here may be no state line more innocuous in appearance but meaningful in substance than
Retail growth will naturally follow the $414-million investment. But in this case, retail growth also helped make the deal, in the process pulling it from its original destination at a former mall site in
The project is rising in Village West, an area of
Growth has rocketed forward ever since, with the latest surge coming in January 2010 when the Unified Government, led by Mayor Joe Reardon, approved the deal, 10 months after the idea was first broached. The agreement calls for the Cerner campus to be home to at least 4,000 new Cerner jobs with an average annual salary of $54,000 by 2016.
The developer of the project is Unified Kansas Development, composed of retail real estate developer Lane4 Property Group and Wizards owner OnGoal LLC, whose principals include Cerner Vice Chairman Cliff Illig and Cerner CEO Neal Patterson. Cerner and OnGoal executives were not made available for comment.
In early April, fill dirt from the stadium site was being used to help solve slope issues on the adjacent site of the new 600,000-sq.-ft. (55,740-sq.-m.) Cerner office complex, which will be populated by staff for an entirely new line of business, and will form a triangle with Cerner sites in
That existing stream of cash put the site over the top vs. the former Bannister Mall site on the Missouri side, where a proposed $1-billion, 460-acre (186-hectare) redevelopment would have been paid for in part by $250 million in tax-increment financing and tax credits from the State of Missouri and the city of Kansas City, Mo.
"We were able to tap into that existing stream of STAR Bond revenues," confirms Tim Weaver, who was promoted to vice president at Lane4 in early 2010 in large part due to his lead role in bringing this project to fruition. "In
Weaver also leads the Missouri-side redevelopment project, called The Trails, which is still moving forward and which may attract a separate software development facility investment from Cerner.
At one time, Kansas Unified Development wanted up to $173 million in STAR bonds, a request later modified to $155 million. The Kansas Dept. of Commerce offered $147.8 million of STAR bond authority, with a limitation of $144.5 million on the state sales tax revenue portion, for the stadium project, in addition to another $85 million in other incentives for the Cerner part of the deal. At one point an OnGoal executive blogged about the need to remove the limitations on use of the sales tax revenues, so that both principal and interest payments could be covered. But that limit to the state's exposure remained.
"What the state agreed to do to that limit was to allow the existing sales tax stream, plus the incremental, enhanced portion from the new development, to go towards paying down the bonds at the date when the existing bonds are paid off, anticipated in late 2013 or early 2014," says Steve Kelly, deputy secretary for the Kansas Dept. of Commerce. "Up to this point the revenue from the district is required to pay off the existing bonds. We agreed in this document that upon the completion of the repayment, the state and local sales tax generation would apply to the new debt of $147.8 million in principal."
In other words, in a dynamic similar to tax-free-zone expansions for projects all over the globe, the project was allowed to be "tacked on" to the original district plan.
"We had looked at some of the statutory requirements related to STAR bonds for a project like the Wizards stadium, and our legal staff felt comfortable that what they were proposing to do was allowed under statute," says Kelly.
The project's scope and intensity steadily escalated from the spring through the fall of 2009, say Kelly and Kansas Secretary of Commerce Secretary William Thornton. Projected average salaries and the number of newly created jobs rose, and the commitments of IMPACT funding were enhanced accordingly.
In April 2010, a Unified Government sales tax increase measure passed by a 70-to-30 margin, a somewhat surprising result in hard times. The increase will provide $8.25 million over its 10-year life to support infrastructure and services, with $2.25 million of that going toward paying off STAR bonds, by state law.
Whose Side Are You On?
In October 2009, the project process appeared to be further complicated by the sudden departure of David Kerr from his position as
"There was not a firestorm in our agency, but a lot of interest from media and Kansas legislators, saying that this was terrible, awful, that we'd lose the project," says Kelly. "It really didn't do much to what we were doing."
"One thing that Secetary Kerr said he would do is that he wouldn't continue to work on this deal," he says. "I imagine
Kicking, Not Screaming
"When you're doing projects like this, the challenges are pretty intense," says Kelly. "No matter where you are in the process, there are people saying, 'this is crazy, you should never do this' at the same time people are saying 'this should be done at any cost.' We were trying to get the deal done but at appropriate costs. It's like walking a gauntlet, with people clubbing you from both sides. That's just the way this business is. It's a tribute to the parties involved that people were able to stick to it and keep moving the ball."
Lane4's Weaver spent a decade as event director for the University of Kansas Athletic Department, in addition to other work with athletic endeavors. So he knows a bit about the relatively undersold potential of the new development's $30-million athletic field complex. He cites a study that projects some 2.5 million people will be coming to the new development for the athletic purposes, with two-thirds of those using the fields.
"Five years ago, there was a 200-field deficit" in the area for soccer and other field sports, he says. This goes at least a way toward shrinking that deficit, while also filling the coffers of the restaurants, shops and lodging establishments nearby. Weaver sees the new project as the culmination of the original 10-year plan for Village West.
"It called for office and for major entertainment use. There is also a casino going in on the speedway property. There's a new waterpark. There are a lot of complementary uses now existing or under construction. It really does fortify what they have, and would seem to pave the way for a very solid future."
On April 12, however, after some 10 weeks of review, James Moore, minister of Canadian Heritage and Official Languages, announced that Amazon.com has been granted approval under the Investment Canada Act to establish a fulfillment center in
Until now, Amazon.ca has distributed products via a warehouse in
Asked if applications from Borders and Barnes & Noble might be looked on more favorably today, the Department of Canadian Heritage said by e-mail, "All proposals are assessed on their own merits, using the 'net benefit' factors contained in the [Investment Canada] Act. These factors include, among other things, employment, competition, technical innovation and compatibility with Canadian financial, economic and cultural policies. The Book Policy will continue to be an important consideration in the review of any investment in this sector."
he composite fiber business associated most closely with Boeing and its 787 is making noise in the automotive sector in another part of
SGL Automotive Carbon Fibers LLC, a JV established in October 2009, will make ultra-light-weight carbon fiber reinforced plastics (CFRP) for use in future vehicle concepts. The fibers manufactured at
The companies said the decision to build the carbon fiber plant in
In a curious echo of the multi-nation supply chain for the 787, the raw material needed to manufacture carbon fibers, a polyacrylonitrile (PAN) based precursor, will be produced by a joint venture between SGL Group and the Japanese company Mitsubishi Rayon in Otake, Japan. "In the next step, the facility in
"Sustainable energy was one of our site requirements," said Friedrich Eichiner, member of the board of management, finance, BMW AG. "We at the BMW Group have a clear sustainability strategy to lead the way in environmental standards. We build best-in-class eco-friendly, low-emission vehicles. And we recycle a majority of the waste materials made during production … Through energy-saving measures, this production facility in
Eichiner said the new line of vehicles is a direct strategic response to the projected increase in the number of so-called megacities around the world, and the increased attention to sustainability in those megacities.
"The City of Moses Lake will become a focal point for technological innovation," he said. "Even more, this technological innovation will have the power to transform the automobile as we know it."
ooking to make the best use of retired, semi-retired or family-oriented talent? Then it may pay to look at Maryland-based real estate consultancy RCLCO's annual list of top-selling
A majority of buyers were in the 30-39-year age group, and many were first-time homebuyers.
fter 75 years in
St. Joe will consolidate offices from
"The relocation represents a new phase for our Company where we will be able to closely align our resources in an area that we have been actively involved in developing for the past 12 years," said Britt Greene, St. Joe president and CEO. "Furthermore, we expect to capitalize on the many significant business and economic development opportunities that we see emerging as the region continues to evolve into not only one of the nation's top ranked vacation destinations, but one of the nation's newest business and technology corridors."