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Backers see KC's Keystone District as catalyst for new jobs, innovation

Published Kansas City Business Journal on February 8, 2019

The Kansas City Area Transportation Authority didn't want another traditional real estate transaction for its 2-acre site in the 18th & Vine Jazz District — it wanted a transformational project that would build on development already humming along Troost Avenue and the surrounding area.

So the pitch for the Keystone District caught its attention: The innovation district aims to unite a variety of stakeholders — higher education institutions, corporations, resource organizations and entrepreneurs on one campus — to bring density and scale to innovation and entrepreneurship. In addition to office and coworking space, the district would include educational programming, accelerators and incubators, mixed-income housing and amenities that could include restaurants and event space. 

"In our RFP, we said we do not want a simple real estate transaction," said Brien Starner, the KCATA's director of economic development. "There are lots of people we could sell this real estate to. That was not our goal. Our goal was to be catalytic and have a development that could have multiple levels of impact." 

So KCATA signed a predevelopment agreement with JE Dunn Construction that includes aspects such as property surveys, title work, appraisals and determining the feasibility of the project. Within six months, KCATA wants to see proof that the project has the financing and other resources to move forward before it signs a development agreement because it doesn't want to tie up land in a project that can't come to fruition in a timely manner. The site is the block bounded by 17th and 18th streets, from Troost to Forest avenues.

Partnering with KCATA

Former Pinsight Media CEO Kevin McGinnis is spearheading the innovation district efforts through his newly formed nonprofit, Keystone Community Corp. He turned to JE Dunn to lead the district's construction and to be a tenant. For JE Dunn, the project is a natural fit that plays into its strengths of building innovation labs and tech-based spaces nationwide, said Michael Collins, a vice president at JE Dunn. 

The Kansas City-based construction company plans to have a presence on the campus once it's built and is considering adding a fabrication/maker space for use by it and potentially other tenants. 

"It's really about communities, entities, corporations and everyone wanting to think in the 21st century and think about innovation and how it impacts and disrupts their core business," Collins said. "We really want to be a part of that."  

For KCATA, the proposed district helps it reflect on what the future of transportation looks like. 

"Public transportation has not been a fundamental driver for growth and development considerations or value-add when people look at building an office building or an industrial park, but that's all changing," Sterner said. 

Lifestyle choices are shifting, he said, and more people desire smaller apartments and want to spend more time in the community as opposed to staying at home. Sterner envisions the 18th Street corridor becoming a testing ground for autonomous vehicles in the near future and a place to enhance transportation options and engage new partners. It's an area that's ripe with potential for residents to forgo having a car and instead depend on a mix of public and private transportation. 

For McGinnis, having KCATA as a strategic partner focused on transportation's future is instrumental in making the project more effective. 

"To me, that's the most exciting part of this," he said. 

Innovation districts have to be transit accessible and be part of a transit-oriented development initiative, McGinnis said. 

"Kansas City has such an opportunity in the transportation space, partially because of our central location and also because of the structure of the Kansas City region and the huge footprint that we have to deal with. They're a great partner for that," he said. 

Making an impact in Kansas City

The project is akin to connecting the dots — but on steroids, said Darcy Howe, managing director of KCRise Fund.

Keystone could help Kansas City address areas where it has fallen behind its peer cities, including the amount of collaboration and connectivity among corporations and entrepreneurs, she said. 

KCRise Fund's role is to raise awareness for the project and house its portfolio companies on site, as well as potentially host a "just in time" accelerator program at Keystone. Its portfolio companies could be among the key groups to take advantage of Keystone's variety of programming. 

Collins said it presents a unique opportunity to unite innovative minds in Kansas City's top industries in one ecosystem, where they could collaborate and spark ideas to make one another's companies better. 

In St. Louis, McGinnis said, the Cortex Innovation Community has planted roots in the urban core, creating a widespread affect. Nearly 400 businesses are in the Cortex, which has created about 5,700 jobs. 

Sterner also thinks the Keystone project could be a job growth driver and help KCATA fulfill its mission of connecting people to opportunities. The district creates a well-rounded experience that makes Kansas City an even more attractive place to live, work and play and could play an integral role in helping area companies attract and retain talent, he said. Plus, the district's myriad stakeholders and focus areas would lead to "real-time, market-based impact." 

McGinnis thinks Kansas City could see success similar to Cortex, including new jobs and businesses.

"From a tax revenue perspective, they took an underdeveloped part of St. Louis and created a foundation for there to be revenue growth for the city," he said. "I think we have the same opportunity."

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