City Beat: BKD headquarters gets green light

On June 30, Springfield City Council approved the development agreement between four parties: Hammons, Opus Northwest, BKD and the city.

Under its complex terms, Hammons has agreed to sell part of the University Plaza parking lot at St. Louis Street and John Q. Hammons Parkway to Opus, which will build a stand-alone facility to house BKD’s headquarters as well as other possible business tenants, though none have been identified. BKD currently leases seven floors in Hammons Tower across the street.

Hammons also has agreed to pay $7 million for the Jordan Valley Car Park, as well as the vacant site between the car park and the Expo Center, next to Hammons Tower on St. Louis Street. BKD will lease space in the car park when its corporate headquarters is finished.

The biggest difference between the development’s term sheet that was approved in October 2007 and the finalized agreement is the timetable. The deadline for the property’s sale has been pushed back to Oct. 31 from July 31, and the deadline for commencement of construction has moved to Dec. 31 from Sept. 30. Opus is still required to complete construction within 16 months of the start date.

City Economic Development Director Mary Lilly Smith said the delay in finalizing the agreement was due to parking agreement details that had to be worked out. Namely, the city, Hammons and Opus had to agree on when Hammons would assume the city’s parking contract obligations and how that date would compare to the beginning of construction on the Opus development, Smith said.

Also included in the agreement is 100 percent incremental property tax abatement for the first 10 years, followed by 50 percent abatement for the next 15 years. If Opus builds the headquarters to Leadership in Energy and Environmental Design Silver standards, the developer would receive an additional 25 percent abatement.

Mayor Tom Carlson said that while it is good to question any potential tax abatement, the overall value of the deal far outweighs any potential loss of tax revenue.

“What we’re going to do is wipe out the debt we have on the car park and sell the land,” he said. “In the end, the question is whether you think the price you’re getting is fair for what you have to sell. I think we’re all in unanimous agreement that this whole deal means a lot to the community.”

Greg Williams, Springfield Area Chamber of Commerce senior vice president for economic development, underscored the need to keep companies such as BKD in Springfield.

He pointed to the March announcement that Willow Brook Foods’ new owner, Cargill Value Added Meats, will close its Springfield facilities and lay off nearly 800 workers by the end of summer, as well as the 1991 closing of the Zenith manufacturing facility that put 1,500 out of work.

“We can get a little arrogant and think, ‘Zenith won’t close. Willow Brook won’t close. Those companies will always be here to employ our people.’” Williams said. “We’re maintaining and retaining significant unbelievable payroll in center city Springfield with BKD’s presence.” BKD has approximately employs about 270 in Springfield.

After a unanimous vote to approve the agreement, Carlson spoke for many of the city staff with his closing statement to developer Opus: “Now, just go build the darn thing.”

Green incentives

Council also considered a new tax abatement option for business development.

The proposal would give a 25 percent incremental property tax abatement to businesses that build a new facility or expand an existing facility in an Enhanced Enterprise Zone, if the new facilities meet LEED Silver standards.

To qualify, a business would have to have 50 or more full-time jobs or be focused on manufacturing, mining, warehouse and distribution, wholesale trade, or processing material recovery.

The incentive idea is based on the Opus development agreement; the Enhanced Enterprise Zone Board passed a resolution in April requesting that a similar incentive option be available for all EEZ businesses.

Opus plans to work toward LEED Silver certification in Springfield, according to David Harrison, general manager of Opus’ Kansas City office. He noted that the company has 153 LEED-accredited employees and 23 million square feet of space approved or under review for LEED accreditation.

“For a city to be proactive and say, ‘We’re going to be sustainable and use it to attract development,’ I think you’re ahead of your time,” Harrison told council. “Ten years from now, everyone will be scampering to be sustainable.”

City Senior Planner Matt Schaefer said since the abatement program would be the first of its kind in the state, it could offer the city a competitive advantage in luring new business to the city – a point echoed by Carlson.

“We want to have our community considered a progressive community, because the communities that are considered that way draw the best jobs,” he said. “When people have the United States to choose from, they’re going to the communities that are doing these kinds of programs.”

Schaefer said the Enterprise Zone program has created 7,500 jobs in Springfield and led to more than $550 million in business investment since its inception in 1984.[[In-content Ad]]