While it hasn’t gotten the hoopla, the new IRS campus is the biggest project happening downtown — dwarfing the Sprint Center and H&R Block headquarters in size and cost.

The $370 million Internal Revenue Service Kansas City Campus nearing completion on a 27.5-acre site on West Pershing Road near Union Station is scheduled to begin operations this October. It includes the renovation of the historic Main Post Office and construction of three office annexes and a warehouse for a total of 1.14 million square feet.

That’s almost as big as the 38-story Town Pavilion, Kansas City’s second-tallest skyscraper; more than twice the size of the new H&R Block office tower; and 40 percent larger than the Sprint Center.

In fact, there are only a handful of similar-size federal projects under way in the entire country, most in the Washington, D.C., area, according to officials at the General Services Administration. When it’s fully operational a year from now processing 2006 tax returns, it will have 3,000 full-time employees and up to 5,000 more seasonal employees.

And if you think filling out your tax forms is a headache, imagine trying to coordinate the move of all those employees and their equipment from seven locations in the metropolitan area on both sides of the state line.

“When we look at our migration plan, it’s a mammoth agenda to say the least,” said Fred Hodge, the director of the IRS Kansas City Submission Processing Center. “Employees are becoming more excited about the planned migration to the new space. They were a little pessimistic at first, but that’s beginning to wane, and people are growing more excited and positive as the time approaches.”

Planning for the facility began behind the scenes in 2001 and became public in August 2002. That’s when Sen. Kit Bond of Missouri confirmed that he was working with Kansas City civic leaders on a plan to reuse the old Main Post Office on West Pershing Road and create a new service center for the IRS.

The Kansas City facility is part of a nationwide IRS reorganization that is consolidating the number of facilities where paper tax returns will be processed into three facilities: Kansas City, another large center in Fresno, Calif., and a smaller center in Austin, Texas.

The new Kansas City campus will bring together regional operations now located in two buildings at the federal complex on Bannister Road in Kansas City, and Overland Park-based operations spread between three buildings in the Rosana complex near 119th Street and Metcalf Avenue, and leased space near 109th and Roe and 105th and Metcalf.

The campus is divided between the new construction — the three annexes and warehouse, which will be known as the Pennway Complex because it borders West Pennway — and the former post office, which is being called the Pershing Building.

The new annex buildings are cavernous — each 500 feet long and 220 feet wide with an open, floor-to-ceiling interior that makes them feel like small arenas. Each building is large enough to accommodate two dozen basketball courts and windows on the upper level.

During the offseason, from July to January, when seasonal employees are not working on processing tax returns, about half of the space in the annexes can be closed to save on utility costs.

A glass-enclosed corridor between the Pennway Complex and Pershing Building overlooks an interior courtyard and offers impressive views of the downtown skyline and the historic Post Office building.

The former post office building, built in 1933, has a new atrium being built that will open up all six floors to natural light from a rooftop skylight. Sections of the original lobby have been preserved, and the wood-paneled executive offices on the top floor will be restored and used as conference rooms.

“The environment for most of the employees will be much improved from the standpoint of the ambience they’ll have,” Hodge said.

On a recent tour, David L. Winstead, public buildings service commissioner for the national GSA, said the project is a good blend of new and historic architecture. BNIM and 360 Architects designed the campus, and J.E. Dunn Construction Co. is the contractor.

“It’s a wonderful center that meets the IRS need for consolidation, and it’s a great functional facility that’s being built in an incredible short time schedule,” Winstead said.

Bond also toured the facility about two weeks ago and praised its progress.

“This is a perfect example of the public-private partnership that will spur significant economic development in the region and create jobs,” he said.

Local IRS employees have been receiving regular updates about the project in the employee newsletter, and a “Move Fair” is scheduled for the last week in May to provide information about transportation and campus amenities.

As part of the project, several new traffic signals will be installed near the project, and West Pennway and Pershing Road will be widened to accommodate the additional traffic.

Improved bus service also is being planned with both the Kansas City Area Transportation Authority and the Johnson County and Wyandotte County transit systems.

The project is being built by Pershing Road Development Co. LLC, a partnership of DST Realty and Premier Finances, a company controlled by Michael Merriman of Financial Holding Corp.

The development financing relies substantially on city and state tax increment financing that will be repaid through the increased tax revenues generated over the 23-year life of the TIF.

The city points to the benefit of several thousand new employees coming downtown, including 1,800 from Overland Park, as making it a worthwhile investment.

There also have been substantial benefits for Union Station. As part of the project, the U.S. Postal Service relocated its retail operations from the Main Post Office inside the historic terminal building, and its mail-handling operations to the old railway freight annex west of the terminal.

A 1,500-space parking garage also was built west of Union Station to accommodate seasonal IRS workers. Between the lease for the garage and the postal service, Union Station receives up to $2.5 million annually in rent, according to Vince Dasta, president of DST Realty.

“We’re significantly ahead of schedule, and it’s been a great public-private partnership,” Dasta said. “It’s also the most complicated transaction we’ve ever been involved with.”

Besides the IRS, the U.S. Postal Service and the General Services Administration, Dasta said the deal involved more than a half dozen other federal, state and city governments and agencies.

The development that led to the new IRS facility also provided financing to relocate a historic railroad bridge that will be used to link Union Station with the Freight House District.

Andi Udris, president and CEO of Union Station, said the IRS development already has been a huge benefit to his facility.

“It was the most significant step in saving Union Station fiscally,” he said.

Reproduced with permission of The Kansas City Star © Copyright 2006 The Kansas City Star. All rights reserved. Format differs from original publication. Not an endorsement.

© Kansas City Area Development Council