2013 Saw Rebound in Residential Construction

The Kansas City area finally was looking at the Great Recession in the rearview mirror in 2013 when it came to development, led by a strong rebound in residential construction and Cerner's seemingly insatiable appetite for office space.

For most of us, the key trend was the return of a healthy housing market. Existing home values increased, sales were up and the most new homes were built since 2007.

For the overall metro economy, there were three big news events: the decision by Cerner to pursue a major office development on the old Bannister Mall property that is ultimately projected to accommodate 15,000 new workers; the opening of BNSF Railway's new sprawling intermodal center in Edgerton, Kan., promising thousands of distribution jobs; and the hint of a Border War truce.

The year-end announcement that Aviation Technical Services will put a 600-employee aircraft maintenance operation at the KCI Maintenance, Repair and Overhaul Base also was a reminder of how important real living-wage jobs are to this area.

The jobs being created by the Everett, Wash., company are a stark counterpoint to the mirage of job creation shimmering from the Border War. Kansas and Missouri officials can claim job growth when a firm shifts from one side of the state line to the other thanks to hefty incentives, but that's an illusion with no net gain to our local economy.

The new ATS employees, like the new workers hired by Ford at Claycomo and preserved at the Fairfax plant by GM thanks to major reinvestments, will buy homes, bring new business to stores and actually pay taxes that go to support government services. That's instead of tax revenues going to companies, as is the case with the Border War incentives.

At year's end, Missouri Rep. Ryan Silvey introduced legislation that would prohibit the use of Missouri development incentives for any company crossing over from Johnson, Wyandotte, Miami or Douglas counties.

It would not go into effect unless Kansas reciprocated, and there is hope on that front too. Pat George, Kansas' secretary of commerce, has established a seven-member advisory board of mayors, economic development officials and legislators to prepare recommendations to the coming session of the Kansas Legislature.

Cerner Corp. is hiring too, and the health care technology giant had barely opened its office campus at Village West near Kansas Speedway for 4,000 new workers when it announced the big Three Trails office plan for the forlorn Bannister Mall property.

That plan is expected to roll out over 10 years and add 4.5 million square feet of office space for 15,000 jobs Cerner expects to create.

There's more good news just down Bannister Road from the planned Cerner campus. The federal government and its private development partner, CenterPoint Properties, are committed to demolishing, cleaning up and redeveloping the old Bannister Federal Complex beginning in 2016 after its current tenants are relocated.

The gradual dismantling of the old World War II plant has spun off about $1 billion in development activity. Mainly, that includes the new Internal Revenue Service processing center near Union Station and the new Honeywell nuclear weapons parts plant at Missouri 150 and Botts Road.

The feds also announced that 900 workers at the General Services Administration offices at Bannister will move to leased space in the Two Pershing Square building in downtown Kansas City by the end of 2015, a boost to the downtown economy.

Some old business also got finished — finally — when the Plaza Vista development opened by the Country Club Plaza. It was eight years ago that advertising exec Bob Bernstein kicked off what was then the West Edge office and hotel development at 48th Street and Belleview.

After a tortuous saga that included bankruptcy for Bernstein's development firm, the demolition of his never-occupied custom office building and the evaporation of more than $100 million in value, VanTrust Real Estate completed the project now occupied by the Polsinelli law firm and Hotel Sorella.

VanTrust is also riding to the rescue of the stumbling East Village redevelopment area of downtown, becoming co-developer with Swope Community Builders. The first project is expected to be a 180-unit market-rate apartment building at 10th and Holmes streets.

This passing year was indeed the year of the apartment, with projects springing up from downtown to the four corners of the metro. The latest report from the Kansas City Home Builders Association found 2,768 multifamily permits issued through November, up 58.3 percent from the same period last year.

There's not enough room to begin to name all the important projects, but the most game-changing deal continues to be the renovation of dilapidated apartment-hotels in midtown Kansas City by Mac Property Management. Since 2006, Mac has renovated two dozen buildings along Armour Boulevard from Troost Avenue to Broadway, adding 1,500 market-rate apartments.

Homebuilding also is up through November with 3,803 single-family permits issued, already making this the best year since 2007. Builders hope to reach 4,000 starts by year's end.

Prices and sales for both existing and new homes also increased, Realtors reported, and it's now firmly a seller's market for existing homes, for the first time in several years. Average sales prices for both new and existing homes were up 7 percent last month.

Winding down 2013, a couple of other observations:

The new streetcar line planned for downtown Kansas City between Crown Center and the River Market is still more than a year away from rolling, but it's already injected a huge psychological boost to downtown with a dash of real stuff too.

A Boulder, Colo., developer cited the streetcar as a major reason for deciding to build a five-story apartment building on what's now a surface parking lot at 1914 Main St. Other developers have described the streetcar route on Main Street as a nice amenity, but no substitute for providing adequate parking.

To me, the streetcar won't be much more than a cool downtown shuttle and promising symbol the city is finally getting its rail-transit act together until the line connects key urban districts to downtown, including UMKC, the Plaza, Westport and midtown — the River Crown Plaza line.

Finally, a sentimental sigh about Boulevard Brewing deciding to sell to a Belgian company, Duvel Moortgat.

I know the new Belgian owners plan no changes to the brewery that in its short 25-year history became a beloved Kansas City institution. Selling out to Duvel also promises to add capital to expand capacity and increase Boulevard's market reach from Peculiar to Paris.

Still, it takes a little away from the hometown pride of seeing my favorite brew on tap when I travel back to South Dakota and Omaha, Neb., to visit friends and family.

I guess I'll have to drown my sorrows in the new Boulevardia street festival the brewer is planning next June in the West Bottoms.

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