DST plans $110 million upgrade of data center

04/28/2014 5:30 PM

04/28/2014 5:30 PM

DST Systems is seeking a $110 million taxable revenue bond from the city to finance a major upgrade of a 30-year-old data center the firm operates in the Winchester business park off Interstate 435.

The bond would include $70 million for modernizing computer servers and other equipment at the facility, and $40 million to build a 25,000 square-foot addition to house new backup power generators. The company wants a five-year, 50 percent personal property tax break on the $70 million in equipment purchases.

Kansas City-based DST Systems provides data-processing services for a number of industries, mostly mutual funds, and increasingly the healthcare field.

Attorney David Frantze, who is representing the firm in its request to the city, said the major upgrade is required to meet the standards of the financial industry, particularly guaranteeing no interruption in service in case of a power outage.

“They actually have to build an addition to put the new power supplies in, they can’t pull the old equipment out because then there would be no backup,” Frantze said.

DST currently employs about 125 people at the data center that opened in 1985 at 7201 E. 64th St. The revenue bond request is being framed as a job-retention initiative. The company would buy the bond from the city.

“Without that investment, the facility would unable to be competitive and stay at that location,” said Kansas City Councilman Ed Ford.

Ford is chairman of the Council Planning, Zoning and Economic Development Committee. The DST request is expected to be reviewed by the committee Wednesday.

“I don’t think it’s a slam dunk,” Ford said. “With that amount of investment, I have to see the number of jobs that would be created or retained.”

DST Systems officials could not be reached for comment Monday.

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