Applebee’s International is moving its headquarters and 390 jobs to Kansas City from Lenexa, the first major counterblow by Missouri since a business-poaching feud began in earnest more than one year ago in the metropolitan area.
The restaurant chain is relocating to an office building at 8140 Ward Parkway from its current quarters at 11201 Renner Rd.
Until recently, the Ward Parkway building had been primarily occupied by once high-flying mortgage company NovaStar Financial.
For Applebee’s, its return to Kansas City, expected to be completed Sept. 30th, is a homecoming of sorts.
The firm was founded in Atlanta in 1980, but was purchased by a Kansas City firm in 1988 and had its first headquarters at 3929 Broadway. It moved to Overland Park in 1993 and then Lenexa in 2007.
The first local Applebee’s restaurant in Kansas City opened in 1986 near 103rd and State Line Road.
“We have a rich, longstanding relationship with the metro area,” Mike Archer, president of Applebee’s Services, Inc., said Friday. “We’re happy to launch the next chapter of our business so close to the first Applebee’s in the Kansas City area.”
The move includes 350 employees at what’s referred to as the Applebee’s restaurant support center in Lenexa and 38 members of its centralized supply chain. Applebee’s is now owned by California-based DineEquities, Inc., which also owns IHOP, formerly International House of Pancakes.
Kansas City Mayor Sly James, who took office a month ago, was credited with playing a significant role in encouraging Applebee’s to relocate to the city.
“We are excited to keep Applebee’s, the world’s largest casual dining chain, in the region, and thrilled they selected Kansas City, Missouri for their headquarters,” the mayor said in a statement.
“Applebee’s has always been a friendly neighborhood restaurant, and it is absolutely perfect they will headquarter in one of America’s friendliest cities.”
The search for a new home for Applebee’s began in earnest in early April when it was announced the federal government had signed a lease to relocate the regional office of the U.S. Environmental Protection Agency from downtown Kansas City, Kan. to the building at 11201 Renner Rd.
The 187,000 square-foot Renner Road building had been designed to accommodate more than 500 employees, but when Applebee’s was purchased by DineEquities, that number was significantly smaller. Applebee’s said it only needed 100,000 square-feet to accommodate its operations.
Early speculation was the firm would take advantage of the low lease rates and amenities offered at the Sprint campus at 119th Street and Nall Avenue, but Kansas City and Missouri state officials quickly recognized that this time they had an edge in the incentive battle dominated up until now by Kansas.
When it comes to incentives, the overwhelming advantage has been with the state luring new jobs, not to the state trying to retain them.Kansas had been successful luring Kansas City companies in large part due to an incentive program that reimburses 95 percent of the employee state withholding tax for up to 10 years.
In December 2009, JPMorgan Retirement Plan Services decided to relocate 800 employees to the Sprint campus Overland Park; last July, Hoefer Wysocki Architects said it was moving its 65 employees to Leawood; and in August, KeyBank Real Estate Capital decided to take its 300 employees to Sprint.
Currently, AMC Entertainment is weighing an incentive offer from Kansas estimated at $47 million to leave its downtown headquarters.While Missouri has a similar incentive program, but up until Applebee’s, it had none of the ripe cross-border targets available to Kansas.
Two weeks ago, James used an announcement of a new business retention program by the Kansas City Economic Development Corp. to say the city would no longer "sit on the sidelines" and watch its businesses poached.
While James decried what he called the waste of taxpayer money on both sides of the border diverted to the incentive battle, he observed Kansas economic development officials might have to lose a couple of rounds before declaring a cease fire.
“The days of sitting back and watching it happen are over,” the mayor said at the EDC event. “Mutually assured destruction only works if both sides are armed.”
On winning the Applebee’s deal, James praised the work of the EDC and other agencies.
“We had a fantastic team working on this project and a great deal of credit should go to Executive Hills, the EDC, city staff and the state of Missouri for getting this deal done,” the mayor said.
Executive Hills owns the building at 8140 Ward Parkway where Applebee’s will be relocating. During the housing boom, NovaStar, then one of the biggest subprime lenders in the country, was its major tenant. Since the recession, it’s laid off most of the 2,000 employees it had at its peak.“We’re happy to have found a building that meets the unique business needs of our companies,” Archer said.
“Our company has unique space and office needs including the ability to build a state-of-the-art culinary center, collaborative workspaces and large meeting rooms.”