Ray Washburne had just finished speaking at an Urban Land Institute conference, sharing the success story his family investment group achieved after buying and reinventing Highland Park Village more than a decade ago.
That's when Washburne, president of HP Village Management LLC, was approached by a representative of Nuveen about an opportunity to do it again — with a historic property in Kansas City that was roughly four times as large. Nuveen was the lender for Highland Park Village in Dallas as well as Kansas City's Country Club Plaza.
"They saw what we did on (Highland Park Village) and how we took a tired property, a great property, but that needed a new vision, needed capital spent and needed new merchandise," Washburne said. "The Plaza has much the same architecture and kind of feel, the same era and everything else. … Both of these are internal centers next to nice neighborhoods. They’re very much alike."
HP Village Management LLC
That was in August, at which point Nuveen was working with The Macerich Co. and Taubman Centers to resolve $295.2 million in defaulted acquisition debt. Now, almost a year later, a new ownership group led by Washburne plans to invest more than $100 million into a multipronged, multiyear revitalization of the Plaza.
Washburne spoke with the Kansas City Business Journal soon before an HP Village Management affiliate bought the Plaza from its previous joint venture ownership. The Texas businessman laid out his group’s priorities for the cherished retail center, now in its 101st year, and where its members are about to get down to brass tacks on specific plans now that their purchase has become official.
HP Village Management LLC
Details of the deal
Terms of the Plaza transaction, including a sale price, are not yet public. Nuveen will remain as the Plaza’s lender "under terms which create strong alignment with ownership," according to a Monday release from the buyers.
Whereas Macerich and Taubman were based out of state, the new ownership includes not just the members of HP Village Management — Washburne; his wife, Heather; and Stephen and Elisa Summers — but also multiple families prominent in Kansas City.
Among these investors, Washburne said, is the Lamar Hunt family, including Kansas City Chiefs Chairman and CEO Clark Hunt. Heather Washburne and Elisa Summers are related as great-granddaughters of East Texas oil magnate H. L. Hunt. KCBJ first reported the Plaza buyers’ discussions with Lamar Hunt family representatives in March. A representative for Clark Hunt said Friday that the family had no comment at this time.
"Since J.C. Nichols sold (the Plaza) to Highwoods, and then the owner we’re buying it from, there hasn’t been kind of a local presence," Washburne said. “We think it’s important to have local families involved and engaged."
Adam Vogler I KCBJ
Vanquishing vacancies
The Plaza initially was scheduled to sell to Highland Park Village’s owners in December, but that window was extended multiple times through June 28. Washburne said that the closing was affected, in part, by multiple vacancies that arose during his group’s due diligence period.
That list includes Forever 21, Soft Surroundings, Hallmark Gold Crown, Kindred, Express Inc. and Chuy’s. The businesses joined dozens of other vacancies that have persisted around the 15-block retail center before it changed hands.
Washburne said his partnership will chase new food and beverage tenants, with a concerted focus on high-quality local restaurant operators, rather than national chains. Recruiting other best-in-class local tenants to the Plaza also will be a priority, in addition to new luxury brands like those at Highland Park Village, he said.
The Dallas center is home to a range of luxury retailers, including Chanel, Harry Winston, Ralph Lauren and Valentino. Without naming names, Washburne said his group already has had high-level discussions with and heard interest in the Plaza from prospects of comparable repute. Stephen Summers will lead the owners' leasing efforts.
"We’ll get a plan put together … and then they’re ready to dig in," he said. "Kansas City is the largest metro market in the country without a big line of luxury tenants, and so we feel like there’s a high degree of interest. And the only place they’ll come, if they come to Kansas City, is the Plaza. They’re not looking to go to the mall or other places. If they’re going to come, they’re going to come with us."
Adam Vogler I KCBJ
Policing the Plaza
The Kansas City Police Department was among numerous parties the Plaza buyers met with leading up to their acquisition. With the deal done, Washburne said his group intends to move quickly in addressing what he described as huge security issues.
Recurring criminal activity around the Plaza, including thefts and violence, have affected different retailers in recent years, while leaving other companies with area offices to explore moving elsewhere.
"We’re going to spend probably the first few months of owning (the Plaza) really upping the security throughout the center," Washburne said. "We can address it and take care of it. You’ve got to not only focus on it, you’ve got to have a plan for it."
What are the biggest differences Plaza visitors will start to see in terms of public safety under the new ownership?
"You’ll see security on the sidewalks. You will have cameras. We’ll have cameras all over the property, watching what’s going on," he said. "Those would be the two biggest things (visitors) see immediately.”
Officials like Mayor Quinton Lucas recently have said the city could help fund new Plaza security, perhaps through mechanisms such as a community improvement district. Washburne said more specifics around a potential city partnership could be determined after his group’s purchase.
Adam Vogler I KCBJ
(Re)development opportunities
What will the Plaza buyers' $100 million-plus in investment be targeted to address around the Plaza?
"It’s a lot of things you don’t see: new roofs, new sewer lines, a lot of the facades need to be fixed up," Washburne said. "If you walk around, a lot of the storefronts have peeling paint or are rusted. There’s just a lot of TLC that needs to happen."
Improvements to aged infrastructure, lighting, roadways and garages also are in the cards, as is closer evaluation of potential development sites. Buyer representatives recently conveyed to the nonprofit Plaza District Council that an early focus, on the center's west side, will be securing a new project for the 3-acre dirt lot where plans for a Nordstrom store collapsed more than two years ago.
Other possible project sites include the Plaza Tennis Center courts, owned by Kansas City Parks & Recreation, and the block northwest of Nichols Road and Central Street that includes Starbucks’ former location.
What types of development will the new owners pursue, and with what incentives? Washburne said his group will work with the city, neighborhood organizations and multiple local architecture firms on a master plan to revitalize the shopping center while honoring its architectural character.
"We’re not going in with a predetermined plan for the center," he said. "We need to get in, understand it, understand what the city wants, what the neighbors want and formulate a plan then."
Time will be of the essence in ensuring significant upgrades can be made around the Plaza before the 2026 FIFA World Cup rolls around in less than two years, Washburne said.
"There are a lot of things we can do to have it well prepared to have the influx of hundreds of thousands of people into Kansas City, but we can only do it with the cooperation of the city and the police to get things done," he said. "Everyone has been extremely cooperative, and everyone has the common goal: By the time the World Cup's here, let's have this thing polished up, new tenants open, streets repaired, all those things."
