An amended tax increment financing agreement for the largest development project in Missouri history won unanimous and final approval Wednesday from the Kansas City Tax Increment Financing Commission.
The agreement will reimburse Cerner Property Development Inc. about $1.75 billion of the $4.45 billion in costs to build Cerner Corp.’s planned office campus at Interstate 435 and Bannister Road in south Kansas City.
The project, which includes about 4.7 million square feet of office and commercial space, is to be built in stages through 2032. It broke ground in late 2014, and construction on Cerner’s first two office towers is underway.
Public assistance on the project, known as The Trails campus, breaks down this way:
▪ Nearly $774 million to be reimbursed from TIF revenue. The TIF plan captures all new property taxes and half of the new economic activity taxes, such as sales, utilities and earnings taxes, for up to 23 years.
▪ About $317 million to be reimbursed from Super TIF revenue. The Super TIF plan captures the remaining half of the new economic activity taxes.
▪ About $654 million to be reimbursed from State Supplemental TIF revenue.
Because the Cerner project includes TIF reimbursements related to a planned hotel on the campus, the agreement also needs approval by the board of VisitKC, the convention and visitors agency for greater Kansas City.
Ronnie Burt, VisitKC executive director, said after the TIF meeting that given previous review of the plan, he expected the VisitKC board to endorse redirection of the estimated $9 million in tax revenues from the hotel that otherwise would have gone to VisitKC.
The agreement also solidifies a plan to allocate $2 million of Super TIF revenue to fund neighborhood and infrastructure improvements and $6 million to fund the Hickman Mills School District’s Education, Professional Studies and Innovation Programs.
The $6 million allocation for education funding involves $3 million for the Hickman Mills Professional Studies Program, $1.5 million to be used at district discretion, $1 million for career and college preparation uses approved by the district’s Educational Program Advisory Committee, and $500,000 for science, technology, engineering and mathematics programs approved by the programs’ advisory committee.
The $2 million allocation for neighborhood improvement will be held in a special account managed by the Economic Development Corp. of Kansas City. It is intended for use on neighborhood infrastructure, home repairs, first-time home buyer assistance and other uses advised by a seven-member Neighborhood Program Advisory Committee appointed by the Kansas City mayor according to a formula that represents the area’s homes association and community groups.
Cerner, the North Kansas City-based health care information technology company, says the development will add 16,000 new Cerner jobs within 10 years. The promise of job creation, which would add earnings taxes to the city’s tax rolls and other income to the state and county, has been the big draw to obtain public development incentives.
The project site, formerly the failed Bannister Mall, Benjamin Plaza shopping center and a few other commercial buildings, now generates about $400,000 in annual property taxes, which will continue to be paid. If the project is completed as planned, the property is expected to generate $3 million in annual property taxes.
The assessed value of the property is forecast to vault from about $3.8 million to more than $219 million if completed as planned.
In addition to about 3.67 million square feet of office space, the project calls for a day care facility, a 170-room hotel, a health clinic, a conference center, a data center, retail space, and about 15,700 parking spaces plus infrastructure and landscaping improvements.