WeWork Closing Corrigan Station, Once a Core Hub for Kansas City’s Startup Community Shakeup Continues in Coworking Industry

Coworking giant WeWork has confirmed the planned closure of its Corrigan Station location in Kansas City — a space once closely intertwined with the local startup scene and its flourishing culture of innovation.

“As part of WeWork’s strategic restructuring efforts, we have made the difficult decision to end our operations at Corrigan Station,” a WeWork spokesperson told Startland News.

Opened in summer 2017, the Crossroads location in the historic Corrigan Station building is expected to close by the end of April.

WeWork filed for Chapter 11 bankruptcy protection in November, throwing into question the futures of its Kansas City coworking spaces at Corrigan Station and lightwell — a two-floor downtown WeWork concept with nearly 100,000-square-foot space that opened in 2020 just as the global COVID-19 pandemic began.

WeWork lightwell is expected to provide a potential landing spot for those companies officing at Corrigan Station, the company said. 

“We have offered affected members the option to relocate, with our support, to WeWork lightwell and deeply apologize for any inconvenience this may cause,” the WeWork spokesperson said. “Kansas City continues to be a priority market for WeWork and we look forward to continuing to provide our members with flexible workspace solutions at our other location in the city.”

Emails sent by Startland News to the person previously identified as the community manager for WeWork’s operations in Kansas City were returned as undeliverable Thursday, and the company’s corporate affairs office did not respond when asked for the name and contact of the person currently in that position; instead directing anyone interested in joining the WeWork community to contact the local team via its website.

Closures Follow ‘Unsustainable Hypergrowth’

WeWork’s spokesperson declined to offer details on specific reasons for closing the Corrigan Station location, but shared a letter posted in September from David Tolley, CEO of WeWork, addressing the challenges the global coworking business faced when it began landlord negotiations in a last-ditch bid to sharpen the business before bankruptcy. 

“Following a period of unsustainable hypergrowth, WeWork has been on a years-long transformation to resize our cost structure, grow sustainable revenue and strengthen our balance sheet. All this while navigating a global pandemic,” Tolley said in the letter.

But WeWork’s struggles predated the onset and prolonged impact of COVID-19. After swelling to more than 110 locations globally, its founder and CEO Adam Neumann was ousted in 2019. A Hulu documentary — “WeWork: or The Making and Breaking of a $47 Billion Unicorn” — chronicled the company’s real estate bubble burst.

And despite significant cuts to operating costs and rising revenue, the Associated Press reported, WeWork continues to face an unfriendly market where capital is more difficult to borrow and office workers have shifted to hybrid and remote work models that didn’t immediately jibe with the setup and business model WeWork pioneered since its founding in 2010.

The company reportedly has vacated 3 million square feet of offices worldwide, with closures continuing.

“We are taking immediate action to permanently fix our inflexible and high-cost lease portfolio to achieve the sustainable operating model that we need to serve our members for many years to come,” Tolley teased in his September letter. “By addressing this reality now, we will be able to continue investing in and innovating our business on behalf of our members.”

Kansas City owned-coworking community Plexpod, which in February confirmed its own campus consolidation with the closure of Plexpod Westport Commons (now The Offices at Park 39), already is receiving outreach from WeWork Corrigan Station members who are looking for new offices, said Grayson Smith, president of Plexpod.

“I can’t say we were surprised by the WeWork announcement,” Smith told Startland News. “Their problems are unique to them and quite frankly, we are tired of hearing so much negative news about WeWork. Our industry is so much bigger than them.”

For Plexpod, the pandemic created as many opportunities as challenges, founder Gerald Smith said previously, noting an uptick in meeting room bookings and an evolution in the local company’s strategy to capitalize on hybrid office setups. Closing its Westport Commons location was a move to match Plexpod’s offerings to changing member demands, while keeping the business sustainable, he said.

Both Plexpod Westport Commons and WeWork Corrigan Station came online in mid-2017 amid a coworking boom (locally and internationally). WeWork’s addition to the mix in Kansas City was billed as a 44,000-square-foot, four-story collaborative workspace catering to the “rising millennial workforce.”

“Our goal is to help the people of Kansas City make a life not just a living by connecting them to the local and global community of entrepreneurs, elected officials, philanthropists and artists,” Adam Wacenske, then-general manager of WeWork’s southern region, said in 2017. “The purpose of this journey is to showcase the city’s jewels and offer a glimpse into the future.”

(Wacenske left WeWork in 2021 to join an online grocery services startup that within 18 months exited for $1.2 billion.)

The renovated WeWork space at 18th and Walnut streets became home to startups large and small, boasted the offices for Techstars Kansas City and other high-profile innovation community organizations, and was the site of countless startup community events — within its sprawling interior community space and from Corrigan Station’s popular rooftop venue that offered near-panoramic views of the city.

“I do feel bad for Corrigan Station. I know the work community there is a really tight group that love the space,” said Grayson Smith, noting Plexpod has introduced a special offer for exiting WeWork members. “With the amount of calls and inquiries we’ve had just today from companies, our biggest concern now is that we really don’t have enough space for everyone, should they choose to move to Plexpod. But, we do hope that the companies that actually call Kansas City home will reach out to us quickly. The ones that support and promote Kansas City need to be at Plexpod anyway. We are the hometown team when it comes to coworking.”

Key value propositions for Plexpod run counter to priorities at WeWork, he continued, noting his team’s focus on local — community and mindset — as well as its partnerships with the landlords across its network, which includes locations in downtown at Flashcube, the Crossroads, and Lenexa.

“Entrepreneurs need respectable places where they can work, attract employees, and grow companies,” Smith said. “We want to provide that opportunity for growing companies and do our best to keep the barrier to entry as low as possible; affordable to anyone.”

In February, Plexpod teased plans to announce a new location in Johnson County this spring, along with a coming project with a national partner that offers Plexpod significant expansion opportunities.

“2024 will be a pivotal year for Plexpod,” said Smith. “The opportunities have never been brighter, but we don’t go it alone. We need the support of our community, and those that are willing to work with us to make Kansas City a special place for entrepreneurship. While we have had tough choices to make, such as recently closing our Westport location, we are equally excited to announce new locations along with better ways to serve the community.”

Lease Negotiations, Big Changes Continue Nationally

Meanwhile, WeWork is making headlines this week beyond Kansas City as the company jockeys between lease negotiations, office closures and renewed commitments at high-profile locations along the West Coast.

There, a regional coworking and office space network called Centrl — with locations in Portland, Los Angeles and Sacramento, California — is taking the same tack as Plexpod in filling the void left by WeWork’s right-sizing efforts.

The changes appear to match what WeWork’s Tolley outlined in his September letter, which pledged to “exit unfit and underperforming locations and to reinvest in our strongest assets as we continuously improve our product” in a financially sustainable manner.

“WeWork is here to stay,” Tolley said in the letter. “We will remain a global flex space leader and trusted real estate partner to our members. As companies of all sizes seek flexibility in where and how their employees come to work, this initiative best enables us to continue to invest in our products, services, and member experiences to meet evolving workplace needs far into the future.”

The story first appeared on Startland News, a member of the KC Media Collective. Tommy Felts is editor-in-chief of Startland News.