Behind the Deal: ‘Speed to market’ tipped Terracon build-to-suit

Timing played a key role in Terracon’s decision to build its new $21 million corporate headquarters in Olathe rather than relocate to existing office space in the region. With 10 to 15 percent annual growth, the engineering consulting firm needed space to fit new employees that it expects to hire to accommodate burgeoning business.

John Coe of Copaken Brooks worked as Terracon’s corporate real estate advisor and says the company had a need for speed.

“We started in June of last year and did an exhaustive search of opportunities throughout the metro,” Coe said. “‘Speed to market’ would be one way to describe it.”

Terracon plans to be in its new 65,000-square foot, two-story headquarters in the first quarter of 2018, but getting to the deal's finish line took some rapid legwork on the part of the multiple parties.

The company began evaluating headquarters options in July 2016, looking at 11 existing buildings and 18 build-to-suit options in Kansas and four existing buildings and two build-to-suit options in Missouri.

By December, Terracon narrowed down its list to three existing properties-- two in Kansas and one in Missouri-- but ultimately determined its preference was to stay in Olathe, its headquarters home for more than decade. With no available existing buildings to accommodate the company’s growth, moving forward with a build-to-suit emerged as the preferred course of action.

“It was a long shot that a build-to-suit option would come through because timing was tight,” Coe said. “But VanTrust stepped up and proved they could work within that time frame.”

VanTrust Real Estate and Terracon wasted no time in requesting project incentives from the City of Olathe, which approved a 10-year, 65 percent property tax abatement, as well as industrial revenue bonds that allow for a sales tax exemption on construction-related materials.

Terracon won’t have to move far; its new headquarters will be in Corporate Ridge Office Park near Kansas Highway 10 and Ridgeview Road, just around the corner from its existing office at 18001 W. 106th.

“This investment represents the passionate commitment of our employee-owners to progress our growth," Terracon President Swaminathan Srinivasan said in a release. "Inspired by new surroundings, we will focus our future on serving clients in new, innovative ways and seeking out opportunities to make positive impacts on the communities where we live and work.”

The project’s development team includes property owner VanTrust, which will lead the design-build team, as well as McCownGordon Construction, general contractor.

Terracon provides environmental, facilities, geotechnical and materials services from more than 140 offices serving all 50 states.

Former Loehmann's Plaza site is Metcalf Avenue's next development domino

Rubberneckers may be trying to catch a glimpse of Metcalf South Mall’s demolition, but that’s not the only teardown taking place this spring along Metcalf Avenue in Overland Park. The old Loehmann’s Plaza shopping center is coming down to make way for The Promontory, a $98 million mixed-use redevelopment that at full buildout will include 430 residential units with an attached 550-space parking structure, and 130,000 square feet of retail space.

Launch Development Inc. is leading the project in partnership with Jim Harpool, Evergreen Real Estate Services, and Matt Dennis, R.H. Johnson Co. Located on the northeast corner of 91st Street and Metcalf Avenue, the first of 290 residential units and over 21,00 square feet of retail space at The Promontory is slated to open in November.

The Promontory is the next redevelopment domino to fall in the Metcalf Avenue corridor and aims to take advantage of its central location south of Downtown Overland Park where at least four mixed-use multifamily projects are in various phases of construction—and north of the former Metcalf South Mall, which is being torn down to make way for an $80 million retail project anchored by Lowe’s.

“The thing that is unique about The Promontory is that the residential and retail parking are totally separate and you can park in secured structured parking on the level that you live,” Harpool said. “I think this is a different model from anything we’ve seen in Kansas City.”

Existing parking in front of the retail portion of The Promontory will be re-paved, re-lit and landscaped, with a separate multilevel parking structure planned for residents. Harpool said reasons for separating retail and residential parking were twofold: “First, so retailers aren’t fighting with residents about parking, and secondly, so you can conveniently park on the level where you live and you don’t end up having to drag groceries in and up from the ground level.”

Developers hope to capitalize on its location near two ambitious cultural projects slated to open this spring: The Johnson County Arts & Heritage Center and the InterUrban ArtHouse.

Located at the site of the former King Louie bowling and skate center at 8788 Metcalf Ave., the Arts and Heritage Center will open May 8 and will be home to Theatre in the Park productions, the Johnson County Museum and other arts events. The InterUrban ArtHouse, 8001 Conser St., is a 10,000-square foot co-working space with a dozen shared studios designed exclusively for artists located in the former post office and plans a June 15 opening.

The Promontory's amenities include an on-site park with walking trail; rooftop terrace; and outdoor common spaces including fire pits, movie screen, pool, bar, and game area. Retail activity is underway, according to Harpool, with a 50,000-square foot anchor tenant opportunity available along 91st Street and Bo Lings set to re-open in its new space by the end of June.   

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.”

Interested in finding out more?  Click here to download the marketing flyer.

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.