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GETTING ITS DUE

Retailers finally migrate to the Kansas side of Kansas City

BY DEBRA HAZEL

Long regarded as the “other half” in this city that spans the states of Kansas and Missouri, the Kansas side was the place where people lived, rather than shopped or played, while the Missouri side had all the offices and the retail — including the historic Country Club Plaza, widely regarded as the first shopping center in the United States.

But the city is now gaining some equilibrium, thanks to a stable and diverse economy. And leading the way on the Kansas side is The Legends (below), a retail and entertainment center under construction by lifestyle builder RED Development. Kansas-side residents “now have amenities they never had before,” said Dan Lowe, a partner at RED, which has offices in Kansas City, Mo., and Scottsdale, Ariz.

The 750,000-square-foot lifestyle center is the result of nearly a decade of government efforts on the Kansas side to boost the economy of the city and some of its suburbs. Officials passed legislation to draw tourism to the Kansas side of the market through the use of sales tax revenue bonds, state subsidies that finance construction and are repaid through a portion of the taxes generated by retail sales. To qualify for these bonds, a project must contain retail. The Kansas state legislature passed bond legislation in 1999 specifically to fund development of the Kansas Speedway, a NASCAR racing venue that celebrates its fifth anniversary this year, and Village West, a retail-entertainment district next to the track at the intersection of interstates 70 and 435 that will be home to the Legends.

RED became involved in the development in 2000.

“This project is unique for us,” Lowe said. “It is our first real venture into destination retail.” The firm’s centers in the past have been those catering just to the local community.

Village West also contains a Cabela’s and a Nebraska Furniture Mart, both of which opened in 2003. Together the two drew 10 million visitors last year. Village West is also fomenting substantial economic development further afield.

“This serves as an opportunity for our community to move forward in the metro area,” said Dennis Hays, county administrator for the Unified Government, which represents the Kansas side of the city and some nearby communities. “It literally turned our community around. We were not a destination. We had very modest retail in our community.”

Now with Wal-Mart and Home Depot, among others, expanding throughout the metro area, it is shedding some of that modesty.

“The retail sector continued to be a bright spot in Kansas City throughout 2004, and forecasts anticipate continued growth in 2005,” said a 2005 report by NAI Global, a Princeton, N.J.-based commercial real estate services firm. Big-box retailers continue to open in the region, and lifestyle centers are now the focus of development.”

In addition to the Legends, RED is building the 357,000-square-foot Cornerstone at Leawood (Kan.), south of the city. Cornerstone will contain 268,000 square feet of retail and 89,000 square feet of office space and is scheduled to open next spring.

Country Club Plaza anchor Saks Fifth Avenue closed in mid-February. At press time Kansas City, Mo.-based owner Highwoods Properties was in negotiations to refill the space.

“We’re certainly considering a fashion anchor,” said Gayle Terry, Highwoods’ marketing director. “But we’re also thinking about home furnishings.”

Existing centers are in expansion mode too. In the fall Steiner + Associates plans to start the 550,000-square-foot second phase of Zona Rosa, in the northwest part of town on the Missouri side. The first phase, which contained 600,000 square feet of retail, restaurants, homes and offices, opened last May. This second phase will consist of 100,000 square feet each of office and residential, seated above 150,000 square feet of specialty retail. A 200,000-square-foot department store is in the plans too, though none had been named at press time. The opening is set for the spring of 2007.

Meanwhile, the Legends tenant mix is designed to appeal to people within a 250-mile radius, the same people who will be visiting the Speedway. There will be local retail tenants, such as Casual Corner, in addition to a major entertainment component. In fact, about one-third of the center is dedicated to food and entertainment, including Dave & Buster’s (its first unit in Kansas), Ted’s Montana Grill and T-Rex. Among the varied retail names: Cavender’s, a Western apparel chain, Linens ’n Things and Off Broadway Shoe Warehouse. “It’s turning out to be a most eclectic mix,” Lowe said.

For many of these, this represents a debut in the city, and for some, in the state.

“It’s looking to be a pretty vibrant project,” said Bryan Spain, a Dave & Buster’s vice president. Dave & Buster’s had wanted to enter Kansas City for years, but did not find the right project until the Legends came along. “We’re a destination-type restaurant,” Spain said. “The opportunity finally presented itself.”

The open-air center will be built around a central courtyard. Famous Kansas figures, including Wilt Chamberlain and former Sen. Robert Dole, will be honored in the development. The Legends is set to open next May. RED executives say they expect sales of more than $500 per square foot, including the food areas.

“It is the most challenging project our company has ever worked on,” Lowe said. “There was no retail market here.” There is now.