Last Minute Sweetener Wins Council Approval for Waddell & Reed Downtown Headquarters

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The new Waddell & Reed tower is going up on the site of the former IBM Building, which is currently being demolished.

By Kevin Collison

After another last minute incentive compromise accompanied by the blessing of the school district, the Kansas City Council voted 8-4 Thursday to approve a plan that will bring the headquarters of Waddell & Reed and 1,000 well-paid employees to downtown.

“What we wanted to do is, we have a developer, we have a school district, we have an agreement that’s taken quite some time to get,” Mayor Quinton Lucas said.

“It took a lot for us to get here, that’s why I think the moment is right for us to be able to vote on this.”

In a late agreement endorsed by Mark Bedell, superintendent of the Kansas City Public School District, a property tax abatement for the project that originally was 15-years at 75 percent was reduced to six years at 75 percent and nine years at 37.5 percent.

That agreement reduced the city incentive package for the Waddell & Reed project from $44 million to about $24 million, according to Lucas, although that number had not yet been confirmed by city staff.

Regardless, it added at least $10 million in future tax revenues that schools and other taxing jurisdictions will receive from the $148 million project.

“We are grateful for Mayor Lucas, the City Council and those behind the scenes who ushered in good faith efforts to reduce the incentive package in favor of stronger support for our school system and city services,” Bedell said in a statement.

“We welcome Waddell & Reed to Kansas City.”

The attorney for the developers, a partnership between Burns & McDonnell and Financial Holding Corp., estimated the reduced incentive package will add about $3 per square foot to Waddell & Reed’s leasing cost, pushing it from the low $40s to the mid-$40s.

“Nothing is free,” said attorney David Frantze. “Waddell has agreed to pay more in operating costs that the original plan.

“We are pleased that throughout this process it became clear the city understood the value of this project to the community.”

Frantze said construction on the 18-story tower at the southwest corner of 14th and Baltimore near the Power & Light District should be underway by late winter/early spring  with completion expected in early 2022.

The planned headquarters of Waddell & Reed is at 1400 Baltimore near the Power & Light District and the South Loop. (Image from Google Maps)

The road to the Council’s approval of the Waddell & Reed redevelopment plan has been a rocky one.

The firm is relocating from Overland Park, but because the deal already was in the works, it sidestepped an economic Border War truce signed by the governors of Missouri and Kansas last summer.

The plan was fiercely criticized on the editorial page of The Kansas City Star and took lumps on social media for a preliminary design that showed its first 10 levels will be a 1,000-space garage with eight stories of office above.

The school district weighed in late in the process and lobbied city elected officials hard to reduce the incentive package. That prompted a last-minute amendment at last week’s Council meeting and a delay on the vote.

This week, what turned out to be an errant social media post that the project would not pay taxes to support the streetcar led to more turmoil as downtown landlords expressed concern it would set a bad precedent.

Councilman Eric Bunch, a champion of the streetcar and other alternative modes of transportation, assured the Council the project would begin paying its share of streetcar taxes after construction was completed.

And in recognition of the controversy over the project, the Council also authorized spending $10,000 to educate the public about the plan.

Still, opposing Council members were troubled by the rushed nature of the compromises that were introduced both at last week’s Council meeting and the one Thursday.

“I see a whole lot of problems for this for a lot of reasons,” said Councilwoman Heather Hall. “If we got to this deal just in the last 30 minutes, what could we get if we waited a bit longer and got a better deal?”

Council members Brandon Ellington and Melissa Robinson said the review process had been “disrespectful” of the school district and other taxing jurisdictions.

Lucas acknowledged “there are better ways, for better or worse.

“This happens in courtrooms around the country, it happens in legislatures,” he said. “Often a deal is made right before a certain thing.”

As part of the agreement, the Council also will require the garage at the project to be open to the public from 5 p.m. to 7 a.m. Mondays through Thursdays, and from 5 p.m. Friday and 7 a.m. on Monday. An undetermined parking fee is expected to be charged.

Council members approving the plan were Lucas, Bunch, Kevin O’Neill, Teresa Loar, Dan Fowler, Katheryn Shields, Andrea Bough and Lee Barnes. Opponents were Hall, Ellington, Robinson and Ryana Parks-Shaw. Councilman Kevin McManus was absent.

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5 COMMENTS

  1. “If we got to this deal just in the last 30 minutes, what could we get if we waited a bit longer and got a better deal?” This comment by councilwoman Hall, while I’m sure well-intentioned, demonstrates a fundamental misunderstanding of how business works.

    I’m really glad to see this go through! Especially with endorsement from KCPSD. 👍 I think people have been concerned that with the departure of Sly James and Troy Schulte, downtown’s momentum might be adversely affected. This approval assuages that a bit.

    Do we have renderings of the building yet?

  2. I agree the comments from the Councilwoman are, ponderous… The inclusion of parking into the deal will also have a positive impact particularly with weekend events at the convention center. Kudos to whomever thought to add that to the deal. This will be yet another roadblock removed to hopefully getting Barney Allis Plaza redone sometime this century. Thumbs up to the new Council for their work here.

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