Teva Neuroscience is moving its headquarters and 400 employees from Kansas City to a $55 million project planned for Overland Park at the prime corner of Nall Avenue and College Boulevard.
The pharmaceutical firm, which traces its roots to a 1990s partnership with Marion Merrell Dow, is the latest big company to cross the border aided by tax incentives.
The firm looked at 30 sites on both sides of the state line along the Interstate 435 corridor from Metcalf Avenue to the former Bannister Mall property.
Instead, its new five-story building, slated for land now owned by Sprint, will be the first major office development in a generation along Johnson County's premier corporate avenue.
The decision by Teva Neuroscience, whose main products are drugs for treating multiple sclerosis and Parkinson's disease, ends a search that began a year ago. Officials at the company, now at 901 E. 104th St. near I-435 and Holmes Road, say their employees are split evenly between Kansas and Missouri.
"Some will be happy, and some will be sad," said Larry Downey, president of Teva U.S. Brand Pharmaceuticals. "It was important to be in the corridor."
Greg Westbrook, vice president of human resources at Teva, said the financial incentive package from Kansas and Overland Park, which the firm declined to disclose, was only part of the company's considerations. Missouri and Kansas City also offered an incentive package.
"It wasn't so much about not Missouri. It was the right spot, and there were few options to choose from at that point," Westbrook said.
Added Denise Bradley, vice president for corporate communications at the firm's parent company, Israel-based Teva Pharmaceutical Industries: "We're active in the Kansas City community, and that won't change from which side of the state border we're on."
The jobs are primarily office-based, including sales, marketing, patient services and support, as well as such functions as information technology, finance, personnel and legal.
Although Teva seriously considered the former Bannister Mall property owned by Cerner executives Cliff Illig and Neal Patterson, now called the Trails, the opportunity to occupy a showcase on College Boulevard proved irresistible. It will be the first top-tier office building to go up on that core stretch in 20 years.
"It's a high-profile tenant in a high-profile site," said Ken Block, president of Block Development Co., the developer of the Teva project.
"It will certainly be one of the nicest buildings that will be seen in that corridor when it's completed."
In another twist on the cross-border incentive controversy, the firm designing the 154,000-square-foot building for Teva also is a recent metropolitan transplant to Kansas. Hoefer Wysocki Architects relocated its offices from the Country Club Plaza to Leawood in July 2010.
Business leaders on both sides of the state line have decried the use of incentives to shift companies across the border with no net economic gain to the community.
Last year alone, AMC Entertainment announced it was leaving downtown Kansas City for Leawood, aided by a reported $47 million incentive package, and Applebee's International relocated from Lenexa to Kansas City, lured by a $12.9 million package.
Tim Schaffer, the official at RED Brokerage who guided Teva in its search along with Mike Levitan, said the quality of amenities in Overland Park, such as hotels and restaurants, coupled with the ability to move quickly enough to have a building ready for occupancy by October 2013, made the difference.
"We spent a great deal of time looking at the Bannister site," Schaffer said. "It was one of the few that fit into our geographic limits. We liked the site. However, Teva has timing constraints and needed to make a decision."
At its special session last fall, the Missouri General Assembly considered a proposal that would have provided $30 million in land assembly incentives to aid the effort to attract Teva to the Bannister site, but that plan fizzled along with the rest of the economic development legislative package.
"We should have done this in special session," said Democratic Rep. Michael Brown of Kansas City, who sponsored the legislation. "Teva wanted to stay in Missouri, but Kansas was offering way too much.
"We're competing with another state and coming up with legislation, but we're not doing it in time."
Kansas City officials declined to comment.
Dan Lara, a spokesman for the Kansas Department of Commerce, confirmed the state had offered incentives to Teva but said the amount would remain confidential until a contract was signed.
Downey said his company had outgrown the space it currently occupies in a building owned by Executive Hills. It has been its home for more than 10 years.
The company was started in the mid-1990s as Teva Marion Partners, a joint venture between Marion Merrell Dow and Teva established to market Copaxone, a Teva multiple sclerosis drug. Teva bought out its American partner's interest in 2001.
"We were looking for a facility that would handle our needs going forward," Downey said.
"A lot of things came into the decision. It was a combination of developer and architect designing a great building to fit the culture of our company. We had the accessibility, it was close to amenities, and we worked with the state and the city to work on the incentive package.
"Adding all of them together helped with the decision."
The development site is on 18.1 acres now owned by Sprint southwest of Nall and College. The property is part of a 55-acre tract that Sprint and Overland Park officials had considered as the potential site for an entertainment district development a few years ago.
Block said the development being built for Teva Neuroscience will use 11 acres, leaving 7 acres for another potential corporate office project. Besides the initial Teva office building and a 600-space garage, an additional 112,000-square-foot building could be developed for Teva if needed.
"Teva is a fabulous company," Block said. "They have an incredible reputation financially and in the work that they do. We think this building will be one of the nicest buildings you'll see on the market."
The building's materials will include glass, architectural precast concrete and brick inlays. A water feature including fountains and waterfalls is planned for the corner of College and Nall as well.
The construction schedule calls for work to begin in July if the necessary approvals are received from Overland Park. The project is expected to be ready for occupancy in October 2013.
Block said Teva had signed a 15-year lease. The development entity is Block Development Co., a sister firm of Block Real Estate Services.
"Our goal is to do something unique," Block said. "This will not be a standard five-story office building. This will be a world-class facility."