Development

Marion Park serves as a cautionary tale to Cerner’s massive south KC investment

Lou Austin and Stacey Johnson-Cosby are working to help south Kansas City neighborhoods near the new Cerner campus get a substantial economic and cultural boost out of the large project and other development.
Lou Austin and Stacey Johnson-Cosby are working to help south Kansas City neighborhoods near the new Cerner campus get a substantial economic and cultural boost out of the large project and other development. skeyser@kcstar.com

They don’t know what’s inside there now.

Storage, they’re told. The building’s dirt-streaked concrete tower hides behind overgrown, untended trees like an ancient ruin.

“What a shame,” said Carol McClure, one of the visitors outside its barbed-wire fence.

The man they thought would save the economic fortunes of south Kansas City was once laid to rest in the garden behind this forgotten memorial building.

That’s how sure Ewing Marion Kauffman was that his Marion Park dream was going to be a lasting jewel — a place of vigorous industry and natural beauty.

And everyone believed it.

“We thought we were set,” McClure said. “I never thought it would go away.”

Less than two miles to the north, mighty construction cranes lift the first towers from the ground that will be Cerner’s $4.45 billion campus — the largest tax-increment-financing-supported project ever in Kansas City history.

Longtime south Kansas City activists like McClure, like Lou Austin, want to believe in it.

A new generation of community doers, like real estate agent Stacey Johnson-Cosby, perched like hawks, eager to help, want to believe in it.

So much about Cerner’s big move seems sure: A growing giant in a booming medical information technology industry. A company projecting 20,000 employees by 2020 — 16,000 of them to be right here.

Forgive these south Kansas Citians, though, for their gnawing pessimism.

After all, 20 years ago, Kauffman’s Marion Park was then the largest TIF project in Kansas City history.

The pharmaceutical labs that Marion Merrell Dow promised were built in the 1990s, but virtually none of the expected development in the surrounding park followed. Kauffman died, and Marion merged, splintered and faded.

A community already in economic decline, moored too desperately to Bannister Mall’s sinking hulk, continued its fall.

There are many differences two decades later that give Cerner some footing Marion never had. The area is no longer chasing dying retail. Adjacent lands are in the hands of fewer, but much bigger, players, like Jim Stowers III.

“Instead of people with lots of problems, you have people with the means to make things happen,” said Whitney Kerr Sr., a real estate developer who has been meticulously setting up south Kansas City’s chessboard for years.

Concerns, though, strike deep for a reason.

These invested south Kansas Citians want to know that many new workers will come to live in the area, not just work by day and flee. They want to see links to public transit and trails that connect communities. They want to know that Cerner and its megalopolis will truly last.

Because what happened before can’t happen again, they say. It can’t.


Security guards? Guard shacks?

Sherwin Epstein didn’t necessarily see the future that day in the early 2000s when he pulled his car into the Bannister Mall parking lot to go shopping. But he felt a deep rumbling.

Heavy, visible security around shopping malls was an unusual sight back then.

Looking back, the attorney who has represented many of the developers in the Three Trails area around the former Bannister site sensed that the area was heading into a much more difficult transition that would blunt Kauffman’s dream.

It didn’t matter, as Epstein believed, that safety concerns were misperceptions prodded by a demographic shift toward more black families in the neighborhood.

“People were insecure,” he said. “It had seemed all the pieces were in place (for the Bannister Mall and Marion Park area to soar again), but they weren’t.”

No one had truly imagined such a fall would come. Everything Kauffman had touched had turned to gold. This was a sure thing.

“We’re not speculating,” Marion vice president N. Les Clark assured onlookers when the company announced its big plans in 1992.

“This is our Corporate Woods,” then Kansas City councilwoman Judy Swope said when the park opened its 165 acres six years later.

Many Marion employees lived in the area. Kauffman’s dedication to south Kansas City was revered. The tax increment financing for the development allowed the developers to recoup all the value of increased property tax bills to offset the cost of the projects, but Kauffman requested only half, meaning the Hickman Mills School District benefited by hundreds of thousands of dollars a year.

“It was an unheard-of generosity,” the district’s chief financial officer said at the time.

Kauffman died in 1993 at age 76. That same year, Marion Merrell Dow was experiencing sagging sales and layoffs. Even as the new plant was being built, the direction of the company was bending away from Kansas City.

When Germany’s Hoechst AG bought the company in 1995, it kept the headquarters in Marion Park. But another merger four years later with Rhone-Poulenc SA created Aventis, which eventually took the headquarters to New Jersey.

Meanwhile, Bannister Mall and the retail and restaurant industry surrounding it were failing.

Fourteen neighborhoods stretching to the east of Marion Park — desperate for revival — saw no increase in their share of citywide commercial development beyond Marion’s construction in the early 1990s, city data show.

Those neighborhoods only lost workers, and residential construction and improvements fell stagnant while builders worked elsewhere.

As of the end of July, city records show the Marion Park TIF’s developers still had $124 million in reimbursable costs that have not been repaid with the TIF’s tax breaks — the largest unpaid balance in the city’s TIF portfolio.

By 2000, Kauffman’s rich and treasured legacy in Kansas City was now fully reflected in the Kauffman Foundation along Brush Creek.

The family quietly relocated the graves of Ewing and Muriel Kauffman from Marion Park’s once elegant memorial to the new memorial garden by the foundation.

McClure remembered the time 20 years ago when she visited the Marion Park building — how it was so lushly landscaped, glamorously shining in its reflecting pool, its outside walls elegantly white and tan.

“It’s really strange” to see it now, she said. “I hadn’t realized it had turned so gray and black.”


This is how it’s going to be different, Johnson-Cosby said.

She represented the young blood — she and Cathy Knight-Kotzias — two Realtors and officers in the South Kansas City Alliance, talking plans again in Lou Austin’s office.

Austin represented the old blood, those who have been at this for decades, it seems.

The Realtors were dressed for business. They were pulling up information and records they had stored on their phones.

Austin was the one wearing a T-shirt that read, somewhat jokingly: “R.I.P. In memory of when I cared.”

They were going to find out what Cerner’s burgeoning workforce wants in a community. Johnson-Cosby was designing a survey, which Cerner had said it would distribute.

Will the employees be looking at homes? Will they be looking at apartments? Do they want restaurants close by? Biking and walking trails? What kinds of services, amenities, diversions?

There are beautiful housing additions, Knight-Kotzias said, mentioning Bent Tree, Timber Trace and others, and green fields between there and Lee’s Summit.

They know people worry about the public schools. The Hickman Mills School District has struggled on the state’s performance measures. But the district is stronger now, Johnson-Cosby noted. It is offering free universal pre-kindergarten. It is delivering advanced engineering programs.

They’re going to promote the schools, she said, “and some will say, ‘Let me look.’”

Austin joins in the work, but that includes pushing his concerns.

He doesn’t like it that when he squints and looks over the emerging construction beyond his property, he sees a lot of platting for parking lots, while Hillcrest Road, which had been the through bus line, has been chopped off at 93rd Street.

To him, it is looking too much like a “1980s fortress development off an interstate.”

How adaptable will the giant campus be if the owners change? If the mission changes?

“With Marion Park, we all turned a blind eye,” Austin said. “It was going to be a great project led by an incredible man. But it turned out we had feet of clay. The Kauffmans had feet of clay.”


To all of this, Cerner’s executive vice president and chief operating officer, Mike Nill, says Cerner’s founders and officers love this city too.

“Cerner’s been around 35 years,” he said. “Our roots are in Kansas City.”

The company’s “very large investment” in south Kansas City “will have an impact on the growth and economy.”

Those 16,000 employees will come from a contemporary tech pool of talent that trends against commuter living, he said.

“They want to live close to work,” he said. “They want amenities. They work hard and want those conveniences.

“It’s very logical to me. We are going to create demand.”

The sacrifice by the community in getting there will be large.

Cerner’s plan approved by the TIF Commission will allow Cerner to save some $1.75 billion in projected increases in property and economic activity taxes that it will use to pay off development costs.

TIF freezes property tax bills to the amount on the property’s original assessed value for up to 23 years or until development costs are covered.

Nearly 70 percent of the property taxes go to the Hickman Mills School District. Cerner will be contributing $6 million a year to the district, but that only partly offsets the projected increase in property tax revenue — approaching $14 million to $15 million a year by the middle of the next decade — that the district would receive without the tax break.

Cerner will return the debt, Nill said. It will work with the community. It will serve the schools. It is listening to transit concerns.


Looking for signs of optimism?

There’s the big picture — the one Whitney Kerr Sr. describes on the floor-to-ceiling aerial photo of Kansas City coloring the conference room wall of the downtown office of Cushman & Wakefield, the real estate company where he is senior vice president.

And then there’s the closer look seen in the eyes of Nicole Johnson, property manager of the upscaling apartments at The Haven, who is contemplating other ways to lure Cerner workers.

It all takes time, lots of time, and lots of work, Kerr said.

“Creating value in real estate is solving problems one stairstep at a time,” he said. His hands rose one after the other. “Step after step, putting land together.”

Just to the west of Interstate 435 on 87th Street, Damon Pursell Construction has painstakingly recovered 90 acres of undermined land that is set for office and light industrial development at NorthPoint.

Immediately to the north on 87th, Kerr has pieced together 350 acres that Jim Stowers III is preparing to turn into his Oxford on the Blue biotech business park.

All of these weighty assets were still far off when Kauffman’s Marion Park made its leap.

“All of sudden, instead of it being like rats leaving a sinking ship, we started getting very substantial people here,” Kerr said.

Johnson’s bosses with Utah-based Sundance Bay believe the prosperity wave is coming. The company bought the former Madison Square apartments, plus other apartments in the area, and has begun widespread renovations inside and out — with higher rents.

She had just shown off the new pool area, the plans for an outdoor kitchen, the new lounge area with billiard tables, stainless steel kitchen counters and bar, when she stopped with a long glance at the shaded green grass along the creek outside the picture windows.

“That,” she said, “could be a yoga area.”

Other speculators are inquiring as well, said Heather Brown, the TIF executive director for the Kansas City Economic Development Corp. She knows of a couple looking at retail and restaurants.

South Kansas City is getting another shot, or finally realizing the opportunity Kauffman saw all along, Kerr said.

“It takes somebody to make land investment,” he said, “who understands how important it is to a great city — the renewal process, replanting the garden.”

Marion vs. Cerner

The Marion Park project in south Kansas City, approved in 1992, was the largest tax increment financing project in Kansas City history. Now Cerner’s project just north of the Marion Park site stands as the city’s largest TIF project.

 

Marion Park

Cerner

Year TIF approved

1992

2013

Total estimated cost

$278 million

$4.45 billion

Estimated amount reimbursable

with tax revenue

$223 million

$1.75 billion

Outstanding balance of

unrealized tax revenue

$124 million

n/a

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