Business

Kansas City office towers to house 4,000 workers

KANSAS CITY, Mo. —Cerner Corp. will build two stainless-steel and glass office towers for the 4,000 new employees it's bringing to western Wyandotte County, a project that is being hailed as an iconic gateway to the community.

The complex, to be built over the next four years for the fast-growing health care technology firm, was the prize offered to state and local officials last year in return for their support of a $414 million development deal that included the new Livestrong Sporting Park.

"It's certainly one of the most significant office developments in the history of Kansas City, Kan., both in scale and the number of jobs," Mayor Joe Reardon of the Unified Government of Wyandotte County said Thursday.

Construction on the first nine-story building is expected to begin within six months, and the entire 660,000-square-foot development is to be completed by mid-2015. The office park covers 58 acres between Village West Parkway and I-435.

The buildings' exterior design is based on a digitized image of human DNA, an appropriate symbol for Cerner. Since its founding in 1979, the firm based in North Kansas City has grown to become one of the world's leading suppliers of health care technology.

Marc Naughton, Cerner's chief financial officer, said the operations to be housed at the new complex, called ITWorks and RevWorks, will help customers with their technology infrastructure and billing activities.

"We believe that by the end of the decade these businesses could represent more than $1 billion of revenue to Cerner," he said.

The Cerner office deal was part of a development package near the Kansas Speedway and Village West retail development that included the new professional soccer stadium for Sporting Kansas City, which opened in June.

Neal Patterson, chairman and CEO of Cerner, and vice chairman Cliff Illig are part of the ownership group of Sporting Kansas City.

State and local officials agreed to a subsidy package that included $85 million in state tax credits and $144.5 million in STAR bonds, primarily because of the jobs promised by Cerner.

The development agreement called for Cerner to create at least 4,000 jobs with an average salary of $54,000 a year by Dec. 1, 2016, or face up to a $30.4 million penalty.

"Cerner continues to do well," Illig said. "We fully expect to continue to grow in terms of the number of people in Kansas City, not only our existing business but new lines of business."

Cerner employs 9,430 people worldwide, 6,220 of them in the Kansas City area. It has clients in 25 countries and its revenue has grown 34 percent over the past five years, from $1.38 billion in 2006 to $1.85 billion last year.

"These are all net new jobs, so as Cerner grows in the area of health care information technology that contributes to growth in the Kansas City region," Reardon said.

The mega-development deal that brought the soccer stadium and Cerner jobs to Wyandotte County originally was proposed for the former Bannister Mall area in south Kansas City in 2007.

Kansas City and Missouri offered a $273 million incentive package, but the developer was unable to attract enough retailers to generate the tax revenue to finance the plan. When the city balked at providing additional subsidies, the deal jumped the border in 2009.

Wyandotte County and Kansas development officials agreed to extend the payoff of the STAR Bonds originally issued to develop the Village West project an additional six years to 2020 to subsidize the new soccer and office development.

The retailers at Village West — including the Legends outlet mall, Nebraska Furniture Mart and Cabela's — have been generating about $40 million in tax revenue annually.

  Comments