Thursday, August 15, 2013

Massive Development on the Horizon in SKC

By Mary Wilson

The South Kansas City Alliance welcomed good news from David Frantze, a land development attorney representing Cerner Corporation with their recent announcement to acquire and develop on the former Bannister Mall site. Sixth District Councilman John Sharp introduced Frantze to the group.
“I admit, and we all do, that we’ve had our hearts broken before,” said Sharp. “This is the real deal.”
After the Governor showed disinterest in the land assemblage tax credit that South KC was pushing for, legislators for South Kansas City went forth looking for help. The state then was able to provide an additional $10 million in tax credits for the project. Cerner developers then approved to move forward with their plans to acquire the land.
“We’re poised to see real activity there,” said Sharp. “We’re poised to see this area come to life again. I think we all know it’s not going to only spring that little area to life, it’s going to spring all of South Kansas City to life.”
 The current owners of the property include two Cerner executives, and is not owned or controlled by Cerner Corporation. Cerner Corporation, as of right now, has entered into a contract to buy 237 acres at the former Bannister Mall site, consisting of the former mall site, the former Benjamin Plaza site, and the former Bannister Square site, all of which are currently owned by Trails Properties, who bought the site originally with the idea of a mixed-use development to include retail and a soccer stadium.
 Cerner Corporation owns five buildings at the old Marion Labs site, and needs additional room to expand.
“When Cerner acquired that property, they committed to the city to have 300 people there, and now there’s 2800 people there,” said Frantze. “Cerner is fast-growing.”
 According to Frantze, Cerner’s current buildings are at, or close to, capacity. Last year, Cerner added 2200 people to its operations in Kansas City. The contract currently in place calls for Cerner to have a six-month due diligence period on the site to perform environmental condition and title investigations, as well as time to work through the incentive process.
 The project Cerner is wanting to implement would have a total of 4.4 million square feet of buildings, 3.7 million of which is office space. Roughly 400,000 is retail space and the remainder is ancillary facilities.
“Their campus north of the river is 1.1 million square feet,” said Frantze. “This is a little over three times as big as that campus.” According to Frantze, the total cost of the project will be around $2.3 billion, and will consist of fourteen buildings/phases. The average building size will be around 370,000 square feet.
 “The one thing I can promise you is every projection will be wrong,” said Frantze, in order to distinguish that these are just estimates. “The anticipation is that these buildings will be built over ten years. That is based on putting 1200-1400 new employees on site each year.”
 The basic design of the buildings will be scalable, based on current projections of need as the project is rolled out over the ten-year period. The retail part of the development will be focused on the south end of the site, and will not be intended to be destination shopping. Current projections show a major grocery store.
 “To give you some sense, they already have been contacted by a grocery store operator since this project was announced to be in the area once this thing gets moving,” said Frantze. “We have a lot to do. The deal is, we have six months to work through everything.”
 Cerner Corporation has until December 27, 2013, to decide whether to buy or not buy the property. Of the $2.2 billion total cost, the developer will pay 70% and the remaining 30% will be split between TIF, the super TIF and the state TIF. Prior to closing, the current owners will be responsible for the demolition of unoccupied buildings on the site.
“It’s a massive project,” said Frantze. “It’s an exciting project. The state has told us this is far and away the largest development project they’ve ever worked on. It’s about four and a half times the size of the Ford Motor factory.”
Frantze anticipates, since the Cerner Board of Directors approved to move forward into this contract, final purchase approval in December. According to Sharp, contributions will be made totaling $8 million of the plan’s budget for neighborhood improvements surrounding the site. There will be a neighborhood advisory committee to make recommendations.
The next regular meeting for the South Kansas City Alliance will be on Monday, September 9 at 6 p.m., at 3 Trails Center, 5912 E Bannister Rd. in Kansas City.

 





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