Platform Ventures hopes to maximize I-49 multimodal opportunities

At the monthly virtual presentation hosted by the CCIM Kansas City chapter last Friday, Corey Walker, senior vice president with Platform Ventures, offered insight about the I-49 Industrial Center.

Platform Ventures purchased approximately 180 acres of the development, located on the site of the former Richards-Gebaur Air Force Base, from CenterPoint Properties in July 2019. The air force base was decommissioned and closed in 1999.

After the decommission, Kansas City Southern, Port KC and CenterPoint each acquired a portion of the property. CenterPoint commenced developing a business park in 2007 named CenterPoint Intermodal Center. CenterPoint, headquartered in Illinois, left the Kansas City market in 2019.

Walker said that at the time Platform Ventures acquired the development, CenterPoint had developed approximately one-third of the property and had leases with Walmart, Honeywell, U.S. Department of Agriculture (USDA), Sioux Chief Manufacturing and Niagara Bottling LLC.

Walker said Platform Ventures is in the process of adding approximately 60 acres of adjacent land to the industrial park.

Platform Ventures recently completed a rebranding of the site, renaming it I-49 Industrial Center. CBRE is assisting with marketing strategy.

“We thought it needed a fresh makeover,” Walker said.

“The remaining land has a potential for another 2 million SF of Class-A industrial warehouse space and that number could go north with a lot of the tenants that we’re seeing. They have a footprint that they’re now wanting mezzanine structures and potentially multi-floors within the facility which will add to the square footage,” said Walker.

Walker said Platform Ventures was attracted to the site because of the extensive infrastructure already in place, including roads, utilities and adjacent rail, as well as a great labor market.

“As part of our strategy with the multimodal concept, we really wanted to work with our neighbors, especially Kansas City Southern, so we’ve been working with them in concert now for really over a year to figure out ways to really maximize the opportunities for multimodal,” Walker said.

Platform Ventures currently is working on a 366,000-SF, spec building designed for up to four tenants.

“It’s tilt-up concrete, 36 foot clear height ceilings. We’re in the design and entitlement process on that. We’re pretty excited about some of the interest we’re starting to receive on just some of the initial discussions we’ve had,” Walker said.

Platform Ventures also is working with Kansas City Southern on a 300,000 SF bulk freight multimodal distribution facility on the site, with approximately 200,000 SF of outdoor space. The rail line actually goes into the building and into the storage yard.

“Semis and trucks come in the other side and take the product out to the region,” Walker said.

Walker said that Platform Ventures is working with a Fortune 500 company, and the facility is in the final entitlement stages and in design development.

“Both of these projects are moving forward but have a lot of wood to chop, but hopefully if things go well, maybe we’ll start moving dirt in Q1 of 2021,” said Walker.

Walker said activity has been very strong at the park. Platform Ventures has been proactive in pursuing large build-to-suit tenants, but they also want to have square footage available for smaller tenants and tenants requiring shorter build out time frames.

Walker said that Platform Ventures is “fairly bullish” going into 2021, particularly in light of the heavy demand for industrial space in the Kansas City area and the low vacancy rates for industrial space.

“There’s just not a lot of sites in town that can support 500 to 1 million SF industrial facilities so that bodes well for our project,” he said.

How NMTCs transform KC communities

A handful of transformative development projects across the Kansas City area are underway, thanks to New Market Tax Credits, a federal financing tool that is stimulating development in the communities that need it most.

Most of these credits are used in large, transformative real estate projects valued at $10 million or above, while others are used for smaller investments (valued at $500,000 to $1 million) for capital needs such as equipment, plant expansion, and owner occupied real estate that help low income community businesses grow.

Each year, the federal government allocates $3.5 billion nationally. And in 2015, Enterprise Financial Community Development Entity (EFCDE), a subsidiary of Enterprise Financial Services Corp (NASDAQ: EFSC), was awarded $65 million– its third allocation in a row, and the fourth in the last 5 allocation rounds. To date, EFCDE has deployed roughly $183 million in allocations.

We spoke with Enterprise Bank’s Jeff Friesen, senior vice president and director of commercial real estate – Kansas City, and Mitch Baris, president of Enterprise Tax Credit Services, to learn more about the world of NMTCs. Here’s a look at four major Kansas City projects coming to fruition as a result of new market tax credits.

Westport Commons

EFCDE just closed on its latest loan, a $5 million allocation, to the developers of Westport Commons. Kansas City Sustainable Development Partners plans to convert the 160,000-square-foot Westport Middle School into the biggest co-working space in the world, designed to benefit Kansas City’s emerging entrepreneurial ecosystem and respond to businesses’ demands for more collaborative workspace. Space will be leased to for-profit and non-profit tenants, including corporate innovation groups, communications/media, entrepreneurs, technology start-ups, arts organizations and sustainability groups.

The project also received another $10 million allocation provided by AltCap. U.S. Bank Community Development Corporation was the tax credit equity investor in both the New Markets and Federal historic tax credit equity in the project. Enterprise Bank invested in the State historic tax credit equity, and provided some of the debt, along with Missouri Bank.

Sioux Chief Manufacturing

Another project on the horizon that benefited from new market tax credits is Sioux Chief Manufacturing’s new 596,000-square-foot plant located at CenterPoint Intermodal Facility. EFCDE, AltCap, Central Bank CDE, the Port KC and US Bank/USBCDC provided $34.5 million in NMTC allocation, equity and structured financing for the project. The plant, which will be completed in 2016, will accommodate the company’s growing business which expects to create 100 to 150 jobs over the next three to five years.

Three Trails Park

Because the first building in a new park is always the most difficult, as spending on new infrastructure items – sewer lines, roads, etc. – must be started with the first building. What enabled this to happen was EFCDE, Central Bank CDE and USBCDC’s $6.5 million allocation in New Market Tax Credits and equity for the project.

Crossroads Charter School

EFCDE and USBCDC allocated a total of $6.5 million NMTCs and provided equity to this project. Enterprise Bank & Trust provided bridge financing. The financing provided is what allows this Charter School to expand its offerings, and its space, for the future educational needs of this low-income community.

EFCDE says there are a number of reasons why it’s received one of the largest NMTC allocations in 2015.

“There are many reasons why EFCDE received one of the largest allocations of NMTCs in the country in 2015. We are now an experienced CDE, with a proven track record to quickly deploy allocations received – $183 million to-date. We have also designated a significant portion of our allocations in all rounds to non-metropolitan areas, with a proven track record to get these deals closed,” Baris said.

“Also, our two pronged deployment approach to utilizing allocation to not only large transformative projects, but also to smaller capital fund deals, has created a unique model,” Friesen said. “ In addition, we have committed to deploying a sizable portion of our allocation in Kansas – a state considered “underserved” by NMTC allocations. Finally, the fact that we can bring Enterprise Bank & Trust – a very experienced NMTC lender (and the most difficult piece of the complicated NMTC puzzle) to the table only helps our case of being able to deploy allocation quickly after receipt.”