Walking around the streets of Kansas City, no one would suspect that an entire subterranean world exists beneath their feet. And yet for close to 50 years now, that’s been the case. Food companies have been in on the secret for a long time and take full advantage of all the benefits underground storage has to offer.
Why Kansas City? It all goes back to the large deposits of limestone the city has beneath it. “This is the greatest concentration of limestone in the country by a long shot,” explains Tony Kraus, president of Space Center Distribution, a third-party logistics warehousing company with a substantial amount of developed underground space. “The type of limestone in this area is very hard, so it makes for a great natural location for underground commercial space.”
In the case of real estate developer Hunt Midwest, which owns and operates SubTropolis, the largest underground business complex in Kansas City, their mining company first began drilling for limestone in and around the city back in the mid-1940s. By the 1960s, they came up with the concept of developing commercial space in the same area. “When they were mining, they would leave pillars in random paths throughout the space,” explains Dick Ringer, assistant general manager for real estate developer Hunt Midwest.
“They realized that it would be perfectly suited for commercial space if they arranged the pillars into straight lines. Now there is 40 ft. in between all of the pillars to accommodate business and warehousing structures.”
Because Kansas City has such a rich, natural environment for underground storage, it has become the nation’s leader in this type of space. “There’s a big knowledge base here,” says Paul Licausi, president of LS Commercial Real Estate. “We have developed the best methods for subsurface development and many people come here seeking guidance.”
Originally, underground space was viewed as a good idea because of the cost savings it offered. Today that’s still a big benefit, but now a myriad of factors make underground storage ideal for a variety of companies, especially those in the food industry. “The cost savings brings people down,” says Ringer, “but they stay for a whole host of reasons.”
What Makes It Appealing
Kansas City’s underground storage facilities offer a wide variety of benefits, beginning with cost. Lease rates, for instance, tend to run 30 percent to 50 percent less than in comparable above ground facilities. Utility costs are also lower—around 50 percent to 70 percent in total energy costs.
Another benefit is tax savings, according to Ringer. “Below ground, we’re charged about 30 cents per square foot in taxes,” he explains. “Above ground that can run anywhere from $1 to $1.60 per square foot in comparison.”
The cost of constructing space underground is also less expensive, according to Kraus. “Overall, construction costs can run about a third cheaper than above ground space,” he explains. “This is savings we can pass on to the customer.”
Beyond cost savings, the underground facilities have other advantages. For one, the temperature remains at a constant 68 degrees to 72 degrees year round. In the underground freezer buildings, SubTropolis is able to freeze the rock so that there is a permafrost around the freezer buildings, keeping the temperatures at a constant cool temperature.
“Here in Kansas City, the weather can vary from single digits in the winter time to 100 degrees in the summer,” says Licausi. “But underground remains constant.”
According to Licausi, that translates into several benefits. “For employees, it means that they are in a very comfortable temperature range at all times, which helps with productivity,” he says. “Underground you don’t have to worry about outside weather, so things like snow or heat or rain aren’t going to impact your operations.”