Troost corridor projects have few similarities — except their bank

When John Hoffman was looking for financing for his company’s projects along Troost Avenue, he knew which bank to call.

Hoffman, a managing partner and owner of UC-B Properties, looked to Enterprise Bank & Trust to finance a microapartment concept called Scholars Row at 55th Street and Troost and the LaQuinta Del Sol hotel at 23rd and Troost that he’s developing with Sunflower Development Group.

“They understand Troost,” Hoffman said. “They understand developing in the urban core and they aren’t afraid to work in neighborhoods that are changing.”

And while much fanfare is afforded to the projects being developed around Troost, less attention is focused on the financing that makes the projects work. Enterprise Bank, which is owned by St. Louis-based Enterprise Financial Services Corp. (Nasdaq: EFSC), has financed many of those projects along and around Troost over the past several years including the UC-B projects and the Wonder Lofts at 30th Street and Troost.

Hoffman said that Enterprise has become a reliable partner in an area of town that needs investment, while other banks are hesitant to lend the money.

“We found that a lot of the bankers we had dealt with before pretty much said that their loan committee wouldn’t approve it,” he said.

In an interview with the Kansas City Business Journal, Jeff Carson, Kansas City market president for Enterprise, and Adam Kilpatrick, senior vice president and commercial real estate director for Enterprise, said that its work on and around Troost has become an important part of their strategy. The bank has financed more than $30 million in loans in the Troost corridor in the last two years.

Kilpatrick said that the bank was led there by some of its longtime clients that had showed an interest in developing areas of need within the urban core.

“A lot of those developers are actively coming up with creative ways to develop in those areas,” Kilpatrick said. “Our relationships are leading us there. We take their vision and try and get behind it.”

Enterprise has put together a commercial real estate lending team with expertise in federal New Market Tax Credits and Missouri’s Historic Tax Credits as well as local incentives that can provide additional financing on deals. Those tools allow the bank to find creative financing structures for projects that wouldn’t happen otherwise.

Kilpatrick said the team usually starts with the vision of the developer and makes sure it aligns with other stakeholders — mainly the city’s vision for the area and the neighborhoods — to make sure the project is wanted and viable.

“If it’s what the city wants, it’s what the developer wants and it’s what the neighborhood wants, then it’s going to work and we want to be a part of that,” he said.

Carson said that the choice to finance in the Troost area is about more than making a deal work or satisfying longtime clients. He said it speaks to the relationship between improving the city and success for Enterprise.

photo: ANDREW GRUMKE

“The tougher deals are the ones that are ultimately going to advance Kansas City the furthest,” Carson said. “The better off Kansas City is the better off we are as a bank. We can’t get there without Kansas City.”

But the financing also shows the bank’s greater commitment to meet the challenges of the city.

“If it’s an easy deal, every bank in town is going to line up and do it — and is that really where the city needs us? They need a bank that’s willing to get into the trenches and get stuff done.”

From The Kansas City Business Journal Dec 3, 2019
By Miranda Davis – Staff Writer, Kansas City Business Journal