THE HIGHLINE LOWDOWN
David Brain on Taking Chances and the Most Transformational Projects in Kansas City.
Among business leaders in KC, David Brain has been willing to take chances. The award-winning restoration of Westport Commons is a shining example. And while Brain Group is a client, they didn't pay us to feature David as our first in a series of interviews with people we believe are making transformational impact in our city.
We drank a Highline - a tasty cocktail we created 6+ years ago to celebrate our launch. Email us for the recipe.
Highline: What do you think is the most transformational project in Kansas City right now?
David Brain: The airport. Although I’m not wildly in agreement with it. I'm a preservationist, and I would have done something to rework the existing terminals. The current terminals had a lot of merit. I'm just not a tear-down and rebuild kind of guy.
Kansas City is “halfway to everywhere” so I think a transportation infrastructure project has a lot of merit and we have a lot of potential to improve utilization and visitation. I've been impressed lately by KC visitation and tourism though. Because I'm involved in the Rock Island Bridge project, I've been looking at the VisitKC visitation statistics, and am told we're higher than Nashville, we’re higher than New Orleans.
Currently we have a lot of lower-dollar weekend visitors -- people come for a ballgame. That’s good. But we don't have as many high-profile, higher-ticket, corporate events like conventions and this could potentially be improved with a better airport.
Highline: So why the Rock Island Bridge project?
David: It's unique. It's visible. It’s accessible. It's affordable. And it's variable -- you can change programming.
It has these top five things I have repeatedly found in a successful entertainment district: you need to be different enough that people want to be at your place instead of someplace else; certainly, it's got that in spades. It's highly affordable because it is essentially free and the user decides how much to spend. It’s accessible because there's already traffic and parking infrastructure, and it's what I call “visible” because it's easy to identify – there’s no other place like it. Plus, it’s outdoors, with the river, which will make it in ever-changing environment and not repetitious to visitors. It has all the key characteristics to be a success.
Sidenote: the Rock Island Bridge is also a client, and a transformational project unlike any other.
Highline: What's Kansas City getting wrong right now in real estate?
David: My quick answer usually is always: we're not being innovative enough.
The problem with Kansas City is innovation, and real estate innovation requires very heavy equity capital requirements because the debt markets like to do what everybody else has done and has already proven to be productive, marketable, saleable, and realizable, even in a downturn. Kansas City doesn’t have a very deep or risk-on equity investment market/culture.
If I look at what we originally wanted to do at Westport High School as an example, it was too innovative. We wanted to mix workspace and living spaces -- we wanted to create community living centers with shared living space and kitchens with private bedrooms and bathrooms and so forth. But with something new, you have to have a crazy loan-to-value model, so unless we were willing to put 45% equity in, you can't do something groundbreaking, that innovative. Instead, we end up repeating ourselves to the point that it's sad. It's not progressive, and we're not known for being as an attractive a city because we don’t have anything new or different to offer.
Highline: So we wrote an email three or four years ago, and the question was, in development, are you a thermostat? Or are you a thermometer?
David:: I like to think I'm a thermostat. I like to make something happen. The things that invigorate me are where people try to do something -- when they have the strength of conviction and they try.
I was just telling a guy the story about Dave Johnson and Chicken n Pickle. Dave came to me years ago and wanted to buy a Top Golf franchise and I told him they don’t do franchises. He kept after me – over and over again – and I kept telling him the same thing – they won’t do it. Eventually he came back to me and said “I’ve got something better…”. Look at where Chicken n Pickle is now.
Highline: How long do you think this current economic situation lasts?
David: I think it lasts through a year from now, and I think it's going to get worse through the end of the year. Financing is heading for the hills. And then everybody's sitting there saying “we're gonna wait, we're gonna wait.” People are going sit on cash. There’s still a lot of liquidity in the system that people are holding off using. So it's going be tough for a while.
While we may have ended on a low note, we can all agree on one thing: discussions about today's economy are best done over a strong cocktail.
Brett: You began your career in the Peace Corps after deciding that investment banking wasn’t for you. How did the Peace Corps change you?