Banking on KC – Ian Ross of SomeraRoad: Revitalizing Kansas City's West Bottoms
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Kelly Scanlon:
Welcome to Banking on KC. I'm your host, Kelly Scanlon. Thank you for joining us. With us on this episode is Ian Ross, the founder of SomeraRoad, a real estate investment and development firm headquartered in New York and Nashville that's working on a development project in Kansas City's West Bottoms. Welcome, Ian.
Ian Ross:
Hey, Kelly. How are you? Thanks for having me.
Kelly Scanlon:
Absolutely. Some pretty exciting stuff going on down there in the West Bottoms, and as I mentioned, SomeraRoad is really involved in that. It's a major five-phase development project. My biggest question is, what attracted you to this area, and what's your vision for transforming the West Bottoms into an even more vibrant, live, work-play community?
Ian Ross:
Our team is all across the country, and we're based in Nashville and New York City with our offices, in Kansas City, Austin, Pittsburgh, Indianapolis and Tampa, and we have a small team, as I said there in Kansas City, actually in the West Bottoms. We focus on high-growth secondary markets like Austin and Nashville, and I'm going to put Kansas City in that breath as well. Markets that we think have heavy tailwinds are going to see outsized GDP growth and population growth, and are really the next great American cities, and we work in that kind of markets across the country. Our first project as a firm eight years ago was actually in Kansas City, and we've been investing across the market since inception of SomeraRoad. Our first deal was in our beloved river market at 300 Wyandotte, now known as the 3Y Building, which is a building that we bought entirely vacant, re-conceptualized, re-amenitized and just re-imagined, and now it's a hundred percent leased and a phenomenally performing asset.
We've done projects across the city since then, from downtown to out south, and now our big project here in the West Bottoms. With regards to what drew us to the West Bottoms, I think first and foremost, the West Bottoms represents the zeitgeist of American commercial real estate neighborhood development. What do I mean by that? Well, it's got authenticity, it's got architecture, it's got history. It's got these amazing bones and meaning and soulfulness, and I think that's what a lot of people are seeking in today's commercial real estate paradigm. We want a place that has a heart that says something that has a deeper meaning, that's not just plain vanilla glass towers, just a shopping center built on a field. We want something that really has a point of view and a perspective, and that's very true in the West Bottoms and across America's major cities, all of these kinds of post-industrial neighborhoods, by and large, have been developed.
When you look at the RiNo in Denver or Deep Ellum in Dallas, or the Pearl District in San Antonio, or Wedgwood Houston in Nashville, or Dumbo in Brooklyn, Nulu and Louisville, the list goes on and on of these type of adaptive reuse, historic redeveloped neighborhoods. Ponce City Market, Inman Park area in Atlanta. People love these kinds of neighborhoods. And I'd also say, Kelly, it's not something that's lost on Kansas Citians, but when you look at the River Market or the Crossroads or Westport, those are a similar ethos. And I think what we've done as a firm over the last five years of putting this development together is we worked with the city and hundreds of stakeholders to put together an incredible vision for it, and today we have the largest public private neighborhood redevelopment partnership in Missouri history, and we're going to build something really special there.
Kelly Scanlon:
And like I said, it's in multiple phases. So outline for us what those main phases are and if you would, highlight some of the key features and some of the amenities that residents and visitors will be able to look forward to.
Ian Ross:
I think of it as two phases. Initial phase is the historic center. It's taking about a half dozen historic buildings, the Moline Plow Building, the Avery Building, the Laramie Tires Building, the Firehouse, and a couple others, and effectuating an adaptive reuse, a historic redevelopment of those projects. Those will be a small note of office, really dynamic retail on the ground plane, streetscaped, landscaped, really exciting ground plane experience with retail on the ground and office and multifamily apartments above. The second phase of the project is the new construction vertical development around that center core. I mean, I guess you could really look at it as three phases. The first phase is city's work. So the city public domain has provided $200 million of contributions to this project, anchored with its initial investment in streets, sewers, sidewalks, rail crossings, street crossings, all sorts of public infrastructure, as well as this amazing public park in the center of the project. That I guess, you could call it phase one, so the city and the state and the public sector going first.
The second phase, the historic adaptive reuse of these buildings around that center core, and the third phase, the construction of new construction apartment buildings around that historic neighborhood. The neighborhoods are just going to see this amazing collection of shops, of apartments, small office nodes, public spaces, places to gather, places to congregate, but I think Kansas City lacks, and build a really dynamic mixed use place that has all of these positive collisions and well-thought-out and well-planned experiences.
Kelly Scanlon:
Can you talk to us in more detail about that?
Ian Ross:
Absolutely. So the three things that we focus on when we build these kind of neighborhoods and we conceptualize this, and frankly we spend an inordinate amount of our time thinking about the tenant mix, the relationships between these mix and the right folks to bring, because we strongly believe that retail drives the experience, the environment, the front door, the way that people interpret districts. So the three things that I think about are, one, focusing on local first, helping local businesses thrive and shine and bring the best that Kansas City has to offer in a singular place where one plus one equals three, where these experiences have positive collisions and help support one another. The simple example of that is like you're putting a smoothie shop next to a yoga facility, or a bar next to a restaurant. You know what I mean? Having two things that really accentuate each other's experiences. So creating that dynamic collaborative retail mix, focusing on the local is first and foremost.
Then the second thing we like to do is what can we bring from out of town that isn't yet in Kansas City that Kansas City needs or wants? So we always think of after leading into the local, what new to market products, experiences, businesses that we've seen work in a really positive way in other market. What learned experiences can we take from outside of this focus market and bring into the market? And then third, we just look at amenities. When you have a neighborhood, when you have this walkable environment, what are people going to want to have around them? What do they want? What do they need? What businesses as amenities can we provide to them? And just really trying to build a uniform ethos and culture and first and foremost, just making sure that these businesses are going to be successful. We need to set them up for success, which means matching them with the right peers around them and providing them a facility where consumers are going to want to consume in their space.
Kelly Scanlon:
With the various spaces that you've mentioned, what is your anticipated date for this project being completed?
Ian Ross:
It'll take course over the next, frankly, the next 10 years. The first phase should be complete in about two, right around the World Cup, and there should be various phases of the project delivering year over year about 1500 units of multifamily apartments that we want to deliver, but there's many pieces to this puzzle. The neighborhood will continue compounding on itself, continue improving as it grows, and success and energy will breed more energy and more development.
Kelly Scanlon:
You've mentioned several times about adaptive views, so how do you plan to balance that historic preservation with some of this new vertical development that you're talking about? How will you balance that? How will you marry it?
Ian Ross:
I think it's pretty simple. We're taking historic buildings and breathing new life into them. There was one historic building that frankly was functionally obsolete and falling apart and was a nuisance and a danger to the community and society, so we took that building down in a big demolition last month. And on that site and on any other unimproved land, we'll be building new construction that's contextually appropriate design wise, aesthetic wise with the neighborhood and the district. But other than that, all the other historic buildings stay and are brought back to life in a contextual and tasteful manner.
Kelly Scanlon:
A lot of times large-scale developments like these impact the local communities and there are businesses down there. There is some activity in the West Bottoms. So how has SomeraRoad engaging with the West Bottoms community to address any concerns that they might have? And also, you mentioned working with the city and ensuring that the redevelopment benefits current residents and businesses.
Ian Ross:
First and foremost, we engaged both those folks, those groups of people day one. I mean, we wouldn't have done this project if we didn't have City Council and Mayor Lucas's support. So over four years ago, we got to know Mayor Lucas, Brian Platt and their administration, and if it wasn't for their vision for this neighborhood aligning with ours, we would not have proceeded and would not have acquired the assemblage. They shared a vision, and it was with that positive support, with that alignment that we proceeded. I think having them as our partner and a true stakeholder in this endeavor is paramount to our success. Second of all, you asked about neighborhood businesses. The first thing our team did on the ground there is really engaged the West Bottoms historic community, the community of stakeholders, of shopkeepers, of businesses there to not only include them in our vision and our project because we really want to be locally minded and authentic to what's already there in Kansas City, but to hear them out and to hear what people wanted.
All of this simply put, Kelly, and I think you'd find few people who disagree with this statement, it's all a net positive to the folks in the West Bottoms who have businesses there. It's bringing foot traffic, activity, your folks coming down there and spending money. What we're going to do is put this neighborhood on the map regionally and nationally, and I think it's going to have a tremendously positive impact on everybody. What's nice about the West Bottoms is that there's very little, if any displacement that's being effectuated here.
Kelly Scanlon:
How did you get into this business, and you started SomeraRoad, what inspired you to do that? And then just your entrepreneurial journey in general, how did it lead to the real estate industry?
Ian Ross:
I've been working in commercial real estate and real estate development for the past 16 years. It's always an asset class I really enjoyed and I'm passionate about. What I love the most about real estate as a product is its tangibility. It's a living, breathing, physical product or investment sphere that affects people's daily lives, and it provides you an agent to change and influence people's lives and influence community. In the end, when we do everything, unless the Metaverse changes this over the next couple decades, but today, when we do anything, whether it's sleeping, where we live, where we work, where we shop, where we hang out with our friends, all of those interactions, those communications, those experiences happen in a built environment. They happen in the built world.
And as real estate developers, we get to impact and effectuate that built world, and we get to have an impact on those experiences and I think add positive value to communities, to individuals and create phenomenal places for human beings to interact. When I think about our business high level, we're in the use of space business. We provide spaces and provide ways for people to use them, and it's a fascinating business to be in to get exposed to all of these different ways that human beings use space and to try and have a positive impact on their lives.
Kelly Scanlon:
SomeraRoad is well known for its strategic approach to distressed real estate, to distressed areas. And you've mentioned several cities that you've worked in where you have gone into areas similar to the West Bottoms in terms of its vibe and it's historical ambiance and so forth. So you, of course, have to choose which ones make sense. So what's your philosophy and your methodology behind identifying and then investing in those distressed areas, whether you're going to go in and invest in an area and develop it?
Ian Ross:
I think we're generally looking for projects of scale in markets that we believe in where we can have a large impact in that environment, and where we can create a dynamic district where the whole is greater than the sum of the parts. In this part of our business, we want to create these highly dynamic, mixed use, multidimensional neighborhoods, these live, work, play, stay, holistic experiences where all of the pieces drive value for all of the other pieces, where they all draft off of one another, a highly dynamic environment.
Kelly Scanlon:
Looking ahead, what are your long-term goals for SomeraRoad as a company and what other cities or projects are you excited about for the future?
Ian Ross:
Sometimes in my position, I have a hard time stopping and looking back and reflecting on where we've come from and where we're going because we're so busy with our heads down trying to put our best workout on the field every day. But when I look at how much we've grown as a firm, $13 billion in acquisitions and developments, and nearly 50 people across seven markets across the country, what I'm most proud of is the team that we've built, the phenomenal human capital here, how much we've learned and how much we've grown as a firm. And if I think about what I want for us over the next five, 10 years, I really just want to continue doing the same thing. We get to work with tremendous people. We challenge each other every day, both with our internal and external partners. We have a heck of a lot of fun doing it.
We work with great cities that are growing across the country that can benefit from our influence, and we are open and nimble and entrepreneurial to learn new things, constantly learning, constantly growing, constantly challenging ourself to be the best that we can be and put our best work out on the field. As I look across our business, whether it's our development business, our value add business, our industrial net lease platform, or our aviation infrastructure platform, there are projects across all four of those sectors that have exciting elements about them, and each one of those verticals, you have a great trajectory. I'm most excited over the next few years for us to effectuate our vision in Kansas City like we have in Nashville and Indianapolis, and Pittsburgh.
I'm excited about the work that we're doing in Austin. I'm excited about some of our new projects in Nashville. Eager to see our industrial net lease team, continue acquiring assets in that space and looking forward to our team, really carving out a special niche here in the aviation infrastructure business. And top of all that, Kelly, I'm just excited to show ourselves our nimbleness and openness to meet whatever the next great challenge that comes across our desk is. We don't have a singular thing that we do or a singular way that we approach things. We always try and grow and learn and meet new challenges as they come whenever those challenges may be.
Kelly Scanlon:
Ian thank you so much for being our guest today. I know this is a project that's been getting a lot of local attention, and to hear you come in and talk about it provides even more detail, and we really appreciate you taking the time to do that and from the investment in Kansas City itself. Thank you.
Ian Ross:
Thanks so much. Appreciate the time.
Joe Close:
This is Joe Close, President of Country Club Bank. Thank you to Ian Ross for being our guest on this episode of Banking on KC. The SomeraRoad Project in Kansas City's West Bottoms blends historic preservation with dynamic new development. This transformation promises to create vibrant public and mixed use spaces that will foster a thriving community in an area rich with history and filled with potential. At Country Club Bank, we applaud initiatives that enhance our city's landscape, prioritize local businesses and contribute to the wellbeing of our residents. Projects like these not only preserve our heritage, but also pave the way for future growth and prosperity. Thanks for tuning in this week. We're banking on you, Kansas City. Country Club Bank, member FDIC.