Burns & McDonnell proposes $130 million office project on Ward Parkway

02/25/2014 10:00 AM

02/25/2014 10:00 AM

Booming Burns & McDonnell wants to build a $130 million office addition next to its world headquarters on Ward Parkway to accommodate the 2,100 additional employees it anticipates hiring over the next decade.

The engineering firm based at 9400 Ward Parkway wants to expand on the site of the former Beth Shalom Synagogue at 9400 Wornall Road. The company, which intends to request incentives for the project, plans to tear down the synagogue building and redevelop the property with a phased, 450,000-square-foot office development and 800-space garage.

Burns & McDonnell has thrived in recent years because of its substantial involvement in the energy industry, designing projects for oil and natural gas exploration and distribution, power generation and the rebuilding of the nation’s aging electrical transmission infrastructure.

“Burns & McDonnell has made Kansas City its home since the firm was founded in 1898, and this proposed expansion will help continue this tradition for the foreseeable future,” Greg Graves, chairman and CEO, said. “The proposed headquarters expansion will allow us to add as many as 2,100 jobs in Kansas City over the next 10 years, maybe even faster.”

Joel Jacobsen, director of architecture at Burns & McDonnell, said the contemporary design of the proposed project would complement the company’s current headquarters, a polished granite-clad campus originally built in 1986 by Ewing Kauffman for what was then Marion Laboratories.

The site is prominently located at the terminus of Ward Parkway, one of Kansas City’s grandest thoroughfares, where it joins Wornall Road. Burns & McDonnell would design and build the new space if the project moves forward.

“Our plan is to complete the Ward Parkway corridor and cap it off with a gem at the end,” Jacobsen said.

The Beth Shalom building, which opened in 1970, is in poor condition. The congregation relocated in 2011 to 143rd Street and Lamar Avenue in Overland Park.

Burns & McDonnell has been riding a strong demand for its services in energy-related fields. The firm announced this month it planned to add 600 jobs this year alone, about half of them locally. The employee-owned business currently employs 4,300 people overall, 2,600 of them locally.

“We’ve looked ahead at the 2015-2020 horizon, and it’s amazing,” Graves said. “It looks even brighter.”

The firm reported $2.3 billion in sales in 2013, up 15 percent from 2012, and is projecting another 15 percent increase this year. It was ranked as the 20th-largest engineering firm in the United States last year by Engineering News-Record, a trade publication.

Burns & McDonnell plans to jointly develop the office project with VanTrust Real Estate, the current owner of the 17-acre former synagogue property. The business terms are still being discussed, but Graves said Burns & McDonnell planned to make a lease commitment of at least 15 years.

Kansas City Mayor Sly James described Burns & McDonnell as the “quintessential hometown entrepreneurial success story and a tremendous corporate citizen.”

“We welcome their expansion and the new jobs it will bring,” the mayor said in a statement.

City cooperation will be essential if the project is to move forward.

Burns & McDonnell will be seeking public incentives for the proposed development. Although no final determination has been made, potential incentive tools could include state job-training tax credits, tax-increment financing and/or tax abatement. Three years ago, the state provided $12 million in tax credits when the engineering firm announced it was hiring 500 employees.

Graves described the Beth Shalom property as having challenges that add substantial costs to its redevelopment. The temple building has significant environmental issues, notably asbestos and lead paint, that will make its demolition expensive. And the low-lying property has major drainage problems.

“Unfortunately, the site has some major obstacles,” he said. “One is the existing structure. Our analysis indicates fairly expensive remediation costs. ... There’s also a massive problem with water coming into the site. It’s a seven-figure problem.”

The firm has hired development lawyer David Frantze to represent it.

“They are trying to make this a viable deal, not a sweetheart deal or anything like that,” Frantze said. “We will have to work through the process with the Kansas City Economic Development Corporation for a financial analysis to determine what incentives are needed. I think it would be eligible for a wide range of incentives.”

The initial phase of the Burns & McDonnell project anticipates a 300,000-square-foot L-shaped building and parking garage. The second phase calls for a 150,000-square-foot building. Both would be four stories tall.

Surface parking for up to 600 cars also is envisioned. The estimated project cost is $130 million for the complete expansion.

The proposal to move ahead with a new expansion comes only three years after Burns & McDonnell fully occupied its two-building headquarters campus on Ward Parkway, which has a total of 485,000 square feet. The firm occupied the first building in 1996 and moved into the second in 2011 after J.P. Morgan Retirement Services relocated to Overland Park.

As part of its expansion into the entire former Kauffman campus, Burns & McDonnell spent $25 million renovating both buildings and adding a 9,000-square-foot auditorium.

The company also occupies another building nearby at 9201 State Line Road and has a short-term lease for three floors in a building at 10450 Holmes Road.

Graves said the company had been approached by brokers on both sides of the state border and throughout the city about accommodating its future growth needs, but the proximity of the Beth Shalom site to its headquarters proved irresistible.

“We love it being in Mr. K’s headquarters,” he said, referring to Ewing Kauffman, “and the opportunity to do something next to it couldn’t be ignored.”

Dave Harrison, president of VanTrust Real Estate, said his firm was looking forward to working with Burns & McDonnell on the proposed development.

“This expansion is an ideal use for the property and would serve as a terrific gateway to the Ward Parkway office corridor,” he said in a statement.

Kansas City Councilman Scott Taylor, whose district includes the site, also praised the plan.

“This announcement adds to the positive momentum we have seen with new job announcements and significant capital investments in south Kansas City in the last couple of years,” he said.

Since becoming chief executive at Burns & McDonnell in 2004, Graves has not only helped lead the firm to greater prosperity but also become a significant civic leader in Kansas City.

He was chairman of the Greater Kansas City Chamber of Commerce in 2010 and also serves on the boards Greater Kansas City Civic Council, United Missouri Bank, University of Kansas Hospital, University of Missouri-Kansas City, Union Station and Starlight Theatre.

Just last week, Graves and his wife, Deanna, contributed $1 million to KU Hospital for a proposed $250 million expansion project called Cambridge North. The Burns & McDonnell Foundation contributed $2.5 million to the 92-bed hospital tower proposed for 39th Street and State Line Road.

“Burns & McDonnell is one of the most well-known and respected engineering and architectural consulting firms in the United States,” Roshann Parris, chairwoman of the Greater Kansas City Chamber of Commerce, said in a statement. “This is outstanding news for the entire greater Kansas City business community. We can’t wait to see what’s next for Burns & McDonnell.”

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