CenterPoint Gains Financing for $4.8B Facility

KANSAS CITY, MO-Baltimore-based CGA Capital Group has arranged $687 million in construction financing for Oak Brook, IL-based CenterPoint Zimmer LLC to build the 1.5-million-square-foot manufacturing facility here for the National Nuclear Security Administration. The total cost of the new complex, including design, construction, equipment and payments on a 20-year lease, is estimated at $4.8 billion.

The state-chartered Planned Industrial Expansion Authority of Kansas City will own the property, being built on a farm here. CenterPoint will  develop the site, and will lease the planned five-building manufacturing and research facility to the US General Services Administration when completed. Honeywell Federal Manufacturing & Technologies LLC will manage the complex.

The site for the complex, to be called the National Security Campus, will employ 2,500 workers and will be used to manufacture non-nuclear components for nuclear weapons. The lease rate will be $41 per square foot.

CGA Capital, which was assisted by a team of attorneys from Ballard Spahr LLP, served as exclusive financial adviser and structuring agent for the complex public-private venture, and was the sole arranger of the private placement of bonds through a venture with a privately held securities firm. CGA’s efforts covered every aspect of devising and structuring the financing needed for the project.

A CGA spokesman tells GlobeSt.com that 14 large institutional investors provided funds for the construction loan. “We identified years ago that this project would be better set up as bond-type financing, which was against what was accepted for traditional commercial real estate at the time. Now, it’s ironic, most commercial deals  are either not financeable, or they are considering bond-type financing,” the spokesman says.

The complex construction stems from the administration’s desire to move out of the World War II-era Bannister Federal Complex nearby, a building that saw the beginnings of the Manhattan Project. The 5.2-million-square-foot complex was previously the home of many government agencies, but many, including the IRS, have moved out to new buildings. The Bannister property has been deemed heavily polluted, and legal difficulties with the pollution actually held up the National Security Campus project for two years. Groundbreaking for the new facility is set to happen in August, with relocation of workers scheduled for 2012 and full occupancy expected by 2014.

The CGA spokesman says it just made sense to keep the building here rather than move to another state. “We had a study that showed the average salary of people working at Bannister is just shy of $100,000 per year. We’re keeping the intellectual firepower together,” he says.