Kansas City Council approves Cerner expansion deal

The Kansas City Council on Thursday approved city subsidies for Cerner Corp.’s proposed Three Trails expansion in south Kansas City.

The incentives passed 9-1 with Russ Johnson voting no. A rezoning required for the project was unanimously approved.

The incentives for the sprawling office campus, slated for the former Bannister Mall and Benjamin Plaza sites, had been endorsed Wednesday by the council’s Planning, Zoning & Economic Development Committee.

Cerner’s 290-acre plan, to be built over 10 years, would cost an estimated $4.45 billion, including $2.32 billion in construction costs and $2.12 billion in carrying costs. It calls for 4.7 million square feet of construction, including 3.7 million square feet of office space.

The North Kansas City-based health care information technology company has been on a rapid growth track, especially in recent years as demand for its software products has increased thanks to health care reform.

The council committee had recommended $1.745 billion in incentives for the campus, requiring the council to pass two ordinances.

One ordinance provides for $773.8 million to come from tax increment financing under a 23-year plan to capture all new property taxes and half the economic activity taxes generated by the project.

The other ordinance, recommended by the Tax Increment Financing Commission in July, provides for $317 million from a “super TIF” that captures the second half of the project’s economic activity taxes.

The ordinances allow Cerner, instead of paying those property and a portion of the economic activity taxes, to use that money to finance the project.

The Three Trails project is designed to include shops, restaurants and a hotel in addition to an office-related parking garage, a conference and training facility, and an employee health clinic.

David Frantze, a development attorney representing Cerner, said the company intends to start site preparation this year and be ready to occupy the first office building by the end of 2016. Cerner says the office campus is designed to house 16,000 workers.

This story was originally published August 14, 2014 at 5:22 PM with the headline "Kansas City Council approves Cerner expansion deal."