Deals Kept The Metro Rolling On Record Pace
The Kansas City region’s economy received several healthy injections over the last 12 months, thanks to dozens of major business deals and construction starts.
The most recent and potentially most important is still being scrutinized. Sprint’s $35-billion deal with Nextel will probably stabilize the Overland Park-based firm, although initial results include at least two negatives: a workforce that at one time numbered more than 20,000 will no doubt see further cuts, and the combined Sprint Nextel will be headquartered in Reston, Va. Sprint’s Overland Park campus will become operational headquarters for the new company.
Long-term benefits for the remaining Sprint Nextel workforce should include stability in a very competitive market. The two companies have a combined value of approximately $70 billion and serve some 40 million subscribers. Sprint Nextel will trail only Cingular Wireless and Verizon Wireless in the domestic market. (For Ingram’s analysis of the Sprint Nextel merger and its impact, see page 38.)
The Big Picture
Overall, the KC region’s construction and business boom may be unprecedented, but it’s not unmanageable.
While the surge of downtown projects suggests a limited timeframe and area, the story is actually spread over much of the 20-county area and has been developing for years.
“If you’re looking for a healthy market, this is it right now,” noted Greg Nook, vice president of development at J.E. Dunn Construction. “You’re seeing nice, steady growth that is much better than a growth explosion. It’s manageable, and you can work toward successful outcomes.”
Nook and others at Dunn should have a good idea. The company is involved in several of the largest core projects: They’re general contractor for the IRS Service center and H&R Block headquarters projects; they are construction manager for the Federal Reserve Bank headquarters and are involved in the Kansas City Live entertainment district. They are also general contractor for the President Hotel restoration and will be building the Performing Arts Center, although groundbreaking on that has been delayed until summer.
Several of these projects represent the largest and most significant work begun in the entire Kansas City area this year. Clustered around the equally significant entertainment district, they form an interlinked network of projects that are greater than the individual parts: the $138-million Block Center; the $250-mil. arena; and the $140-million H. Roe Bartle Hall expansion and renovation.
Even those who don’t venture inside Bartle will see change. A gleaming, glass entryway will line up with 14th Street, which will lead from Bartle to the arena, passing through the heart of the Kansas City Live entertainment area.
Along with Block, the district began demolition of existing structures this fall. The developer, Cordish Company of Baltimore, has already accelerated its timetable and added a 200-unit condominium tower to the project’s first phase.
Serious Business
To the south, the twin figures of government finance were under way: the IRS Service Center at the old downtown post office and the new Federal Reserve Regional Headquarters.
Union HillWorking with DST Realty, the $381-million IRS plan will create a 1.14 million-square-foot office complex, parking garages and additional supports. The complex will consolidate more than 4,000 IRS employees in this area.
Although design decisions were still an issue, the nearly $200 million, 600,000-square-foot Federal Reserve Bank at 29th and Main is also making progress. This 12-story structure is expected to be complete in 2007 and will house more than 1,100 workers.
While these projects are focused on workspace, in the autumn of 2004 developer Bob Frye unveiled a $50-million plan to expand the nearby Union Hill development with additional apartments, condominiums and retail space. Located near 29th Street and Gillham Road, the commercial plans call for upscale restaurants, a health club and other amenities.
Just west of the Country Club Plaza, major growth in that area involves the Plaza West project on 48th Street. The 40-acre site will include 205,000 square feet of office space, of which Bernstein-Rein will occupy about 120,000 square feet; a 103-room hotel and some 25,000 square feet of retail space. Boston architect Moshe Safdie has been selected by Bob Bernstein to design an $80-million project.
Surges in the Suburbs
Bass Pro Shop 
Northgate Village
The Legends at Village WestOn the eastern side of the metropolitan area, two projects will bring high impact. Bass Pro Shops is constructing a $70-million project at Highway 291 and I-70 that will include lakes and a hotel. The Blue Ridge Mall is undergoing an $89.5-million redevelopment that will replace the area’s oldest enclosed mall with new retail anchored by a Wal-Mart store.
In sight of the downtown skyline, North Kansas City’s Northgate Village is being developed by Hunt Midwest. The 54-acre mixed-use community includes some of the purest forms of “new urbanism” in the region: Not only are the single-family homes and apartments built with an emphasis on pedestrian access, they fit well with existing homes in the community.
Nearby, Cerner Corporation continues to expand on several fronts, including a $191-million extension to its headquarters. This growing medical software company has also leased the long-empty former headquarters of Farmland Industries where they plan to add 400 employees.
The CB Richard Ellis real estate company is leading the charge to renovate the Liberty Triangle, an 88-acre area bounded by I-35, Highway 152 and Highway 291. Following the opening of a Lowe’s Home Improvement late last year, the next construction will involve approximately 19,000 square feet of upscale retail along Highway 152. An even larger retail center is planned for the northern tip of the triangle, an area with maximum visibility to nearby I-35.
One of the most significant growth areas in the region continued its progress with The Legends at Village West, the retail and entertainment center near Kansas Speedway in Wyandotte County. RED Development is building this outdoor shopping center and entertainment destination slated to be between 600,000 to 1 million square feet. The Legends will offer specialty retailers, branded retail, entertainment and dining venues in a spacious, pedestrian-friendly atmosphere. The center is projected to open later this year.
The city of Riverside in Platte County is undergoing a major ex-pansion. A $70-million levee along the Missouri River has allowed reclamation of more than a thousand acres, 600 owned by the city. Named “Riverside Horizons,” this site is only five minutes from the downtown airport and less than ten minutes from KCI. A new interchange on nearby I-635 and major road network within the project will be among of the first improvements. Work is scheduled to begin this spring when the levee is formally completed.
Entrepreneurial Johnson County
Major projects are almost commonplace in Johnson County, but one deserves special attention. In late November, Garmin International completed construction of a $65-million expansion at its Olathe headquarters that includes a new warehouse, parking garage and 450,000-square-foot office building. The manufacturer of digital/satellite location devices (GPS) was hardly more than a garage business 10 years ago.
Regional Progress
In St. Joseph, things are changing-and staying the same. Triumph Foods is investing $150 million in a new pork processing plant scheduled to begin operating in September.
The company expects to employ about 1,000 people within the first year of opening, and plans for a second shift could boost that to 1,800. In a single stroke, the project brought success to the city’s efforts to rebuild this former stockyards area, once the center of the city’s bustling meat packing industry.
Several area highway projects also deserve attention. One of the most obvious is the Grandview Triangle, which is eliminating rush hour grid- lock and opening nearby areas for development. Less visible, are projects such as the Highway 59 widening from Ottawa to Lawrence, and the widening of I-70 between Lawrence and Topeka.
Grandview TridangleSeveral cities are involved in major roadwork. Lenexa joined with Kansas to begin reconstruction of the 87th Street and I-35/US-69 interchange. This $50-million project is expected to be completed during the fall of 2006.
Liberty is commencing its South Liberty Parkway, a new four-mile route that will connect I-35 and Missouri Highway 291, opening the southern part of Liberty to new development.
A similar, even larger effort involves the Blue River Parkway in Independence. The first link of this eventual route to the Missouri River already opened up extensive commercial development just north of I-70.
A project that will initially cause complaints is likely to be the Paseo Bridge rehabilitation, scheduled to start this spring. The major effort will hopefully extend the bridge’s use by 15 years, which would give the Missouri Department of Transportation time to look at long-term solutions, such as building two new bridges or one eight-lane bridge. On average, approximately 100,000 cars cross the Paseo Bridge daily.
Like highway work, area hospital projects are producing a similar impact. It is easier to list local hospitals that are not expanding than those that are. Among the most significant are HCA’s proposed new location in Independence and North Kansas City’s $135-million addition.
Honorable Mention
Zona RosaSeveral projects deserve attention although they don’t fit the above categories.
Cass County’s first major retail area, Belton Towne Center, continues plans for expansion. The $35-million center will construct a second tier of retail shops.
In Olathe and Overland Park, the battle of “dueling arenas” tipped toward Overland Park as that city nailed down both tenants and strategic state financing. Earlier in 2004, the Stowers Institute for Medical Research announced plans to build a second campus in Kansas City, although its location and timing were not specified.
General Motors announced plans to invest $203 million in the Fairfax plant to begin making a Saturn sedan. The company also announced that in 2007 it would build a hybrid version of the Malibu at the same plant. Benefiting from earlier investments of nearly $500 million, the world’s first SUV hybrid, Ford Motor Company’s Escape, began rolling from the Ford Claycomo plant.
The $185-million KCI airport renovation brought economic impact along with more efficient travel. Also in Platte County, the $200-million Zona Rosa lifestyle center opened in 2004. Slated for more development, the center’s impact has only just begun.