One Word for Kansas City's Economy: Stability

A diversified regional economy helps this metropolitan area withstand the gyrations that have rocked many other markets.

As a measure of the economic stability in the greater Kansas City region, one need look no further than the steady stream of statistical
reports that flow from Washington. Across multiple fronts—whether in such varied measurements as employment, home values, or the health of commercial realty—the Kansas City region was spared the depths of what has become known nationally as The Great Recession.

Our jobless rate rose, but not nearly as much as we saw in most other major metropolitan areas. Our home values declined somewhat, but again, nowhere near what the glamour sites of California, Florida or other property locales once thought “too popular to fail.” Commercial realty has seen vacancy rates tick up since 2008, but it’s been a relative blip here compared with many other markets, even when you factor in the failures of several high-profile development projects.

Are you starting to sense a trend here?

In the spring of 2008, this region of Missouri and Kansas seemed poised for one of the most dramatic economic eras in its history. With the long, nagging recession behind us—by official measures, anyway—the region appears ready to resume that mantle.

Leading the way for that, once more, is the continuing development of Downtown Kansas City. But there’s so much more these days, led by some eye-popping projects on the region’s flanks. Billions of dollars in development projects have unfolded in western Wyandotte County’s Village West district, on the Kansas side.
And on the Missouri side, in eastern Jackson County, perhaps most prominently with the addition of a mid-size arena in Independence to complement the mega-venue that Downtown boasts in the Sprint Center.

Those types of projects continue to serve as magnets for lesser development, offering the promise of additional success as the long-awaited recovery flexes its muscles in this region. Much of the credit for changing Kansas City’s appeal, though, remains Downtown. There, more than $5 billion in development has been injected over the past decade, and several large-scale projects are expected to add at least $2 billion more within a few years.

That transformation has given Downtown a revitalized blend of entertainment, residential and office space and hospitality choices, reflecting the kind of diversity that underlies much of this region’s economic health, as well.

Overcoming Divisions

The most obvious feature of Greater Kansas City’s geography is the fragmentation: The Missouri–Kansas state line, and to a lesser degree the curving arc of the Missouri River. And on top of those barriers, the various counties—15 of them in the Greater Kansas City Metropolitan Statistical Area—and dozens more lines defining municipalities and school districts.

Although recent efforts have sought to minimize some aspectgs of that bistate competition, the two-state option is still an advantage because it gives businesses a choice of incentive, taxation and regulation packages, while still accessing the region’s very real advantages in the quality of its work force and location.

For decades, the most active area of the region has been Johnson County, a Kansas-side suburb and one of the most economically upscale counties in the nation. Its economic strength is evident in its seemingly endless retail and commercial development, stretching from near Downtown Kansas City south, almost to the Miami County line.

But more recently, just as Downtown Kansas City has regained its vibrancy, major developments have sprung up throughout the area. Both Wyandotte and Leavenworth counties are achieving new levels of growth in Kansas, while several Missouri communities—most notably, Independence, Lee’s Summit and Blue Springs, all in Jackson County—are realizing major expansion of their own. Perhaps more than anything, Greater Kansas City is achieving a balance that reflects both geographic and industry growth.

Solid Foundation

Much of this is not entirely new. Eastern Jackson County, which today has some of the hottest retail property in the region, saw some of the most rapid residential growth in Missouri as long ago as the 1980s. Today, that area’s retail explosion is built in part on those earlier rooftops.

Similar foundations are reaping benefits in Clay and Platte counties, St. Joseph and Buchanan County, as well as other locations in the region.

In addition to longstanding divesity with such varied sectors as trucking and pharmaceuticals, the region has put in place a thriving life-sciences sector, attracting high-quality research and laboratory jobs to weave another thread of stability into the local economic fabric.

Topping it all off, perhaps, are the dramatic changes to bolster this region’s role in on the transportation and logistics fronts. The transportation focus involves both local and international trends. Historically the nation’s second-largest rail center, Greater Kansas City is also a major over-the-road hub because of its many interstate and highway intersections located in the nation’s epicenter. If you want to reach all corners of the United States quickly, Kansas City is a formidable competitor.

The biggest change in this picture involves international shipping. Rail connections to Mexican ports from Kansas City, the existence here of the country’s largest Foreign Trade Zone and other factors have the potential, incongruously, of creating a seaport in the nation’s heartland.

Even before that, highway and air transport makes this one of the best locations to ship to outlets to more than 30 other states.

Were these the only features of Greater Kansas City, many residents might still choose to live elsewhere. But the quality of life here—from relatively low crime to great recreational opportunities—draws and keeps many residents and businesses right at home. These advantages are especially obvious in smaller communities that encircle the area. In these and dozens of other area communities, the blend of healthy economy and favorable lifestyle is difficult to beat.