Reporter, Kansas City Business Journal
A massive biotech office park in south Kansas City long planned by James Stowers III is finally ready to move forward.
A pending land swap with the city will give Stowers the core of a 350-acre tract between U.S. Highway 71 and Interstate 435 and north of 87th Street. When developed, the project could include about 4 million square feet of office space, with a build-out cost estimated at $1.3 billion.
Stowers’ Oxford Cos. LLC will ask the city to rezone the area in coming months.
The “Oxford on the Blue” site came together through painstaking efforts by Cassidy Turley commercial real estate broker Whitney Kerr Sr. in a series of deals during the past several years totaling $3.4 million.
“My concept was to build another Corporate Woods,” said Kerr, one of the creators of the Overland Park office development 40 years ago.
He said the Oxford site is ideally located to reach the entire workforce of the Kansas City area — not just in the wealthier suburbs on both sides of the state line, but also in the urban core. And in the long term, discoveries at the Stowers Institute for Medical Research may attract pharmaceutical and other companies to set up space for research, drug development and clinical trials.
James Stowers III is a board member but not an executive of the Stowers Institute, which was founded and endowed by his parents, Jim and Virginia. He started his investment company, Oxford Creek Capital Management LLC, in 2008 after leaving American Century Investments, which his father also founded.
The development would be a boost for a long-depressed area.
“You’ve got two (sets of) visionaries that, together, control probably the largest bloc of urban land in the city,” said Tim Schaffer of RED Brokerage LLC, referring to Stowers and Cerner Corp. founders Cliff Illig and Neal Patterson, who control most of the former Bannister Mall site on the east side of I-435.
“Although things in that part of the city have been slow — and if you look at it today, it’s hard to envision what could be — given the ownership and their level of financial strength, I think there’s a very high level of credibility that whatever they do is going to be successful,” Schaffer said.
The area is one of the few developable spots along the I-435 corridor and has solid infrastructure in place, sandwiched between multiple freeways and in the path of a planned regional rail line, Schaffer said.
“They’re starting with a blank canvas in a very good location,” he said.
Not everyone readily sees office space in the heavily wooded site’s future.
“The market demographics over there point to more industrial development than probably office development,” said Ken Block, managing principal of Block Real Estate Services LLC. He added that development of the Bannister Mall site could be more competition than complement to the Stowers project.
Although the Stowers project may not attract standard office users initially, he said, “Clearly, if they have the internal demand to create a base of space with their own use and expansion of the Stowers Institute, that will certainly help put it on the map.”
Here’s how Kerr put together the pieces:
• First, he had to deal with the Jackson County Parks & Recreation Department, which wanted to preserve 65 acres, including the Blue River Glade on the north side of the site. Kerr worked out a trade that gave the county the land it wanted in exchange for two parcels that squared off the 350 acres for the office park.
• In 2007, Kerr helped Stowers buy a tract that Specialty Restaurants Corp. owned adjacent to property that the Kansas City Public Works Department and the Missouri Department of Transportation used as a service center.
• Kerr negotiated a land swap with the city — which bought MODOT’s property earlier this year — that will move the Public Works facility to property at 81st Street and Indiana Avenue next to the Stowers Institute’s affiliate, BioMed Valley Corp. That deal is expected to close within 60 days.
• Meanwhile, Oxford Acquisition LLC has bought and demolished 35 of the 39 houses near 86th Street and Drury Avenue. The company is in talks with owners of the four remaining houses.
Mike White, a development lawyer at White Goss Bowers March Schulte & Weisenfels PC, said Kerr’s patient approach was wise.
“Condemnation should be used only as a last resort,” he said. “You may get title quickly, but you won’t know the true cost until all litigation is exhausted, which takes years. That said, it would be impossible to redevelop large multitract parcels without having the tool at least available.”