Reflecting on Our Future: All Under one Roof SKCA Economic Development Summit James R. DeLisle, Ph.D. October 11, 2014 Avila University
Presentation Overview National Economic Scene Economy and Capital Markets Employment and Housing Social Entrepreneurship/Social Responsibility Kansas City Economic Scene Economics and Housing Transactions and Forecast Kansas City Development: Future Trends Range of Activity, Breadth of Market Challenges & Opportunities Thinking Bigger is Thinking Better An Collaborative Example of Future Engineering: A Co-Op Approach
WHO ARE YOU? WHO AM I? I AM NOT YOUR HOME RUN HITTER I AM YOUR CLOSER
Developer Panel John Sharp. Since before dirt Cerner Corporation Oxford on the Blue CenterPoint Intermodal Bannister Federal Complex CubeSmart Three Trails Industrial Park Burns and McDonnell Wendy Hill Bill Crandall Jim Cross Tanner Banion Mark Bryant NorthPoint Mike Talboy
Southeast Kansas City: The Future is Now Three Trails Oxford on the Blue Cerner 1.4msf 8-10 yrs 1,55-2,000 jobs 60% Mfg; $60000 Avg 3,000 15,000 emp. 290 Acres Innovation Campus Training, Health, Fitness, Retail $4.5 billion; $8m Schools; $2 m comm Oxford: 350 acres $1.2-$3b; $450/sf cost 20 years, 10,000 jobs 4 msf; mixed-use, village, housing Vision: Bio-Science, Tech PI s Collaborate, Commercialize Tenants: National, International
Bannister Federal Complex Intermodal Richards-GeBaur; Air Force Base Engineers, STEM, Skills, Logistics, Prof $1 billion to date; $800 m, GSA Bannister Federal Complex 300 acres; GSA move; redevelopment 500,000 sf bldg., re-use Burns and McDonnell Former K-mart 5615 E Bannister/Hillcrest 12 acres; Below Grade 60% to Climate Controlled PS 40% to retail (restaurant) Master Plan vs. Urban Red. Burns and McDonnell $110+ m rehab/expansion 2,100 new emp; tech & STEM 5-7 years; 2: 330,000 & 350,000 sf Heavy Landscaping; walking trail
Vision for South Kansas City Targeted Industries Business clusters Arts, STEM, Tech Real Estate Opportunities Ready to go, access opportunistic, logistics Economic Readiness Just-in-Time Employees, Housing, Infrastructure Entrepreneurship Small Business, Advance KC
Audience/Breakout Questions & Issues Tax incentives? TIF, Incentives Labor Force: Union Built? Pick GC, GC picks team What workforce? STEM With all development, help for minority hiring Yes, contractors, mentor Housing Need for entry level, mid-tear College education; $100k debt Is there another path?
ECONOMIC AND KANSAS CITY OVERVIEW
Rates (%) Retail Sales ($ millsions UM Consumer Confidence Index Levels Duration of Unemployment (mo.) Duration of Unemployment (weeks) National Economy Domestic Stock Market Indices * 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 Interest Rates: Treasuries, Bonds and Federal Funds 10.0 9.0 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 NASDAQ S&P 100 DJIA DJ Transportation DJ Utility DJ Composite * Closing Values Sources: Lewis White Real Estate Center, Economagic 5-Yr Treasuries Moody's Aaa Corp Bonds Federal Funds Rate 10-Yr Treasuries Moody's Baa Corp. Consumer Confidence and Retail Sales $190,000 $185,000 $180,000 $175,000 $170,000 $165,000 $160,000 $155,000 $150,000 $145,000 $140,000 Duration of Unemployment & Labor Force Participation 45.0 40.0 35.0 30.0 25.0 20.0 15.0 10.0 5.0 0.0 Duration of Unemployment Sources: Lewis White Real Estate Center, US Department of Labor Retail Sales Consumer Confidence Labor Force Participation Rate 120.0 110.0 100.0 90.0 80.0 70.0 60.0 50.0 40.0 30.0 20.0 Sources: Lewis White Real Estate Center, Thomson Reuters & Department of Commerce 68.0 67.0 66.0 65.0 64.0 63.0 62.0 61.0 60.0 Sources: Lewis White Real Estate Center, Federal Reserve Institutional Real Estate Returns
Private Employment (000s) Government Employment (00s) Unemplyment Rate (%) KC Economic Scene: By State (Bi-State) State Comparisons Private vs. Public Employment Unemployment Rate: KC MSA by State Portion Employment Growth: Kansas City MSA Kansas KC MSA Missouri KC MSA KC MSA All 12 per. Mov. Avg. (KC MSA All) Private Employment Government Employment 12 12 per. Mov. Avg. (Private Employment) 12 per. Mov. Avg. (Government Employment) 900 300 10 850 800 750 700 650 600 250 200 150 100 50 0 8 6 4 2 0 Sources: Lewis White Real Estate Center, Economagic, BLS Sources: Lewis White Real Estate Center, Economagic, Bureau of Labor Statistics Single Family Permits: Kansas vs. Missouri Multi-Family Permits: Kansas vs. Missouri
KC Housing Scene Average Prices for Existing Houses by County $500,000 Average Prices for New Houses by County $500,000 New $324,079 $450,000 $400,000 $350,000 Existing $168,673 $450,000 $400,000 $350,000 Average $324.079 $300,000 $250,000 $200,000 Average $169,673 $300,000 $250,000 $200,000 $150,000 $150,000 $100,000 $100,000 $50,000 $50,000 $- $- April May Jun-14 Jun-13 April May Jun-14 Jun-13 Data Keyed from Online Publications Sources: Lewis White Real Estate Center, Kansas City Regional Association of Realtors Data Keyed from Online Publications Sources: Lewis White Real Estate Center, Kansas City Regional Association of Realtors Single Family vs. Multifamily
KC Commercial Real Estate Private Institutional Holdings KC vs. NPI All Total Returns Cap Rates: Self-Report Kansas City Cap Rates: National Market Cap Rates 12% 11% 10% 9% 8% 7% 6% 5% 4% Current Outlook in 3-yrs Current Outlook in 3-yrs 12% Higher Yields 11% in KC 9.7% 9.9% 10.0% 10% 9.6% 8.5% 9% 8.5% 8.1% 7.9% 8% 7.1% 6.9% 6.6% 6.7% 7% 6.2% 6.3% 6.3% 6% 5.7% 5% 4% Trophy Core Non-Institutional Distressed Trophy Core Non-Institutional Distressed Sources: Lewis White Real Estate Center; JR DeLisle Survey-Feb 2014 Sources: Lewis White Real Estate Center; JR DeLisle Survey-Feb 2014 Sources: Lewis White Real Estate Center, NCREIF
KC Forecast: External View Private Institutional Holdings Sources: Lewis White Real Estate Center, NCREIF
Major Projects in Southeast KCMO: The Future
Suburban Real Estate Projects Source: MetroWireMedia.com
Urban/REfill Source: MetroWireMedia.com
Reflecting on KCs Future Futuring vs. Pasting: Lessons Learned
Mayor s Issues & Answers Bring money in from outside Import $s or tax ourselves Balance our budget Critical Need for infrastructure Deferred and critical Transit Bus, streetcar, bicycle Street v. Transit 1/3 of KC covered with streets Incentives Gradually tighten, phase Entrepreneurship Need to train, nurture, incubate, launch pad
Kansas City: Future Issues Source: MetroWireMedia.com
THE CO-OP: A COLLABORATIVE APPROACH AS A MODEL
The Co-Op Connections
Neighborhood Transformation: The Co-Op s Approach Adding Neighborhood Development to the Continuum Emergency Relief + Individual Betterment Neighborhood Development = A Place to Stay
Neighborhood Specification Wendell Phillips Hickman Mills
Neighborhood Comparisons Race/Origin Income Educational Attainment
What we mean by Community Development The phrase Community Development is used to mean many things. To the Co-Op it means bringing together a set of four vital components necessary for holistic neighborhood revitalization. Customized solutions to optimize success. Housing Transitional Housing Project Chaplaincy Good Neighbors Mixed-Income Development Economic Development Economic opportunity Jobs Training Business Builder Angel Investing Education Schools + Churches Partnerships Opportunities to volunteer with Students Health & Wellness Collaboration Facilitating Collective Impact among Service Providers & Churches Collaborating to increase access and utilization
What it Means We re gonna need a bigger roof!
Key Evaluative Criteria for Biotech/Research Parks State share 250 acre +
SETTING THE AGENDA: SOUTH KANSAS CITY ALLIANCE
Importance Very Low Very High Kansas City Scorecard: Setup Very Weak Red Zone Performance Very Strong On the Money Who Cares? Overachiever
Importance Very Low Very High Kansas City Scorecard Very Weak Performance Very Strong Red Zone On the Money Who Cares? Overachiever
The Future is Now
Presentation Review National Economic Scene Economy and Capital Markets Employment and Housing Social Entrepreneurship/Social Responsibility Kansas City Economic Scene Economics and Housing Transactions and Forecast Kansas City Development: Future Trends Range of Activity, Breadth of Market Challenges & Opportunities Thinking Bigger is Thinking Better An Collaborative Example of Future Engineering: A Co-Op Approach