MWM Industrial Summit signals continued strong market

A panel of leading Kansas City commercial real estate developers, builders and municipal leaders shared insight into the region's booming industrial market at MetroWireMedia's 2017 Industrial Summit on Friday, Aug. 25 at Blue Hills Country Club. 

Here's a snapshot of industry insight from our panelists:

“We are seeing about 60 percent of users come from outside the Kansas City area, and we are on pace to deliver over 10 million square feet this year."  -Kevin Wilkerson, JLL

“The supply side of industrial development has been somewhat disciplined. Demand has not outpaced supply at all, so we expect it will continue in a healthy fashion.” -Mark Long, Newmark Grubb Zimmer

“Kansas City companies can reach 90 percent of the U.S. in two days' shipping, so a company that years ago believed they needed to be near population densities on the east or west coast can reach 90 percent of their customers right here.” -Mike Bell, Hunt Midwest

“We are seeing more 'small boxes' that are appealing to tenants who want to be in their own space and not have to share a building, or they are a 60,000 to 80,000 square foot tenant and it appeals to them to have a right of first refusal and be in their own space and growing.” -Sam Stahnke, ARCO Construction

“From a long-term perspective, Kansas City has now reached a new level within the country as a major destination for e-commerce distribution, and that’s not going to change. The growth is going to continue for some time.” -Whitney Kerr, Jr., Cushman & Wakefield

“We are looking for opportunities where there is going to be a significant incentive to do business in Kansas City. We aren’t trying to create winners and losers amongst you all; we are trying to create winners for all of you within our Port District.” -Michael Collins, Port KC

“One of the challenges for local government, especially a government as small as Edgerton, is to be aware of what all levels of government are doing and how that might impact our ability to provide attractive incentives. Edgerton is certainly looking for opportunities to be creative and to have incentives that look different from other areas of the country.” -Beth Linn, Edgerton City Administrator

"MetroWireMedia has assembled a group of Kansas City commercial real estate leaders who are at the top of their game in what is without question the strongest industrial real estate market in recent Kansas City history. I look forward to leading the discussion as we hear about best practices for sustaining the momentum in the current red-hot market." -Chris Gutierrez, KC SmartPort

Want more insider scoop? Mark your calendars for MetroWireMedia's 2017 Multi-Family Summit on Oct. 12. Contact Lisa Shackelford for sponsorship information. 

Check out our slideshow below, or head to our Facebook page and tag yourself in the event photos. 

KCP&L offers energy incentives for industrial projects

Industrial users could be missing out on tens of thousands of dollars in potential cost savings available through KCP&L's energy efficiency programs. That was the message from the utility to attendees at MetroWireMedia's 2017 Industrial Summit on August 25th. 

"The industrial sector of the economy provides the most number of opportunities for partnerships between KCP&L and you or your clients," KCP&L Economic Development Manager John Engelmann told attendees. "These will provide a more compelling business case for the site or building you are marketing to your clients."

Medium to large-sized manufacturing, warehouse and distribution projects may also qualify for KCP&L's Economic Development Rider Tariff, which provides a discounted rate over a five-year period and equates to approximately one years' worth of energy costs. To qualify, projects must have a separately metered load of 200KW, a multiple shift operation and incentives from the city of state in which the building is located. 

"These incentives must be applied for prior to any public announcement by the client, so the key to any successful partnership is to include KCP&L's Economic Development Team early in the process so we can make sure your clients can qualify,"  Engelmann said.  

In addition, KCP&L has an Energy Efficiency Team dedicated to working with Missouri customers, builders and developers to obtain rebates for the purchase of higher efficiency products such as lighting, HVAC, controls, drives/pumps or process items. 

Energy Efficiency Rebates are capped at up to $500,000 per customer per year and are available for everything from standard solutions such as simple lighting upgrades to customized needs for larger retrofits or new construction projects. 

A full list of requirements and programs can be found at KCPLED.com. 

Earth-moving moment in Lee's Summit as industrial spec moves ahead

For Lee's Summit development leaders, seeing industrial spec inventory come out of the ground has often felt akin to moving mountains. That's why seeing dirt finally move at The Grove at Lee's Summit mixed-use site near M-291 and Bailey Road on the south side of the city is so gratifying.

"The Grove will allow Lee's Summit to finally 'get in the game' and compete for industrial relocation and expansion projects," said Rick McDowell, Lee's Summit Economic Development Council president. "Lee's Summit has not even been able to submit proposals for dozens of projects through the years simply because the city lacked viable industrial buildings."

The project's timing is just right, according to Mark Long, executive managing director of Newmark Grubb Zimmer: "The Grove is coming to the market at the same time as some key infrastructure improvements including the Bailey Road overpass and more importantly the new interchange at Highway 50 and M-291. There is a lack of available Class A product in the area, and this project will fill that gap in supply."

On Friday, local dignitaries, city staff and project partners took their shovels to the dirt, signaling the beginning of land clearance for infrastructure to support construction of The Grove's first building, a 200,000 square spec industrial facility. 

"We are excited about beginning this new chapter of development in the city of Lee's Summit. The Grove will be the premiere mixed use destination for people to work, shop and play for years to come. We are grateful to the mayor, city council, city staff and the LSEDC for supporting our vision for the future," said Steve Singh, CEO and managing partner of The Grove.

The mixed-use development will include an additional 200,000 square feet of light industrial space, as well as the donation of property to the City of Lee’s Summit for a future fire station. With an upscale design loosely based upon successful, world-class properties like The Grove at LA and Santana Row in San Jose, California, The Grove promises to transform Lee’s Summit's southern gateway.

Project partners include A.L. Huber, general contractor; BHC Rhodes, civil engineering services; Klover Architects, architectural design, Newmark Grubb Zimmer, real estate broker, and White Goss, legal services.

For more information about The Grove, contact Daren Fristoe, project manager. 

Wanted in Edgerton: Restaurant and residential development

With almost 11 million square feet of industrial space under construction and 3,400 new jobs created in three years, the City of Edgerton is scrambling to attract retail, restaurant and residential development activity.

“Our projects went extremely fast. The amount of traffic and number of employees we are seeing here and the desire to have amenities and housing options nearby just continues to increase,” said Edgerton Mayor Don Roberts.

NorthPoint Development’s Logistics Park Kansas City in Edgerton is among the most successful industrial park buildouts in the nation in recent memory, both in terms of total square footage and speed to market. But attracting and building ancillary development to support the burgeoning workforce has a longer runway, and that’s one reason the city launched its own economic development partnership, ElevateEdgerton!, earlier this year.

“There is a lot of development happening in the KC area right now, and we are trying to compete with other more established areas and trying to get people to come to Edgerton,” said Edgerton City Administrator Beth Linn. “Once people are at (LPKC), it sells itself, but getting them here can be a challenge because we are kind of an unknown in the market.”

The basic message ElevateEdgerton! wants to send is that the market is ripe and ready for additional investment beyond industrial warehouse and distribution projects. The influx of thousands of new Amazon and UPS workers requiring places to eat and spend money before, during and after their workdays has changed the conversation.

“We have the numbers, and we have to bring these other sectors,” Roberts said. “Two years ago, things were different, but a fast service restaurant will make it in Edgerton today.”

Russell Pearson with NAI Heartland is on the team marketing the Midwest Gateway speculative industrial project in Edgerton and agrees that the time is right for more development: "The industrial growth in Edgerton has been dramatic in the past few years, and this creates a real opportunity for developers to deliver commercial and residential product to support the employee base in that area.”

In addition to restaurant and residential housing, the city is working to attract a large, full-service truck stop to accommodate commercial vehicles and possibly provide additional quick service dining. Roberts believes that a dramatic rise in traffic counts over the past three years will help make the case.

“Homestead Lane wasn't even open 3 ½ years ago. To go from 0 to 10,000 vehicles a day is unheard of,” Roberts said.

Interested developers should contact Steve Hale at ElevateEdgerton! to identify top sites.

Five minutes with new SKW President Brian Johanning

In July, Shafer, Kline & Warren announced that Brian Johanning would step in to lead the firm’s infrastructure and development business, replacing Larry Graham. The promotion is the culmination of a leadership succession plan two years in the making. MWM caught up with Johanning recently to find out more about his strategy for SKW’s future success.

MWM: What are your immediate goals?

Johanning: Right now, we are trying to build on a company that has a 67-year old foundation here in Kansas City-- with roots and survey records going back to the late 1800s-- and trying to maintain that strong brand while injecting a startup mentality back into the business and really trying to drive an entrepreneurial, performance based culture.

MWM: Clearly, SKW has a strong market presence and history. How do you preserve that while innovating growth?

Johanning: The leadership of old certainly was cognizant of the myriad of risks out there in the marketplace but their propensity to talk about it and be transparent about those risk analytics was a bit more reserved. In today’s world where information flows so quickly and freely, you have to be willing to “coach your people up” beyond the contract. We have partners who are dynamic, and at the end of the day it boils down to building good, solid relationships bonded in trust. That trust comes when the walls to difficult conversations come down, so we have to think strategically to soften some of those barriers.

MWM: SKW is mid-sized engineering firm. What are the advantages and disadvantages to that?

Johanning: It can be a tough spot, but it’s also fun to figure out your strategy. Some of the biggest engineering companies in the world are here in KC. Sometimes you’re going up against them and other days it’s a survey guy working out of the back of his pickup truck, and you find a way to compete accordingly. So we are trying to share more value, and that isn’t always about price; sometimes it is about expertise and local experience. Larry Graham, Tom Smith and others who have been here 45 plus years are walking CRMs. You can walk up to them and ask about any intersection in town and they have a story about it and probably have a record about it. The competition can’t say that. Having that walking encyclopedia down the hall is so valuable. 

MWM: As you work to grow SKW, what kind of team will you be building?   

Johanning: We see the market shifting to more integrated project delivery and where the entire project team is brought together sooner, if you will. Having talent that can support multiple business units is highly desirable. The utility player is sometimes looked at as a commodity, but Ben Zobrist changed that for the Royals, so for us it is about finding people like that who are capable of tackling different projects. On almost every land development project there’s a public component—whether it’s sewer line or land change or water main—so being able to straddle that fence and represent all the stakeholders is really important, and that’s what we are looking at going forward.

MWM: How will you use your business development background to grow SKW?

Johanning: The most effective business business development tool in the world is doing good work. I feel like the rainmaker of the next 21st century is the person who can attract the most skilled and entrepreneurial talent because if those folks come to an organization and focus on delivering a quality product, there’s no better business development tool than that.