An office building in downtown Kansas City appears to have the inside track for landing two research agencies under the U.S. Department of Agriculture that relocated to the region earlier this year.
An office building at 805 Pennsylvania Avenue, often referred to as the State Street building after the financial services company that had leased space there, is considered by several sources in Kansas City and Washington the likely headquarters for the Economic Research Service (ERS) and the National Institute of Food and Agriculture (NIFA).
The General Services Administration, which is the landlord for federal government agencies, has been in charge of exploring several locations on both sides of the state line. Officials there could not be reached for comment Friday.
Downtown’s main competitor for the USDA lease was the Sprint Campus in Overland Park, which the wireless carrier sold to Wichita-based Occidental Management earlier this year.
The Star first reported in June that the State Street building was initially in play for the USDA agencies, along with other buildings downtown including the Lightwell tower at 11th and Main streets and buildings in Crown Center. Kansas locations included the Renner Ridge Corporate Center in Lenexa.
An agenda for the Monday meeting of commissioners for the Port Authority of Kansas City lists the creation of an Advanced Industrial Manufacturing Zone at 805 Pennsylvania Avenue. AIM Zones allow the Port Authority to collect 50% of state withholding taxes on new jobs within the zone for the purpose of redeveloping an area.
An Oct. 14 story in the Kansas City Business Journal said that Mark Coulter, general counsel of the Port Authority, had mentioned at a previous meeting about using AIM Zone as an inducement for the USDA.
The USDA announced last year its intention to move both the ERS and NIFA to some city outside of Washington D.C., a relocation that would affect more than 500 employees who were working for the two agencies when the plan was revealed.
Employees who have already made the move to Kansas City are working in temporary offices USDA Beacon Complex near Swope Park.
Kansas City was among 136 cities that put in a proposal to attract the USDA jobs, and earlier this year made the cut down to three finalists along with Indianapolis and Raleigh. USDA officials chose Kansas City earlier this year to the cheers of local officials who coveted the high-paying jobs that were expected to follow the agencies. Local officials offered $26 million in incentives to help bring the agencies here.
Kansas and Missouri partnered on a regional bid. Sites on both sides of the state line were considered, but federal officials have been tight-lipped about which state would land the roughly 550 federal jobs.
Good for KC, bad for research?
Speculation about an imminent announcement has been building in both Washington and Kansas City throughout the month of October.
Rep. Emanuel Cleaver, D-Missouri, said this week that he does not know what address will be chosen but that he expects the facility to be near downtown Kansas City.
“Fingers crossed,” Sen. Josh Hawley, R-Missouri, said Wednesday when asked about signs that the facility would be on the Missouri side of the border.
Critics have lamented moving USDA’s research functions out of Washington D.C., claiming that it’s an intentional attempt at minimizing science-oriented agencies whose findings conflicted with Trump administration policies.
Union officials representing federal workers said the USDA rushed the move to Kansas City at the expense of agency employees who called the Washington area their homes. The congressional delegation in Maryland, where some USDA staff reside, complained that the USDA sought to begin moving its research employees to Kansas City to avoid attempts in Congress at curtailing the department’s access to federal money to fund the moves.
Scott Hutchins, deputy under secretary for USDA, told the U.S. House Agriculture Committee on Oct. 17 that the agencies had accelerated hiring in Kansas City. On a recent visit to temporary offices near Swope Park, he said he was struck by “how happy everyone there was.” Relocated workers shared stories of their reduced commute times and told him about homes they were able to buy in the KC area — one a six-acre horse farm — that they never could have afforded in the Washington area. He said new hires and transfers alike were motivated by continuing the work of the two agencies.
“All the ones I spoke to were very pleased with the region personally and very eager and excited about the professional challenge that they have,” he said.
Rep Vicky Hartzler, a Missouri Republican on the committee, told Hutchins that the region remains committed to supporting the move. She said it would allow savings — $300 million over 15 years, by the USDA’s estimation — to be invested back into research. And she said the Kansas City area touts the talent needed to fill research positions.
“I commend you on your efforts,” said Hartzler, of Harrisonville. ”I stand ready to continue to support you and would just certainly oppose any efforts to oppose this forward progress that has been made. So keep up the great work there.”
NIFA, ERS are recruiting
But hiring has been slow so far.
USDA initially said the move would bring more than 500 jobs to Kansas City. But as of the Oct 12 pay period, only 105 employees had made the move, according to a USDA spokesperson. Another 33 employees received extensions on their relocation dates and will arrive by Dec. 9 or March 30, the spokesperson said.
Cumulatively, 138 workers have moved or plan to move to Kansas City — a lower total than the agency first expected.
To help fill the gaps, the two agencies have relied on short-term contractors, brought back retirees for temporary work and tapped workers in other agencies “to help ensure mission continuity through the transition.”
The spokesperson said NIFA and ERS were currently recruiting more than 100 people. Hutchins told Congress that interest has been high. Some positions, like program leaders in NIFA, would normally receive 50 to 60 applications.
“We have those advertised now, and we’re having 400 to 500 applicants for those particular positions,” he said.
The relocation remains controversial, particularly with scientists and Democrats in Congress.
Both agencies already had double digit vacancy rates before the relocation.
“It’s clear to me that this is not a relocation. It’s a demolition,” Sen. Debbie Stabenow, a Democrat from Michigan, said in a July hearing. “It’s a thinly veiled, ideological attempt to drive away key USDA employees and bypass the intent of Congress.”
The president’s proposed 2020 budget called for slashing ERS funding. Inside the agencies, employees reported attempts at blocking their research. Andrew Crane-Droesch, a former research economist in ERS, told the Washington Post that the department began requiring disclaimers in scientific journal publications, even those that were peer reviewed, “undermining the authority of our own work.”
Once the move to Kansas City was announced, he began looking for other work. He said he completed 42 interviews in two months and now is a data scientist with the University of Pennsylvania Health System
“Most of my colleagues have moved on,” he told the Post.“Contrary to the common talking points about cushy government jobs, we all knew that we could have gotten higher salaries in the private sector, faster advancement elsewhere in the government or more perks in academia.”
A brochure from commercial real estate firm Colliers International shows that five of the building’s six floors are available to lease. Tenants can rent between 5,231 and 200,000 square feet. The Class A office space is advertised at $22.50 per square foot.
That’s just above the average listing of $21.73 per square foot for Class A downtown office space, according to third quarter data provided by commercial real estate firm Cushman & Wakefield.
State Street features garage parking, private patios and the capacity to add an on-site fitness center, the brochure says. A separate advertisement posted to commercial real estate listing service Loopnet showed the State Street building had about 34,500 square feet available for sublease on one floor.
The building’s market value is about $8.5 million, according to Jackson County property records.