Cerner is expanding its data center in Lee’s Summit through a $528-million deal, purchasing a building in the Summit Technology Campus and adding computer equipment.
“They’ve been a tenant; they’re making a more permanent investment by purchasing the building,” said City Manager Steve Arbo.
The Lee’s Summit City Council last Thursday approved several ordinances to provide Cerner a tax incentive known as Chapter 100, where the city buys the property, but leases it back to Cerner, which eliminates property taxes on that company’s investment.
The purchase required adjustments to an earlier Chapter 100 plan with Cerner and the Summit Technology Campus owners.
As part of the agreement, the company will make payments to Lee’s Summit that are equivalent to 50 percent of the taxes it would have paid over a 10-year period. Through 2018, Cerner will make additional payments, in lieu of taxes, that total a little more than $1.3 million for schools, the city and other tax jurisdictions.
Also, Cerner’s rent payment to the city will cover the purchase of the building and improvements to it, plus interest, with the stipulation that after 10 years it become property of Cerner. The company plans to spend about $106 million on buying and improving the north building on Summit Technology Campus and $422 million on computer equipment.
Councilman Derek Holland noted the city is excited about the huge investment, but asked how many jobs it would bring.
Scott Siemers, a vice president with the North Kansas City-based health care information technology company, told the council there wouldn’t be that many new jobs, because data centers are capital intensive with banks of servers and computers, but need relatively few technicians.