KANSAS CITY—The revival of the US auto industry has set off a chain reaction in this Midwestern city, as world-class suppliers continue to set up new facilities to feed the vast GM and Ford factories.
Martinrea International, one of the largest global Tier 1 auto-parts suppliers, for example, has just signed a long-term, build-to-suit lease for a 275,560-square-foot building in suburban Riverside. The company will use the industrial facility, which will sit on 15.22 acres at 5233 NW 41st Street in the Riverside Horizons Business Park, to supply components for Chevy Malibus built at the General Motors Fairfax Plant and create as many as 290 new jobs.
“All of the stars have aligned for Kansas City,” Erik Murray of Lee & Associates tells GlobeSt.com. Murray and Nathan Anderson, managing principal, negotiated the long-term lease. “Both of the plants here, GM and Ford, went through some fairly extensive upgrades in the last few years. And there has been a steady stream of suppliers looking to grow their operations.”
In January 2013, GM announced that it would spend $600 million to upgrade the Fairfax plant. A few months later, Ford announced that it would add 2,000 workers to its Kansas City Assembly Plant to meet consumer demand for the Ford F-150 and produce the new Ford Transit.
Suppliers have responded with a flurry of investment and new construction. As reported in GlobeSt.com last month, LMV Automotive Systems, just decided to build a new $49.7 million, 253,600-square-foot manufacturing operation in suburban Liberty. And that follows a 2012 investment by LMV in another $42 million, 212,550-square-foot manufacturing complex in Liberty, where it now employs more than 150 workers.
Furthermore, as reported in GlobeSt.com last November, the Spanish automotive company Grupo Antolin North America will invest more than $15.7 million in a 148,800-square-foot facility at 1601 Southern Rd. in Kansas City, creating an estimated 118 new jobs. And last May, GlobeSt.com reported that Yanfeng USA Automotive Trim Systems had just decided to locate a new manufacturing plant in Riverside Horizons.
“I can't disclose any details of the Martinrea lease deal,” Murray says, but he expects that the Ontario-based Martinrea, as a public company, will disclose the information at some point. The Tutera Group, led by Joe Tutera, will develop the property in conjunction with Crossland Construction and Davidson Architecture & Engineering.
“This new facility will be the first of its kind for a Tier 1 supplier in that it will include stamping, welding, e-coating, and assembly operations all under one roof, creating efficiencies for both Martinrea and GM,” Murray adds.
Lee & Associates, the development team, and representatives from the Kansas City Area Development Council visited Martinrea's Canadian plants and headquarters earlier this year to help secure the project for the Kansas City region. “The first priority for a supplier is proximity to the plant,” Murray says. “After that, the most important thing is having development-ready land with infrastructure in place that the developer can finish in a few months.”
In this case, the site at Riverside Horizons is only five minutes from the intersection of I-35 and I-70, and provides quick access to the auto plants, the airports, and even downtown Kansas City. And according to Murray, the city of Riverside has invested tens of millions of dollars to build up area infrastructure, which will allow the developer to finish this new building in seven months. “That was really the catalyst.”
“I expect this type of development to continue, absolutely,” he says. “You're going to see many more suppliers looking at Kansas City.”
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Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
