Stag's Creek success spurs Shawnee spec office construction

Construction is underway for Stag Commercial's new $7.5 million office project on the northwest corner of Goddard and Shawnee Mission Parkway. The three-story building will be the anchor of the $15.5 million Stag's Creek mixed-use project and is the culmination of a 5-year neighborhood revitalization effort. 

“With an innovative design of steel and glass, Stag’s Creek is filling a strong need for Class A office space in northern Johnson County.” said Kevin Tubbesing, principal with Evergreen Real Estate Services, which is developing the site.

The purely speculative, 35,000-square foot office building will be Shawnee’s first to include enclosed, heated parking and provides the only class A office space along the I-35 corridor between Lenexa and Downtown Kansas City.

Slated for a fourth quarter delivery, the building rounds out a broader redevelopment that involved demolition of a pawn shop, Texas Tom’s restaurant and used-car lot to make way for a new Raising Cane’s restaurant, now under construction, as well as an Andy’s Frozen Custard shop.

“We are turning a distressed commercial area into a new gateway for the City of Shawnee. It’s something the city has been talking about for 30 years," Tubbesing said.

The site presented significant design challenges including flood control requiring realignment of a Turkey Creek tributary. 

“This has been an extremely difficult infill project. I don’t know many projects where you had to relocate a creek,” Tubbesing said. “We were able to create a true public/private partnership with the City of Shawnee to obtain funds for flood control through the county and the City of Shawnee's Economic Development Fund to move the creek and enlarge the developable area.”

Tubbesing said it’s been rewarding to turn the project’s challenges into unique opportunities; typically anchor tenant commitments help finance projects, with pad sites filled later. For Stag’s Creek, the process worked in reverse.

“Because we had interest in these one-story retail pad sites, we were able to take advantage of those demands in the marketplace and sell those pad sites early. That really helped our ability to finance the project,” Tubbesing said. “And I like infill because it creates a change in landscape from what everyone has experienced for years into something new for the community.”

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The Stag's Creek mixed-use project is the culmination of a 5-year neighborhood revitalization effort that involved realigning a Turkey Creek tributary.

Multifamily projects create tipping point for Downtown Overland Park office development

JONNA LORENZ | Contributing Writer

Downtown Overland Park redevelopment got a shot of adrenaline this week with news that Freightquote.com founder Tim Barton plans to develop a 130,000-square foot office tower on a site that includes the Overland Park Presbyterian Church near 81st and Marty streets.

Longtime Kansas City broker and developer Jim Harpool of Evergreen Real Estate Services helped Barton assemble the land, which amounts to almost a full city block. Harpool said the office project arose in response to an uptick in luxury multifamily and mixed-use projects under construction downtown Overland Park.

“Millennials look for a place to live first, and then they go look for a job. They want to work wherever it is cool and where it’s happening,” Harpool said. “We’ve had some office users who have called us and said, ‘Hey, I’m located in an office park, and there’s nothing to walk to, and we can’t get Millennials to come and work for us.' "

"Everything is really going fantastically," Mayor Carl Gerlach said of several mixed-use projects that are "building the density downtown which we were looking for in the Vision Metcalf plan" adopted in 2007.

Over the next two years, a total of four new developments are set to bring more than 500 new apartment units, an estimated 22,000 square feet of retail space and over 17,000 square feet of office space in Downtown Overland Park. 

On April 4, Hunt Midwest Residential Development officially broke ground on The Vue high-end mixed-use project just steps away from Barton’s planned office tower. Located at the southeast corner of 80th and Marty streets, The Vue will include 219 luxury apartments, 10,000 square feet of retail space, and a structured parking garage.

Leasing for The Vue won’t begin for at least another year, but three other multifamily projects are set to begin welcoming residents throughout 2017:

•Residents will begin moving into InterUrban Lofts at the southwest corner of 79th and Conser streets beginning April 29. Developed by Real Property Group LLC, InterUrban Lofts includes 41 residential units, 7,500-square feet of office space, and a 54-space parking garage.

•Completion is expected in August for Avenue 80, a five-story project being developed by EPC Real Estate Group LLC. Located at the southwest corner of 80th Street and Metcalf Avenue, Avenue 80 will offer 220 residential units, 10,000 square feet of office space, 7,000 square feet of retail, a courtyard and parking garage.

•Market Lofts, developed by Goehausen & Co. at northwest corner of 80th and Marty streets, is scheduled for completion in the late fall. It will offer 36 residential units, 5,700 square feet of retail space and two levels of parking.

In February, representatives from those projects participated in a panel discussion hosted by the Downtown Overland Park Partnership, discussing everything from the status of their projects to amenities and public parking in the area. The area's charm and character, unique shops and urban environment were among the draws.

"We're excited for the new foot traffic and to introduce this really one-of-a-kind area to so many new faces," said Kate Sweeten, executive director of the Downtown Overland Park Partnership. 

Public art including and other aesthetic improvements will encourage people to get out and explore what the downtown area has to offer. Such perks will complement the area's unique businesses that appeal to people with interests ranging from quilting and beading to culinary skills and home brewing, Sweeten said.

The development will benefit the city's farmer's market and the annual fall festival, Mayor Gerlach said. Time will tell whether future development will include bringing a grocery store back to the area, but with Barton's acquisition of a full square block downtown, there is renewed optimism 

"It would be great if there could be a small neighborhood specialty market in the area," Gerlach said.

Virgin Mobile speed dials summer opening for KC headquarters

Virgin Mobile USA’s new Downtown Kansas City headquarters is taking shape, with 42 employees hired and the buildout of its 11,000-square-foot office at One Kansas City Place fast-tracked for completion by this summer.

The British, no-contract mobile provider was purchased by Sprint in 2009 for almost $500 million and is in the process of consolidating its coastal offices into a US headquarters closer to its parent company. But Virgin Mobile is taking pains to ensure it keeps a separate brand and identity.

“We often say that Virgin Mobile has been a mobile phone company that happens to be called Virgin, but now we are going to be a Virgin company that just happens to sell mobile phones,” said Justin Scott, Virgin Mobile communications director. “We are really in touch with everyone in London as we set our culture and develop this office and brand. It was very important to be downtown in an entrepreneurial space surrounded by an innovative and creative culture.”

Virgin Mobile hired architecture and design firm Gastinger-Walker to transform a former law office into a collaborative, brand-specific, open work space on the 24th floor of Missouri's tallest skyscraper. Dark wood paneling and a long hallway of 12-by-12 offices are being replaced by glass walls, exposed ceilings, and table-style work stations.

“When you get off elevator right now, it feels like a bank or law firm from the 80’s with a lot of hunter green tile and dark wood,” Scott said. “When the office is finished, you will immediately see our entrance with a bright red arch and the Virgin logo and amazing views of Kansas City. To complete the theme, we've even ordered a red, London-style phone booth that will stand in our marketing area."

Beyond the entrance, a large, glassed-in conference room will anchor the headquarters, flanked by open seating work spaces, all with views for miles and miles. The east side will include eight-person work stations for the operations and Web teams, collaborative area with a work table, presentation screen, magnetic walls and marker board, all with decorative red accents. Nearby are the office’s only enclosed spaces, including a wellness room for breastfeeding moms or employees needing to nurse a headache-- along with conference rooms for private conference calls or conversations.

The office’s west side will be home to Virgin Mobile's marketing team, as well as its kitchen and community gathering space. Featuring a countertop with barstool seating overlooking Kansas City’s West Bottoms and the Kauffman Center for the Performing Arts, employees can pull up a barstool and have lunch or a quick coffee break at the counter. A butcher block-style island will double as a place to sit and have lunch or as a buffet area for events and gatherings. The space will include a flat-screen TV for entertainment, presentations or to catch a sporting event. 

“It’s just a great space. Virgin Mobile has a history with music, so we might host some small acoustic shows up here. And-- let’s say the Royals are playing or we are in the middle of March Madness, people can grab their laptops and watch the games while being productive.”

Virgin Mobile is hoping to be in its new office by summer; until then, dozens of employees are working from a temporary space on One Kansas City Place’s 8th floor. With notes and plans jotted onto white boards and the walls, the makeshift office has a decidedly upbeat, entrepreneurial vibe, which Scott says weaves well into the Virgin Mobile culture. 

Many of the new hires are from other industries and companies, including AMC Entertainment, Cerner, Garmin, H&R Block, Netsmart and even Chick-fil-A. Employees have relocated to Kansas City from Denver, St. Louis, Seattle, Toronto, and as far away as Manchester, England and India.

“None of our employees worked downtown prior to selecting our new location and they represent a diverse team of experts in their fields — most from outside the telecommunications industry, which was intentional,” said Dow Draper, Virgin Mobile CEO.  “We’re looking for pattern breakers and smart disruptors with restless start-up energy and ideas that will add real value to people’s lives through mobile products and services.”

Since July of 2016, Virgin Mobile has added 42 new employees and is on its way to hiring up to a total of 50 by the end of the year. Broader hiring plans call for a local workforce of 85-100 over the next five years as required by its $1.87 million incentives package offered through the Missouri Works program.

Positions at Virgin Mobile include a variety of customer service, mobile technology, digital marketing, branding, operations, logistics, finance, IT and engineering opportunities.

Five minutes with Ramin Cherafat, McCownGordon’s “on deck” CEO

Starting in 2018, Ramin Cherafat will take over as CEO of McCownGordon Construction. Pat McCown and Brett Gordon founded the Kansas City-based construction company in 1999, and after nearly two decades the company has grown to one of the region’s most prolific players, with projected 2017 revenue of $525 million. Cherafat started his career at McCownGordon 17 years ago when he joined the company as a project manager. MetroWireMedia caught up with Cherafat at the construction company’s downtown Kansas City office to find out more about where he plans to take the company and how he plans to get there.

MWM: What is your strategic vision for McCownGordon?

Cherafat: Our vision is to continue to focus on growth and opportunity for our associates, not only in the markets we currently serve but also additional markets in the future, so we will be looking at both vertical market expansion and geographic expansion.

McCownGordon has a long history and commitment to civic involvement in the communities we serve, and that won’t change. Moving forward we’ve got an incredible leadership team that will continue that commitment, and in many respects our community engagement can increase with the broader level of leadership within the firm. 

Additionally, we will continue to focus on growing market share in our current markets as well as regional growth and expansion. With more than a half billion in revenue this year and a backlog of close to $750 million, we have built a foundation that will enable us to grown more diversely.

MWM: When did McCownGordon begin talking about a succession plan?

Cherafat: The process started about 5-7 years ago. We started to invest heavily in the next generation of leaders.  We invested in training, development and leadership planning. We worked with executive coaches to deepen our bench to best position the company for growth. The highest profile outcome of that process was our transition to being an ESOP (Employee Stock Ownership Plan) in 2015. McCownGordon is now 100 percent employee owned, and we are very proud of that. About that same time we started focusing on the succession plan for McCownGordon’s next CEO and developing our leadership team. 

Our leadership team now is comprised of several people, and a majority of the team has been here well over 10 years. We have an incredibly strong and deep bench in terms of leadership, and we have organized the company the way we think will help sustain it for generations into the future.

MWM: Where do you see the company going both short-term and long-term?

Cherafat: McCownGordon is on an incredible trajectory; we all recognize that. We’ve been blessed with a very entrepreneurial culture, and we don’t want to see that erode as we grow. Keeping our culture strong, entrepreneurial and progressive is paramount to our future success. We have the right team in place to make sure we continue on that path.

In the short term, we want to continue to grow our market share in the greater Kansas City metro area, as well as the areas that our Manhattan, Kan. office serves. We also plan to add regional offices. We opened our first regional office about three years ago, and it’s doing very well, so growing the company regionally is definitely a goal. If I had to share a long-term vision, it would be to position McCownGordon for a national expansion.

MWM: Where do you see company fitting into the construction market?

Cherafat: I see us as leaders in the markets we serve and as a firm that is focused on trusting partnerships, being easy to work with and one that sincerely cares about doing the right thing.

We are very diverse. We have five major markets, including education, corporate office, health care, civic/philanthropic and science/technology.

We are working on some really amazing projects right now: A $200 million expansion for Garmin’s world headquarters; a $300 million public/private partnership for the University of Kansas; a $40 million logistics and distribution facility in Lenexa; and Cerner’s headquarters in Kansas City. We also have active projects in South Dakota and Oklahoma. And our Veloxity division, which focuses on Kansas City-area projects under $5 million, has annual revenue of close to $50 million. Veloxity helps us serve our ongoing repeat clients and helps us build relationships with new ones.

MWM: How did the Great Recession change the construction industry, and is the industry prepared to handle another downturn?

Cherafat: When the Great Recession hit, we saw that we had a choice: Either buckle up, tighten the purse strings and wish for the best -- or you can invest and prepare to emerge from it stronger because you know it is going to end and you want to be ready when it does.  We chose the latter option and invested heavily in our team during the recession.

We initiated our strategic plan at the beginning of the recession, and we set some lofty goals that we were able to achieve.  A year and a half into the recession, we quadrupled our training and development budget. We reinvested into our people and our team and we told ourselves, “Okay, we are going invest in our team and stick to our values and then, when the market turns around, that will catapult us forward.” And in many ways, that’s what has happened.

MWM: How is your leadership style different from your predecessors? What are you building on, and what might be a bit different?

Cherafat: I like to look into the future and work with the team on where we want the company to go, always thinking about where we need to be going. My biggest strength to the company is to work with the team on formulating a vision for the future and then work to drive and implement that vision to reality. I enjoy working with teams and empowering the next generation of leadership to help the company grow.

I am a big consensus builder. I like to have everyone around the table - perhaps to a fault. I want to make sure everybody has bought into what we are trying to do. Sometimes that takes quite a bit of persuasion, but I’m okay with that as long as we have consensus.

We have talked as a team about how leadership styles change as a company changes. Styles may change but values can’t, and that’s extremely important to our leadership team.

Being an entrepreneurial start-up company and being an entrepreneurial mature company are two different things and they require different types of leadership. The more we grow, the focus of leadership has to be more on empowering others. Being able to recognize the changing demands on leadership is why it has worked so well for McCownGordon over the last 17 years. We recognize that all of us bring different skill sets to the table. As we work to take this company to the next level, we are evaluating the skill sets of everyone at the table and making sure we have a balanced team.

MWM: What do you see ahead for McCownGordon?

Cherafat: One of our major goals moving forward is that we continue to live by the same set of values that we have always lived by since our inception. We have learned that people will hire and work with the people they trust, like and that are easy to work with. At our level of competition, it’s about working as a team with clients, designers, subcontractors and project partners. It’s relationship-based, trust-based and all about delivering value through the process.

What I tell the next generation of leaders in our company is while that our job is building structures, our business is building personal relationships. The construction part of the business is not the hardest part. The hardest part-- yet most rewarding-- is building strong and trusting relationships.

MWM: What do you see ahead for the construction industry in general?

Cherafat: The construction industry will continue to face issues with labor and management shortages. The best companies will have invested heavily into their people and team to ensure associate engagement.  In today’s market, it’s the company’s responsibility to ensure the best workplace environment and opportunities for their team. We will continue to focus on this moving forward to allow us to continue to attract and retain the best and the brightest in our industry.

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.