KC Southern Buying Property for Likely Headquarters Expansion

By Kevin Collison

Kansas City Southern is partnering with Americo to redevelop city-owned property at 12th and Broadway for what likely will be a mixed-use project that includes an expanded headquarters for the firm which is being acquired by Canadian Pacific.

City Manager Brian Platt has submitted a development agreement to the City Council in response to a request for proposals issued last fall. It calls for the city to sell what’s now parking lots at 1200 and 1210 Broadway next to KC Southern’s offices.

“Moving forward with a project to turn a 1.1 acre surface parking lot downtown into two high rise towers with hundreds of apartments, affordable housing, retail, and office space for KC Southern,” Platt stated on social media, providing additional details.

The city manager added that an existing underutilized, 975-space, five-level underground garage built to serve the KC Southern headquarters will provide parking.

The proposed towers are expected to be about 12-stories for the residential, 10 stories for the offices.

The agreement calls for the city-owned properties to be bought and redeveloped by Kansas City Southern and Americo.

Americo is affiliated with Financial Holding Corp., an umbrella venture controlled by the Merriman family, one of Kansas City’s most influential, but low-profile, business leaders.

Financial Holding recently co-developed the new 18-story office building at 14th and Baltimore where Blue Cross Blue Shield will relocate its headquarters.

Last fall, Platt told CityScene the property at 12th and Broadway was a “tremendous” site for high-density, mixed-used development.

“It could be office space, residential…the zoning already is in place,” he said then. “We’d also consider a higher density and height there.”

The city had issued a request for proposals for property along Broadway across from Bartle Hall. The KC Southern headquarters is at the upper left at 12th and Washington. (Map from City of KC)

In April, Platt told CityScene KC the city had been in discussions with Kansas City Southern about a partnership developing the property currently used as a parking lot. It’s located southwest of 12th and Broadway across from Bartle Hall.

“We have a good working relationship with them,” Platt said then.

“They want to expand. We own some property, that parking lot, they own some property. We’ve had conversations about partnerships and collaborations there.”

Officials at Kansas City Southern and Platt could not be reached immediately for comment.

The timing of the proposed sale of the property came a day after federal regulators approved the $31 billion merger of KC Southern and Canadian Pacific into a new entity called Canadian Pacific Kansas City.

The new railroad will be the first North American carrier spanning the United States, Canada and Mexico. Canadian Pacific is expected to officially take control in mid-April.

As part of the plan, the U.S. headquarters of the expanded railroad will be shifted from Minneapolis to Kansas City. There are about 200 employees at the Minneapolis headquarters although the firm has not identified how many would be transferred.

In an email last spring, Warren Erdman, Kansas City Southern executive vice president, said Kansas City Southern was interested in the future of the city-owned property next door.

Kanas City Southern’s headquarters opened in 2002 at 12th and Washington. (Photo from BNIM architecture)

“We are looking at our options and have not decided at this time how we might participate in the RFP, but as I’ve testified previously, we certainly have interest in what might be developed next to our corporate headquarters,” he said.

Kansas City Southern opened its current six-story headquarters at the southeast corner of 12th and Washington in 2002. It was designed by BNIM architects, and the architectural firm’s webpage said a second building is envisioned for the property to the east.

Should the railroad expand its headquarters, it would be an encouraging signal from the private sector about the downtown core.

While downtown has increased its residential population substantially and added many new entertainment, and food and beverage venues, private employers have been slow to follow suit.

The city paid $5.4 million for the 1200 Broadway property in 2019. Platt said the price could be negotiable or waived depending on the value of what’s proposed.

At the time of the city’s purchase, Erdman raised the prospect of a public-private mixed-use project at the site.

Canadian Pacific has its U.S. headquarters currently in the Canadian Pacific Plaza building in downtown Minneapolis. (Photo from LoopNet)

“We have future expansion plans and we’d like to partner with the city with resources for more than a parking garage,” Erdman told Council members.

Erdman said at the time the 130 year-old Kansas City-based railroad was experiencing robust growth and recently brought jobs here from Louisiana.

“We’re growing and the company is doing great,” he said. “Should the city move forward in acquiring the (Carpenter) property, we’d enjoy a partnership where we might develop something more than a parking lot.”

In its RFP last fall, the city said any office plan would have to include at least 33 percent net new jobs. A potential residential project would have to reserve 20 percent of its units as affordable under the city’s new standard of 60 percent Area Media Income.