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Cerner Corp. to Revive Dead KC Mall Site With ‘Monumental’ $4.3B Expansion

Health Care Software Co. to Replace Former Bannister Mall With 4.5 Million-Sq-Ft Campus, Eventually Creating 15,000 New Jobs
January 24, 2014
One of the largest economic development projects in Missouri history, involving plans for 4.5 million square feet of offices, data centers, retail, and a hotel, will soon begin emerging from the demolished remains of the former Bannister Mall.

A development group headed by medical information technology company Cerner Corp. in late December closed on the purchase of the 237-acre site at I-435 and Bannister Road for a reported $44.2 million. The sale paves the way for the expansion by Cerner that will create up to 15,000 new jobs.

While not the largest office development in the history of the market in terms of square footage, it would certainly be the costliest. The Sprint world headquarters campus in Overland Park, KS, totals 4.1 million rentable square feet but at the time of its 1999 delivery, the project cost $700 million a -- a fraction of the $4.3 billion pricetag of the Cerner project, to be built over 10 years.

The proposed project is also the latest and possibly largest example of adaptive reuse of a derelict shopping mall site. Bannister Mall in the Three Trails Crossing area of southeast Kansas City was once one of the largest malls in the region, with 180 stores and hundreds of employees. The mall, built in 1980, descended into blight in the 1990s as newer shopping centers opened in the area, eventually closing in 2007.

The mall buildings were demolished in 2009 and the site is surrounded by other vacant retail properties that would also be a part of the massive adaptive reuse project.

The expansion of Cerner’s nearby Innovation campus will include a training center, a health clinic, food service and a fitness center. Cerner has more than 8,700 associates in Kansas City, with nearly 3,000 at the Innovation campus.

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Cerner has already started further demolition at the site to prepare for vertical construction, said Cerner President Zane Burke, adding the project will "further reinforce the region’s reputation as a technology and innovation hub."

The city in October approved the Bannister/I-435 Tax Increment Financing (TIF) plan, providing for the development of the 4.47 million-square-foot mixed-use office campus to be completed in 14 phases over the next decade, along with infrastructure improvements.

The plan includes about 3.8 million square feet of office space, a 75,000 square foot day care facility, 249,000 square feet of retail space, a 121,000-square-foot hotel, and 240,000 square feet of data center space.

The state has proposed an incentive package based on the company’s performance in creating jobs and investment in the expansion, which Gov. Nixon described as "transformative" and "monumental."

Please see CoStar COMPs #2920843 for more information on this transaction.

Editor's Note: This article is excerpted in the current edition of In The Pipeline, CoStar Group's column tracking new development and construction. To receive the column by e-mail, simply join our distribution list.

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