tactic we view as unfounded, but the overwhelming majority of contractors remain engaged and moving forward.

鈥淥ur focus is where it belongs 鈥� the work and delivering one of Kansas City鈥檚 most remarkable historic preservation success stories.鈥�

Disappoint

ed, but remaining hopeful

Burkhalter, now president of Midtown KC NOW, a neighborhood advocacy group with offices directly east across Main Street from the Katz project, said that although progress on the Katz portion of the complex has been slow, they still support the project.

鈥淲e鈥檙e all aware of the, say, challenges the developer has had 鈥� and that鈥檚 putting it nicely,鈥� Burkhalter said. 鈥淲e鈥檙e certainly glad to see the apartments have the certificate of occupancy to fill those. That鈥檚 something that鈥檚 needed in Midtown, more housing. And that鈥檚 something we were advocating for as part of the project.鈥�

She continued, 鈥淚t is disappointing that it has taken so long to see the historic portion of this project come to fruition. But I think we鈥檙e still hopeful.

鈥淭hey have mechanic鈥檚 liens and bills to pay, for sure. But, as I understand it, some of the leaders in the area have been in touch with the developers, and they鈥檙e eager to get out of the hole they鈥檝e gotten themselves into and complete the project.鈥�

Holding Katz to account

On October 24, the Kansas City streetcar is set to begin operation along the Main Street extension from Union Station to the University of Missouri-Kansas City, with a stop close to the Katz project.

Come October, riders are certain to be passing a project still under construction.

Crispin Rea, who represents the area as the councilman for 4th District At Large, was not on the council when the development was approved.

鈥淥ver the last year when some of those mechanic鈥檚 liens began to pop up, it was certainly a cause for alarm,鈥� Rea said. 鈥滻t was a red flag, or I should say, multiple red flags. Councilman (Eric) Bunch and I asked the city manager to essentially stay on it and have frequent contact with them and make sure we were not surprised by, you know, any news about the future of the project.鈥�

Rea said he has been encouraged by the developer鈥檚 response to city requests and concerns, such as finishing streetscapes in front of the complex prior to operation of the streetcar.

鈥淭here were some ditches and other areas along the street where it was their responsibility to complete the streetscape work,鈥� Rea said. 鈥淲e were concerned about that being a safety hazard, especially as you have folks walking to the streetcar soon.

鈥淪o they did complete the work. So, again, I鈥檓 encouraged that that was done.鈥�

After receiving its first temporary certificate of occupancy in January, the project has received three extensions since.

The Star sent inquiries to Rea, 4th District Councilman Bunch, City Manager Mario Vasquez and Mayor Quinton Lucas asking whether the city had, at any time, considered holding back on the project鈥檚 certificate of occupancy until significant progress had been made on the promised historic renovation.

Rea said it was not a tactic he had yet considered.

鈥淵ou can have claw-backs,鈥� he said. 鈥淥n this project, I don鈥檛 know if any of that was built in. But if there is an agreement with the city that we have expectations and it鈥檚 tied to city support, then we absolutely need to use what we can to make sure that happens, especially at such an important location and in such an important corner.鈥�

Bunch did not respond to The Star鈥檚 email.

Kansas City spokeswoman, Sherae Honeycutt, sent a statement on behalf of the city, saying that issuing temporary certificates of occupancy are predicated on safety issues and building code compliance, 鈥渆ven if certain non-life-safety elements of the project remain incomplete.鈥�

鈥淲hile the historic facade work is still pending, the temporary certificates of occupancy have been issued because the residential units meet all safety standards necessary for occupancy,鈥� she wrote.

Because the project is receiving tax incentives tied to historic preservation, those requirements must also be met.

鈥淭he City,鈥� she wrote, 鈥渃ontinues to monitor the project and hold the developer accountable for its obligations under the ordinance and related agreements.鈥�