Waddell & Reed Financial Inc. is not going to transfer into new headquarters in downtown Kansas Metropolis, Mo., and is shedding 219 staff in reference to its pending sale to an Australian financial group.
The Overland Park-based firm had deliberate to maneuver right into a $140 million, 18-story tower at the moment below development at 14th Road and Baltimore Avenue. However the mum or dad firm of Macquarie Asset Management, which in December introduced a $1.7 billion deal to amass Waddell & Reed’s inventory for $25 a share, mentioned in an announcement Tuesday that it was abandoning these plans.
“Whereas we is not going to be occupying the brand new constructing, Macquarie and LPL stay dedicated to the area and supporting the wants of our purchasers and employees right here,” the assertion mentioned. “It’s our understanding that development on the constructing at 1400 Baltimore will proceed.”
LPL is LPL Monetary Holdings Inc., a Boston-based broker-dealer. Macquarie plans to promote Waddell & Reed’s wealth administration group to LPL for $300 million as soon as its acquisition of Waddell is accomplished.
About 900 Waddell & Reed funding advisors are anticipated to affix LPL in reference to that transaction, leaving Waddell & Reed with significantly much less want for the house offered by the downtown tower.
New tax reforms
The downtown tower has figured prominently in ongoing debates in regards to the propriety of tax incentives to draw companies to Kansas Metropolis from different cities.
Missouri granted Waddell & Reed $62 million in incentives to relocate from Overland Park and the Kansas Metropolis Council accredited a 75% tax abatement for the tower over six years adopted by a 37.5% abatement over 9 years.
Morgan Stated, deputy chief of employees for Kansas Metropolis Mayor Quinton Lucas, mentioned that Macquarie stays contractually dedicated to lease or sublease the tower and the developer is dedicated to ending the constructing.
“The developer has shared that the undertaking stays on time and on finances,” Stated mentioned in an electronic mail. “Though this deal was first hatched below a previous administration, the Metropolis expects the 1400 Baltimore constructing to be a powerful asset for workplace relocations to downtown Kansas Metropolis. The undertaking additionally will help much-needed parking demand because of the shuttered and expensive-to-replace Barney Allis Plaza storage.”
The tower was one of many final initiatives allowed to proceed earlier than Missouri and Kansas agreed to end the practice of granting generous tax breaks to induce corporations to maneuver throughout the state line.
In 2019, after weeks of debate and strain from Kansas Metropolis Public Faculties, Waddell & Reed agreed to shave practically $9 million from its unique request.
Final week, the Kansas Metropolis Council unanimously accredited a measure limiting tax subsidies for many initiatives and lowering the utmost interval for them from 25 to fifteen years.
Affect on Overland Park staff
The opposite fallout from the take care of Macquarie – the elimination of 219 positions at Waddell & Reed – was introduced in a discover final week to the Kansas Division of Commerce and Overland Park Mayor Carl Gerlach.
Waddell & Reed mentioned the layoffs will happen starting April 30. It didn’t specify the character of the roles being eradicated.
Roger Hoadley, a spokesman for Waddell & Reed, mentioned in an electronic mail that the affected staff will probably be eligible for severance advantages, “together with continued sponsored healthcare and outplacement providers to help them in securing new jobs.”
Hoadley mentioned Waddell & Reed’s Ivy Funds model, certainly one of its funding distribution channels, is not going to be affected by the layoffs.
“Ivy funding groups are anticipated to handle their portfolios following the shut of the transaction,” he mentioned.
Macquarie is anticipated to finish its acquisition of Waddell & Reed, which has greater than $74 billion in belongings below administration, someday in the course of this 12 months.
KCUR 89.3 is Kansas Metropolis’s NPR affiliate public radio station. You possibly can learn and hearken to extra of their reporting at kcur.org.