Cerner Is Latest Facility for Kansas City

Cerner Corporation, which makes software and technology for the health care industry, is developing a 135,000 square foot data center near the company's headquarters in Kansas City. Cerner began construction of the complex last spring, with completion expected this summer. It expects to spend $60 million on construction and $20 million on equipment during the first year of the project.

Cerner is the latest company to build in Kansas City, a market that illustrates the "clustering effect" for data centers discussed in our article last week on the Boyd Company's data center site location research. Kansas City is home to data center facilities from MasterCard, Liberty Lexis/Nexis, Ameritrade, Quality Technologies, IDC Global, 1&1 Internet and many others. It has benefited from a strong availability of fiber and power, as well as a supportive local economic development community that was among the earliest second-tier cities to market its suitability for data centers.

According to Kansas City press reports, Cerner is seeking up to $80 million in revenue bonds for the financing of a new data center and office building. The Kansas City Council's Finance and Audit Committee have recommended the approval of the bonds for the project at the corner of 33rd Terrace and Chouteau Trafficway in Kansas City, North.

Construction on the complex, which will serve as a back-up for Cerner's Lee Summit data center, began in Spring 2006. Completion is scheduled for this summer.

According to the Kansas City Star, the bonds, known as Chapter 100 bonds, would be repaid by Cerner through a lease agreement with the city. The city would have no obligation to repay the bonds and they would not appear on the city's debt statement. The deal includes property and sales tax abatements.