Kansas City’s Tax Increment Financing Commission on Wednesday approved a development agreement for Cerner Corp.’s $4.45 billion campus on the former Bannister Mall site in south Kansas City.
The office campus, the largest economic development project in Missouri, is being built in 16 phases with about $2.7 billion in private investment leveraged by public support. Cerner says the project, which broke ground in November 2014, will add up to 16,000 jobs within 10 years.
The overall development plan provides for about $1.7 billion in reimbursable project costs to Cerner, with about $774 million to be reimbursed from TIF revenue, about $317 million from super TIF revenue and about $654 million from Missouri supplemental TIF revenue.
The redevelopment agreement approved Wednesday provides only for reimbursement of the TIF and super TIF revenues, totaling about $1.1 billion.
As part of the TIF agreement, the health care information technology company has agreed to pay $2 million to a neighborhood improvement and infrastructure plan and $6 million to a Hickman Mills education, professional studies and innovation program. Details of those plans are still to come. Cerner will forgo those funds out of the $317 million TIF part of the plan.
The campus plan includes 3.7 million square feet of office space, a 300,000-square-foot conference and training center, 249,000 square feet of retail, a 240,000-square-foot data center, a 170-room hotel, a medical clinic and a day care center. The first two office towers are expected to be completed by the end of this year, with the full build-out expected after 2032.
Kansas City is moving forward with condemnation proceedings to acquire the final properties needed to complete the site for redevelopment.
In 2013, the Bannister and I-435 redevelopment property was assessed at about $3.8 million. The property now generates about $400,000 in annual real property taxes, which will continue to be paid to the taxing jurisdictions. When the office campus is completed, the same area is projected to be valued at more than $219 million and generate about $3 million in annual real property taxes.
According to the TIF documents, the Cerner campus is expected to provide an extraordinarily low 1.35 percent rate of return to the developer.
The property, bounded by 87th and 95th streets, Interstate 435 and the railway on the east, was declared blighted after demolition of the former Bannister Mall. Attorney Dave Frantze, representing the development team, told TIF commissioners that the final demolition is underway or planned for retail buildings and a motel that remained on the site.
A separate item, subject to Kansas City Council approval, includes an acquisition and title transfer agreement.