No hurdle too high for KC'S transformative mixed-use developments

“Doing any development today is really hard. Challenges on construction costs, challenges on financing. Doing mixed-use is a whole other level of hard,” said Michael VanBuskirk, SIOR, CCIM, CRE, vice chairman and principal at Newmark Zimmer.

Yet, several substantially sized and transformative mixed-use projects are underway across the Kansas City market.

VanBuskirk was joined by panelists Brandon Brensing, VP of real estate development at Ryan Companies US, Inc.; Grant Curtin, principal and VP at Curtin Property Company; Dan Horn, development manager at IAS Partners, Ltd.; Holly Rome, EVP, national retail leasing at JLL; and Scott Rosemann, P.E., F.SEI, LEED AP, COO at Rosemann & Associates, P.C. at MetroWire Media Kansas City’s Mixed-Use Masterpieces program last week. Erin Rosenthal, P.E., president at PMA Engineering, moderated.

The panelists discussed some of the current area projects as well as the challenges and insights for creating successful and visionary mixed-use projects.

Above: MWM KC Mixed-Use Masterpieces panelists (L to R): Holly Rome of JLL, Brandon Brensing of Ryan Companies US Inc., and Scott Rosemann of Rosemann & Associates P.C. discuss the challenges and timelines for mixed-use developments in KC. Photo credit: Jacia Phillips | Arch Photo KC

One of those projects is Bluhawk, a 277-acre mixed-use project in south Overland Park, Kansas, a large portion of which already is completed. The project includes 380 residential units, AdventHealth South Overland Park Hospital, office and retail. A 420,000 SF sports complex will open later this year.

Another is Discovery Park in Lee’s Summit, Missouri, a 268-acre project.

“We’ve taken the live, work, play and we’ve added stay in there. We’ve got two hotels in our first phase . . . and then medical office was a piece of it because we looked at how close we were to all the regional hospitals, and Lee’s Summit is a medical hub. And then the entertainment piece. . . . We looked at the opportunity to make this a regional destination,” said VanBuskirk.

While Bluhawk and Discovery Park are creating new developments where there were none, some major adaptive reuse and redevelopment projects also are underway.

One is the redevelopment of the former site of the Metro North Mall in the Northland, which is a 106-acre mixed-use development called Metro North Crossing.

“For mall redevelopments in particular, in our experience, the thing we’ve had going for us from day one at Metro North is although the mall became obsolete, the real estate that it sat on is still awesome.  We are right at the corner of two highways—169 and 152—right in the middle of the Northland,” said Horn.

Another project in Overland Park is the redevelopment of the Brookridge Golf Course, a 200-acre site being developed by Curtin Property Company. According to Curtain, the project, called Meridian, will feature 2,000 units of multifamily, two million SF of office, retail, food and beverage, entertainment, several hotels and green space. Once completed, the project will retain 18 holes of golf and have a health and wellness focus.

Above: MWM KC attendees enjoy breakfast and coffee while listening in on the panel discussion moderated by Erin Rosenthal of PMA Engineering. Photo credit: Jacia Phillips | Arch Photo KC

Mixed-use projects help to satisfy housing demand, which remains high, Brensing said.

“Kansas City has fared fairly well when it comes to rents, absorption, vacancies and those kinds of standpoints. We’ve seen about a 2.9 percent year over year rent increase. With a limited amount of supply coming onboard, we expect that number to increase through the remainder of the year and potentially into 2025.. . . And we’re going to continue to see a lot of growth not only in class A, but also the class B multifamily,” said Brensing.

VanBuskirk said Kansas City’s retail market is very strong. And although office vacancy in Kansas City is pushing 18 percent, office is doing well in mixed-use projects, he said.

“As we do these projects, we incorporate office into it as a very important critical component to have success,” said VanBuskirk.

The panelists discussed the importance of placemaking in mixed-use projects.

“What it does is it creates an authenticity. It creates a connection to the community. And, it creates a vibrancy in the development. And it’s not just one thing that makes that place that you want to go to. It’s everything that’s put together. It’s the architecture. It’s the landscaping. It’s what retailers you put in there. . . . So, it’s very purposeful and intentional,” Rome said.

“Placemaking is huge. There’s no doubt about it. And the thing that we caution all our developers is placemaking happens, whether you mean for it to or not. Every development is making your place whether you know it or not,” Rosemann said.

According to Horn, another critical element to the success of a mixed-use project is understanding up front what the specific community in which a developer is putting a project wants and what the community is missing.

“Every trade area in Kansas City is a little bit different,” Horn said.

“Talk with your city officials. Understand what they are looking for,” said Brensing.

Above (L to R): Deb Blaylock, Karen Saper and Jason Osborne network at MWM KC’s Mixed-Use event. Photo credit: Jacia Phillips | Arch Photo KC

Mixed-use projects present financing challenges, and although lenders and financing sources are less leery of these projects than they once were, many mixed-use projects would not happen without including a public private partnership component, Curtain said.

“It’s really difficult to make financial sense without the public’s side of investment in the project, whether it be property tax abatement or sales tax incentives and things of that nature,” said Horn.

According to Rosemann, it is important to include current architecture and design trends in mixed-use projects because that’s what tenants and shoppers expect. Design trends today include pet-friendly amenities and places on site to create an “Instagram moment.”

Rosemann also said being nimble and flexible in designing mixed-use spaces is crucial.

“If there’s one thing COVID and everybody being forced to go home taught us, it is that we end up using our spaces in the life of a building in ways that we really, really can’t envision now. So how do we give some thought to a space that can be used multiple ways, whether that’s today or five or 10 years from now,” he said.

“We’re really getting creative with these developments to get people to work there, live there, play there,” Rosenthal said.

Kansas City’s mixed-use market is faring well.

“I would say the fact that we have everyone here at the table talking about the size of the projects we’re talking about tells you how Kansas City is doing. And, that’s very well,” said VanBuskirk.

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Feature photo credit: Jacia Phillips | Arch Photo KC

View the complete event photo album by Arch Photo KC here

Unity Village CEO casts vision for holistic health campus

Unity Village CEO Jim Blake shared a vision for a holistic health and fitness community with tiny homes and natural amenities on its sprawling campus near U.S. 50 and Colbern Road. 

“Why not build a huge hotel and conference center here?” Blake said. “We can attract speakers here if we had greater inventory, and the business community would have whatever it wants in a conference center next to a 9-hole golf course, walking trails and fishing lakes.”

Blake shared his vision with Lee’s Summit Economic Development Council leaders at a recent luncheon, adding that Unity would like to pursue collaborative public/private partnerships to build a convention center and resort. 

Although no official plans have been drafted, Blake envisions a healthy lifestyle community that is home to a first-of-its-kind holistic medical facility staffed by a renowned naturopathic physician. The community would offer summer youth programs that take advantage of miles of trails, stocked lakes, golf course and tennis courts as well as a new tiny home development.

“Nature is built on collaboration. Ecosystems are built on collaboration. Survival is building upon how communities collaborate. We have the opportunity to collaborate and build something powerful in this community rather than build something separately,” Blake said. 

Any new development would complement existing facilities, which include an all-new golf clubhouse with food and beverage, 50-room LEED-certified hotel and conference center, banquet and dining hall, fitness center, 2.5 miles of walking trails, fleet of GPS-enabled bicycles, a community garden and apple barn, as well as Starbuck’s on-campus coffee shop.

Blake’s vision is purely conceptual at this point. However, commercial development already is taking shape on campus and in the Summit Village development just south across Colbern Road at I-470 and 50 Highway. A new public road has been extended off the recently constructed Blue Parkway, and Summit Eye Center has completed construction on the first phase of its new medical office building.

At buildout, phase one of Summit Village will accommodate up to 500,000-square feet of office, medical office, hotel and other commercial users requiring between 5,000 to 50,000 square feet, according to Michael VanBuskirk, principal of Newmark Grubb Zimmer, which is handling development of the project on behalf of Unity Realty.

Preliminary approval is in place for an already constructed pad site adjacent to Summit Eye Center that will accommodate a 20,000-square foot building. In addition, nearby sites are available for sale or build-to-suit opportunities. Phases two and three of Summit Village include an additional 175 acres to accommodate over 1.5 million square feet of various mixed-use development for a  potential major headquarters site or rail-served flex industrial park.

Meanwhile, on-campus leasing activity is robust, with multiple spaces available. Current tenants include Almeda Labs, Healthcare Solutions Team, JSC Engineering, Transit Pros, Gardens at Unity Village, Unity Village Chapel, as well as Unity Worldwide ministries.   

“We started rolling out on-campus leasing about a year ago, and right now there is 30,000 square feet of third-party tenants already occupying space,” VanBuskirk said.

MWM Panel: Eastern Jackson County poised for peak altitude

MetroWireMedia's 2017 events series took flight Tuesday at Lee's Summit Municipal Airport, as the region’s leading developers, brokers and attorneys offered a birds’ eye view of the Eastern Jackson County commercial real estate market.

Surrounded by business aircraft and aviation mechanical equipment, panelists tackled everything from incentives to infrastructure to industrial spec development while updating myriad mixed-use and multifamily projects already aloft in the metro's eastern suburbs. 

Cerner’s new South Kansas City headquarters already is driving demand for new, amenity-rich single-family and multifamily housing options in Lee’s Summit and along the I-70 corridor, creating ongoing opportunity for retailers and restaurant operators.

“Families are happy and want to be in Lee’s Summit. And if you have a community where people want to live, retailers will follow,” Block & Co., Inc. Director Bill Maas said.

The consumer shift to online shopping is forcing many retailers to re-evaluate and scale back their brick-and-mortar footprints, but it also creates an opportunity for well-situated retail centers, according to Eric Mann, director of development for RED Brokerage.

“It’s location, location, location,” Mann said. “What goes into that is demographics, visibility, access and workforce. I-70 continues to be a great access point for Lee’s Summit, drawing people from areas like Odessa, Concordia and even further away.”

All signs point to continued growth; Lee’s Summit’s population is expected to reach 100,000 by 2020 and new single-family building permits are approaching pre-recession levels. Anecdotally, NorthPoint Development’s The Residences at New Longview apartments saw the fastest lease-up of any community to date when it opened in 2016, according to NorthPoint VP of Development Mark Pomerenke.

With $1 billion in public and private investment in Lee's Summit in 2015-2016, the flight path is clear, but panelists cautioned that rising construction costs and availability of incentives could create headwinds.  

“There are a lot of opportunities in Jackson County, but many properties don’t have infrastructure in place,” said Christine Bushyhead, an attorney whose law firm Bushyhead LLC specializes in incentives and public finance. “The fact is we need infrastructure.”

Rick McDowell, Lee’s Summit EDC president and CEO, agreed on the need for more shovel-ready sites but said development of a 200,000 square foot speculative industrial building at The Grove, an 83-acre mixed-use project on south Missouri 291, should encourage future activity.

“The key to landing advanced manufacturing and warehouse and distribution tenants is having product ready and available,” McDowell said. “We see tremendous opportunity for industrial growth near The Grove and in the area near Lee’s Summit Municipal Airport on the north side of town.”

Panelists said Lee’s Summit has potential to attract Class A office users, thanks to its strong workforce and workforce development programs supported by the Missouri Innovation Campus and Summit Technology Center.

“The biggest challenge is lack of product, but Lee’s Summit has come a long way in getting ahead and having development-ready sites,” said Michael Van Buskirk, Newmark Grubb Zimmer executive managing director.

Developers of the Paragon Star soccer village and entertainment complex at I-470 and View High Drive are hoping to lure Class A office users. The first phase of the $200 million destination entertainment complex is master planned for Class A office space, as well as hotel and retail space, according to Paragon Star Principal Bill Brown.

“Paragon Star’s location is a gateway to Lee’s Summit and Eastern Jackson County, so office users and brokers should begin looking at Lee’s Summit in a different way,” Brown said.

Ron Baker, Saint Luke’s East Hospital CEO, also served on the panel. Lee’s Summit Mayor Randy Rhoads was emcee, and John Lovell III, Cobbs Allen risk consultant, moderated the discussion.

John Ohrazda, Lee’s Summit Municipal Airport Director, teed up the discussion by updating the airport’s 5,500 foot-long runway extension project, which will allow larger jets to takeoff and land and is expected to boost corporate airport traffic by up to 30 percent. The new runway is expected to open in August.