Dairy Farmers of America announced plans Tuesday to build a $30 million headquarters in Kansas City, Kan., ending 16 years in Missouri and renewing cries of a border war.
The Dairy Farmers of America, formed in 1998, is the area’s largest private employer by revenue, taking in $18 billion last year. It has leased 72,000 square feet of space near Kansas City International Airport since its inception.
Kansas is providing tax incentives for the three-story, 100,000-square-foot project that will draw 325 jobs to the fast-growing Village West area of western Wyandotte County.
The move, which amounts to about 20 miles, comes after both states offered tax incentives as the nation’s largest milk marketing cooperative sought a site.
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The outcome led to some cries of foul.
“It’s unfortunate that we have gone through this wasteful and destructive bidding war that doesn’t result in any additional new jobs added to the area,” Kansas City Mayor Sly James said in a statement. “We can no longer define economic development as engaging in self-destructive bidding wars with our neighbors who, like us, could put these funds to more productive purposes.”
The two states’ border war has seen employers in recent years move in both directions across the state line aided by tax incentives.
Monica Massey, the Dairy Farmers of America’s senior vice president of corporate affairs, said the group chose to build in the Village West area after making a commitment to stay in the metropolitan area.
“This is not about Kansas or Missouri. This is about staying in Kansas City,” Massey said.
Massey also said the Kansas incentives include an “employment retention” element, but she did not provide specifics on the amounts of the incentives or details about the terms.
“We have been growing for the past year and will continue to grow,” Massey said, noting the larger space the organization will occupy in its new home.
Dan Lara, with the Kansas Department of Commerce, said final documents had not been signed, and so details were not yet public.
Missouri and Kansas officials have been working to avoid using tax incentives to entice each others’ employers to move across the state line.
“Both sides continue to work on that issue,” Lara said, citing a meeting late last year.
In Missouri, Gov. Jay Nixon has signed a moratorium on the practice that makes it contingent on Kansas reciprocating. The Sunflower State has yet to follow suit.
At the same time, it can be difficult to define what deals fit a border war battle.
The Greater Kansas City Chamber of Commerce, with members on both sides of the state line, has a policy that favors using tax incentives that boost area employment. It opposes incentives that simply move jobs across taxing jurisdictions.
And there’s some support for using tax incentives as a tool to keep employers who are being lured by incentives from other metropolitan areas.
“We are pleased to welcome Dairy Farmers of America to the vibrant and growing Village West area, where we offer world-class entertainment and retail for residents and visitors to our city,” Kansas City, Kan., mayor Mark Holland said in the group’s announcement. “We’re excited to continue to grow the region with new housing and office development.”
The Village West area has added several businesses, shopping destinations and other major attractions in recent years, including Cerner Corp. offices, the Nebraska Furniture Mart, the Kansas Speedway and Sporting Park.
The Dairy Farmers of America move is intended to give employees a more open environment to “foster increased collaboration” and incorporate “the technology and amenities” for their work and satisfaction, the announcement said.
The new headquarters is set for completion in December 2016. The design calls for an open floor plan incorporating “abundant glass.”
Dairy Farmers of America is owned by 15,000 dairy farmers nationwide. Through the cooperative, the farmers promote milk and export dairy products and powders to nearly 50 countries. Its brands include Borden Cheese, Kemps, Keller’s Creamery and Hiland Dairy.
Last November, the group announced plans with a Chinese company to build a $235 million plant in Kansas to produce 88,000 tons of milk powder a year. The partnership is with Inner Mongolia Yili Industrial Group.
Massey said the final cost of the building, estimated at $30 million, will depend on decisions yet to be made regarding the specifications for meeting LEED standards for sustainability.
“Amongst DFA’s priorities was retention of their current talent while offering a location that could improve and expand employee recruitment efforts,” Tim Schaffer, executive vice president of RED Brokerage, said in the announcement. “Secondly was a location that would provide their staff and visiting farmer partners with immediate access to a wide variety of amenities.”
Others involved in the project include the design firm HOK, VanTrust Real Estate LLC and J.E. Dunn Construction Group.