| Greater Kansas City’s growth barometer is generally rising, but sometimes the temporary slowdowns—or even serious dips—make measuring the overall climate difficult. The current housing slump is a good example. Most of the region’s counties are showing a drop in housing permits that is several percentage points below recent years, and as much as 10–15 percent below peaks of four or five years ago. Nor is this reduction limited to just residential construction. Because the area’s housing growth impacts so many other industries, the ramifications go beyond that one market. For example, several area retail projects have been redesigned in recent months, with more realistic or revised market projections sometimes playing a factor. This is not to say the area is struggling. If it weren’t for some recent peaks that make for tough comparisons, today’s overall growth in Greater Kansas City would be solid, and in some areas, outstanding. Nor is this limited to one area. Although dramatic growth in downtown Kansas City and Johnson County, Kansas, continue to accelerate, bright spots are also evident nearly throughout the region. From St. Joseph to Harrisonville, Topeka to Sedalia, the region has a lot to cheer. The Unexpected There are some unforeseen trends at work, and one of the most significant may involve industries that are becoming some of the area’s leaders. Manufacturing has continued a long-term decline, while life sciences and other high tech fields are taking on more importance. The region’s long-heralded advantage in distribution finally seems to be gaining national attention. Retail has gained in importance following both local and national trends. Johnson County, Kansas, is a good place to start. Al-though its long-term status as residential and retail leader remains strong, other industries are rapidly becoming important. One of the strongest involves transportation. Like much of this region, Johnson County is seeing growing interest in distribution centers and commercial facilities that build on the region’s central location. The K-10 “Smart Corridor,” for example, is beginning to see growth in larger commercial facilities that are expected to be the first of several such developments. The trend takes on more consequence when coupled with the nearby, 9,000-acre Sunflower Ammunition plant being redeveloped near De Soto. To the south a massive intermodal center is being developed by Texas-based BNSF near Gardner. Comprised of 1,300 acres, the Gardner center is expected to create a need for additional distribution and warehouse centers in the area. As with other intermodal projects planned in Greater Kansas City, the BNSF project is driven to a large degree by long-range trade projections, especially with China. Because of fuel and other cost factors, it makes more sense to use rail for shipping long distances then distribute locally or regionally by truck. The Gardner intermodal operation plans on 300 acres for unloading material from trains onto trucks. The remainder of the property is slated to include some 12 million square feet of warehouses and distribution buildings. Other areas aren’t missing out, however. The best known is Richards-Gebaur, the former Air Force Base where the Kansas City Port Authority, Kansas City Southern Railroad and developer Centerpoint of Chicago are among those working to create another intermodal center. Located on 1,400 acres in southern Jackson County, the project has had a long and somewhat meandering history, but took a major step in 2007 when Centerpoint took ownership from the Port Authority. Kansas City Southern, which owns rail lines leading to deepwater ports in Mexico, has been developing a nearby rail transfer center in the area since 2000. Adding to the depth of this saga—quite literally—Hunt Midwest Enterprises plans to develop underground business at Richards-Gebaur. Hunt Midwest already owns SubTropolis, the largest underground commercial park in the world. The potential at Richards-Gebaur includes some 18 million square feet of space that could provide secure, climate-controlled storage of distribution goods. Several factors may enhance Greater Kansas City’s status in this field. Increasing use of “just in time” delivery and other trends mean that centrally located distribution centers are crucial. Other factors include changes to trucking regulations also enhance the value of central locations. Examples of that are already evident here. In Clay County, the Northland Business Park developed slowly for more than 15 years, but has recently added several large distribution centers, including a $50 million, 236,000-square-foot FedEx regional center. The most recent is even larger space-wise. Musicians Friend, which sells instruments and music-related products through its catalog and Web site, recently opened a 702,000-square-foot center not far from the FedEx location. The $45 million project is expected to employ 500 people when fully operational, while the FedEx location was already at 1,000 and could double that within five years when it is enlarged to 600,000 square feet. Nor are these operations limited to Kansas City proper. One of the most recent announcements came from Topeka, where a 427,000 square foot distribution center was unveiled. Planned by the Del Monte Corporation, the project will be adjacent to the company’s existing pet food plant, a 400,000 square-foot-facility that is one of several distribution-related operations in this city. Besides the immediate benefit of investment and longer-term return of tax revenue, employment from these projects is significant. The BNSF facility could bring 13,000 to the Gardner area when it and surrounding facilities are complete. Air Power Several loftier projects continue this trend. Air cargo and other flight-related developments are increasingly significant here. The largest and most far reaching involves Kansas City International Airport. That story actually involves the relatively slow pace of development around KCI since its opening 30 years ago. Out of nearly 11,000 acres of airport property, barely 3,000 is developed. Surrounding property has steadily grown, but not as dramatically as in some other cities. The most significant projects there in recent years are related more to retail action to the south, including Zona Rosa. Over the past several years, however, the city of Kansas City began an aggressive campaign to address these shortcomings. In 2005, an economic development study for the area resulted in a plan to develop an “aerotropolis,” an air-traffic-driven city within a city. More recently, Kansas City contracted with Dallas-based Trammell Crow Co. to serve as master developer for a 640-acre area near Tiffany Springs Parkway. The goal is to create a high-tech, air-cargo facility that would in many ways do for air travel what the newer truck/rail hubs would provide for ground transport. Although the efforts so far do not equal those of a Dallas or Denver, in most ways they are a 100 percent departure from previous efforts here. KCI is not the only air-related development in Greater Kansas City. The city is also devoting considerable attention to the Charles B. Wheeler Down-town Airport, which quietly has become a major regional executive air center. Kansas City recently revamped the facility’s runways as part of a $10 million remodeling. The next step may be even more significant, however. A $20 million project is ready to begin creation of more advanced hangar facilities on the airport’s west side—basically an effort to provide the kind of first-class parking that the airport’s clientele expects. Another component calls for a destination restaurant and other amenities. With the stunning view of the downtown skyline, the potential is significant. Other active air projects included Clay County’s airport, recently renamed as Midwest National Air Center. Following nearly $7.5 million in improvements, the jet-ready facility is near the Heartland Industrial Park in Liberty and is served by a four-lane highway. Sciences of Life Life sciences have been heralded on both sides of the state line as a major industry for the future, but it is already a significant economic factor today. One of the area’s largest employers, Cerner Corporation, is involved in life sciences with its medical software sold worldwide. Cerner’s 5,000-plus employees and entrepreneurial history illustrate some of health science’s diverse potential. More traditional life sciences have faced some controversy on both sides of the state line. Efforts related to stem cell research continue to progress, but it is unclear how much concerns over human embryonic research have slowed progress in this sea. The biggest challenges may be more fundamental, however: creating a better entrepreneurial market financially and in terms of the region’s “intellectual atmosphere.” There are also several recent successes. Thermo Fisher, a medical instrument company with facilities in Lenexa, has announced a major expansion. The addition will add up to 180 new high-tech jobs and is connected to a $1.25 million incentive from the Kansas Bioscience Authority. Last year, European-based life sciences company, Onclmmune Ltd., announced plans for a new North American headquarters and commercial lab, also in Lenexa. This $30 million operation will work with several divisions of Kansas University and the KU Medical Center, underscoring the education base that exists here for life sciences. Although life sciences have been touted for some time—and are clearly making headway in some quarters—the more pedestrian animal health sciences continue to quietly build momentum. Many consider Greater Kansas City to be the global hub of animal health and research. Some 120 animal health companies operate in the region, accounting for about one-third of the $14 billion animal health industry worldwide. Recent figures from the Greater Kansas City Chamber of Commerce indicate as many as 13,000 area residents are regionally employed in this field. A recently formed Animal Health Corridor initiative seeks to expand that by connecting research centers in Columbia, Missouri, and Manhattan, Kansas. These universities are among the five leading veterinary schools within 300 miles of Kansas City. St. Joseph is also a strong player in this arena, with nearly two-dozen firms operating in the animal health industry. This includes major corporations involved in making vaccines, research tools and other high-tech products, as well as pet foods for sale to consumers. The businesses are creating additional impact as well. With the help of a $2.5 million federal grant, Missouri Western University in St. Joseph is constructing a two-story, 25,000-square-foot building to provide laboratory and office space for technology companies on the west side of the university’s campus. Officials believe that more than a dozen startup companies could utilize the facility. St. Joseph is also working to build other supports to grow this industry. The university, chamber of commerce, Heartland Regional Medical Center and other organizations formed the Institute for Industrial and Applied Life Sciences. One of its goals is creation of a research laboratory. Retail Reality In looking at industries, retail has traditionally been downplayed in terms of economic development. But for many reasons, this commercial component today is effectively eyed as a primary development tool. Although retail-related jobs do not bring the income found in some areas, they often produce a lot of employment, as well as sales tax and other revenues. Retail is also seen increasingly as a quality of life issue. With the rise of lifestyle centers such as Zona Rosa, multi-use hubs serve as modern town centers, replacing or creating an urban focus often missing in suburban communities. These centers are like the original Country Club Plaza, with retail, office, residential and entertainment so patrons can “live, work and play.” Zona Rosa clearly targeted this model, although its retail and entertainment footprint significantly outweigh the residential component. Legends at Village West leans more toward the regional destination model, with retail and entertainment predominating. Other examples are on the way, however. One of the largest involves the Corbin Park Project on 135th and Metcalf in Overland Park. This 1.1-million square foot, $225-million center is set to open in 2008 as a virtual new city, what the developers are labeling a “Main Street” center. The $400 million Prairiefire at Lionsgate targets a different section of the market but reflects a similar, comprehensive offering. Located on 60 acres at 135th and Nall, Prairiefire will include a large retail component as well as residential and office when it opens in 2008. Similar projects are at 119th and Roe, Park Place in Leawood and Cornerstone in Leawood—so many in Johnson County that some fear the market will be saturated. Other areas experiencing retail growth include Lee’s Summit. Although its population increase was tops in Missouri for several years—the area’s luck with major retail developments has been mixed. One of the most visible stumbles included the propped City Walk shopping center, an ambitious lifestyle/entertainment center that may have required more public support than local citizens were willing to provide. Another large project is still in the works, though quietly. A $225-million “Legoland” theme park would be part of a $580 million Summit Fair shopping center, two smaller retail developments and an office park. Proposed by RED Development, the plan calls for public funding of approximately $150 million through local and state tax increment ficancing. Although the term “incentive” has become touchy, these public/private collaborations often prove effective in several areas, although the assistance is usually more complex than the term incentive would indicate. In most cases, taxes are not eliminated or even reduced, but are diverted for infrastructure construction. While that makes the project possible without the developer having to pay those components, developers argue that in today’s competitive market it can be the difference between a project’s viability. The dramatically growing retail areas surrounding I-70 and Highway 291 in Independence offers two examples. Among several developments there is a Bass Pro Shop under construction southwest of I-70 and M-291 with the help of state and local tax increment financing. The $174 million Bass Pro Shop will open in 2008 with some 160,000 square feet—and up to 500,000 in spin-off development that includes The Falls. Announced only recently, The Falls will consist of 200 acres of adjoining property plus a 100-foot waterfall to provide reason for the name. Tenants at The Falls are expected to include a 40,000-square-foot furniture store and several restaurants. Along with a hotel, an 18-acre lake and extensive landscaping, the development will almost certainly become one of the area’s biggest destinations. That’s also just a single corner of what is becoming one of the region’s hottest sections. Also announced for this area are plans for the $117 million Stone Canyon community, the $330 million Eastland Center to the southeast on 40 Highway, and the $75 million Hartman Heritage Center expansion, which could include an arena. Along with direct tax diversion, the area has also been the beneficiary of key public projects. The nearby Little Blue Parkway interchange on I-70 was a key element in the sizable retail development that has grown to the north, as well as a new hospital located on nearby 39th Street and other proposals now under way. Whether they are labeled incentives or positive partnerships, the agreements have been a factor in making the I-70/Highway 291 region one of the fastest growing in Greater Kansas City. More Key Areas Another significant arena involves northern Cass County, where Belton and Raymore are among the area’s fastest growing communities. With especially affordable housing costs, this area in fact led Cass County to a recent sixth place ranking among Missouri counties in terms of population growth. Although the residential growth continues, it has in turn led to development in other fields, especially retail. Cass County is also another example of the impact of city, state or even federal infrastructure development—especially road or highway construction. Raymore, Belton and the Missouri Department of Transportation are all working on major roadway projects that will strategically redraw the area’s map. Already, the east-west Highway 58 corridor has grown into a major commercial area, with several recent big-box developments along the improved section between Belton and Raymore. More recent-ly, new development is occurring along Route Y in Belton. Renamed Markey Parkway and rebuilt as a new five-lane route connecting U.S. 71 and Missouri 58. Commercial development is under way on three of the four corners at the road’s intersection with U.S. 71. Across the highway, a medical and professional complex is near completion on the east side of U.S. 71. Markey Parkway also provides a direct route from Highway 71 to Belton’s western doorway. This also improves the entire area’s connection with southern Johnson County communities via Missouri High-way 150. Depending on the final route, it could also provide a connection for a future southern Johnson County parkway. Back in Belton and Raymore, plans are also in the works for a new interchange with U.S. 71 that could be the first section of a planned North Cass Parkway, a major thoroughfare that would provide a connection between Pleasant Hill and Johnson County. Located at approximately 185th Street, the new U.S. 71 interchange will provide immediate opportunity for a new wave of development in southern Raymore and Belton, areas that are now essentially open farmland. Belton officials are planning for mixed-use development of residential, commercial and retail. East of 71, Raymore has already received plans for a 2,000-acre project that would include homes, multi-family residential, manufacturing, retail and business parks. Work on the new interchange is expected to begin in 2008. With all of this under way, the Raymore/Belton area may be among the region’s most significant. Especially with the rapid population growth and relatively low housing costs, the potential for additional retail and commercial growth is substantial, especially with the above improvement projects. Combined with the nearby Richards-Gebaur development, this portion of Cass County may have a lot of living and working in its future. To the south, the city of Harrisonville this year will add another shopping district, Harrisonville Market Place. A $41 million development at the intersection of Highway 2 and Commercial Street will have approximately 250,000 square feet of retail space. Plans also call for a hotel. That city, increasingly part of metropolitan Kansas City, has already seen extensive retail development along Commercial Street. Housing Hotspots The area’s residential housing has definitely fallen from its torrid pace of a few years ago. According to a recent report by the Kansas City Home Builders Association, year-to-date permits were down to 4,500, from 7,900 for the same period one year earlier. Although those figures are only for the HBA’s eight-county area, similar trends were evident throughout Greater Kansas City. Yet most communities continued to experience growth and new developments continued to be proposed. In the long-term powerhouse area of Johnson County, cities such as Overland Park and Olathe continue to build steadily southward. Overland park was even considering an annexation still further south. Though controversial, a proposed east-west parkway in the area illustrated concerns for the area’s growing traffic—generated by new rooftops to hold the county’s average population increase of 10,000 a year. Johnson County is not the only growth area, however. One of the most stubborn trends is in Clay County, where annual growth of several thousand was only slightly impacted by recent housing market problems. With home costs that tend to offer more home for a given investment, Clay County development continued despite the national slowdown, especially in areas such as the Shoal Creek Valley west of Liberty, where half a dozen subdivisions were under way. Liberty could be looking at a similarly massive project, although formal plans have yet to be unveiled. Whittaker Builders Inc. of St. Peters has taken possession of 1.5 square miles of land in northern Liberty that is expected to be-come a $2 billion residential and mixed-use development, New Town at Liberty. Comprised of some 900 acres formerly owned by Hallmark Cards Inc., New Town at Liberty will feature a “traditional” residential development with pedestrian-friendly neighborhoods and more diverse housing than in recent suburbs. With its dramatic frontage on I-35 to the south, the property also offers potential for commercial development. Whittaker is building a similar project in St. Charles. Eastern Jackson County may be one of the most overlooked examples in this category. With two of Missouri’s fastest growing communities, Blue Springs and Lee’s Summit, the area may be ready to add eastern Independence. Especially near the above-mentioned I-70 and Little Blue Parkway interchange, several large developments are lining up. Although timetables remain in flux, projects such as Crenshaw Village at Harmony could add thousands of new homes to the area. Blue Springs is also seeing a booming housing growth—in fact one of the area’s largest. Chapman Farms, part of a 2,000 acre area annexed into the city only three years ago, is on its way to becoming a $1.5 billion residential, commercial and retail development. With the annexation—and sudden availability of city infrastructure—subdivisions grew rapidly in the rolling terrain. Other area develop-ments include Eagle’s Ridge, Chapman Ridge, Chapman Woods and The Village at Chapman Farms. These interconnected neighborhoods will share amenities such as a lake, walking trails, a bank and a Wal-Mart Supercenter. The Original Multi-Use Downtown Kansas City and the area’s urban core is a story in itself, but it’s also relevant to the Greater Kansas City picture. One key component for continued growth of the area is the proposed East Village project, a $250 million proposal that would include some 1,200 residential units, extensive commercial and retail development. Although its impact could be dramatic, East Village is not yet a sure thing. Along with several other issues, the quest for a new federal office building as part of the project has yet to be settled. That construction could bring a valuable, 1,600-employee addition to the area but the Village site is competing with an option in nearby Richard L. Berkley Riverfront Park. While that component is in the air, the first critical agreement was set last year for a $30 million J.E. Dunn Construction headquarters. The environment for the project is further complicated by the Paseo Bridge reconstruction, which could impact availability or at least access to areas surrounding Berkley Park, and some streets connecting to the main East Village area, which stretches from near city hall toward the East Loop. Although headquarters such as Dunn’s or the nearby H&R Block office are dramatic, office development overall is less-than-stellar in much of Greater Kansas City. Southern Johnson County, Kansas, generally sees the best vacancy rates, although that has softened somewhat as downtown Kansas City has seen its resurgence. Vacancy rates historically had varied all the way from the low-teens in Johnson County to the upper 20s in other parts of the metropolitan area. One recent report listed south Johnson County with a vacancy rate at 13 percent compared to 29 percent for much of Clay and Platte counties and 21 percent downtown. Health care is one commercial real estate market that is an exception to these rules. The region’s economically healthy—and frequently expanding—hospitals are part of a larger picture that also includes generally full medical offices, satellite clinics and other commercial property specializing in health care. This means that patients travel here from parts of four states and help keep demand for these services high. Again, this trend frequently seems to enhance others. In the hot area of eastern Jackson County, the new Centerpoint Medical Center is a major development likely to create additional demand. But that $250-million, 257 bed facility is not the only one in the area. Another new Independence facility was announced just recently by Children’s Mercy Hospital. That organization recently purchased nine acres near I-70 and Little Blue Parkway for a new, Children’s Mercy East. The project is expected to begin construction in 2008 and cost approximately $5 million. Forging Ahead None of these developments appear likely to face a serious problems such as the current mortgage crisis. Greater Kansas City appears to be continuing its traditional economic diversity that helps weather such single-market problems. Combined with the area’s basic economic momentum, the stage appears set for and optimistic future.
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