Development

Two groups battle over the future of Kemper Arena

Updated: 2014-02-27T00:32:26Z

By LYNN HORSLEY

The Kansas City Star

For the past four years, Kemper Arena has sat nearly empty — silent and mostly forgotten as high-profile concerts and other marquee events migrated to the Sprint Center downtown.

But a battle is intensifying between two camps over Kemper Arena’s future, and each side is asking the city for a quick decision.

On one side: the American Royal, which continues to push a plan unveiled in October 2011 to tear down Kemper and replace it with a smaller agricultural and multipurpose center.

On the other: Foutch Brothers, a Kansas City development firm that recently has gone public to advocate saving Kemper. The company, which has transformed large historic buildings from Des Moines, Iowa, to Wichita, proposes acquiring Kemper from the city and converting it to a regional youth sports mecca.

Right now, Mayor Sly James is firmly in the American Royal’s camp, which means Kemper Arena’s demolition is increasingly likely. James says he’s not convinced the Foutch Brothers’ approach works financially, although he concedes the American Royal financing needs more work as well.

James says the American Royal has the upper hand because of a 50-year lease that doesn’t expire until 2045 and gives the organization veto power over what happens with the Kemper property. The American Royal doesn’t support the Foutch Brothers’ alternate approach, so that makes it difficult for the city to accommodate it.

“We have a lease with the American Royal that we need to honor, and that lease is controlling,” James said in an interview.

If there were a viable community use for Kemper Arena, James said, it would be serving that function now, more than six years after the Sprint Center opened. Instead, it hosts about two dozen events annually, mostly graduations and small functions that leave it with a $500,000 annual deficit.

The reason it has taken more than two years to move on the American Royal idea, James said, is that the city needed to fully scrutinize the Foutch plan, which emerged behind the scenes more than a year ago.

The American Royal’s plan is on firmer financial footing, James said, although he’s asking it to ensure West Bottoms neighborhood support while also making sure the facility can drive more foot traffic to the area and serve more than agricultural functions.

The American Royal said it is fulfilling those demands.

American Royal Board Chairman Mariner Kemper, CEO of UMB Financial Corp., remains convinced that replacing the arena now is the best option, not just for the American Royal but for the city.

“This is not the Royal strong-arming the city for something,” said Kemper, a member of the family that provided and several million dollars to help build Kemper Arena in the early 1970s. The land came from the Stock Yards Company.

“This is a bunch of citizens trying to build a bright future for the West Bottoms.”

Kemper said he’s normally a huge historic preservation proponent, and no other family is more invested in Kemper Arena. But its time has passed, he said, and it’s better to march into the future with a new building.

The Foutch plan simply can’t accommodate American Royal events, he argues, especially as the Royal strives to be more of a year-round organization.

A new building would be smaller and cheaper to operate, Kemper said, adding that restoring Kemper Arena realistically would cost more than $50 million.

“Everything less than that is duct tape and twine,” he said.

Foutch Brothers officials are equally convinced they can accommodate the Royal’s lease and still save Kemper Arena at significantly less taxpayer cost.

“The whole building will be one big shopping mall of sports training and options,” managing director Steve Foutch said, adding that he has sports club letters of intent indicating the facility could host 1,000 kids per night for basketball, volleyball, batting cages, sports clinics and fitness classes.

Despite city skepticism, he said that the project can be done for $21 million and that he can line up private financing, with no city incentives, although the city would have to sell his company the building at modest cost.

The Royal’s own proposal isn’t cheap. It involves raising $10 million privately, which Kemper says is 80 percent complete. It also estimates $30 million in city money for American Royal complex upgrades, the new building and Kemper demolition.

City Manager Troy Schulte said that can be accomplished by rolling over the existing debt on Kemper for another 20 years, which could still be cheaper than trying to keep Kemper open and maintained under the Royal’s lease.

The Royal plan also requires about $20 million in federal and state dollars, which Kemper said the Royal is starting to aggressively lobby for, although Schulte said that funding remains far from certain.

Kemper said he met with the mayor recently and came away hopeful that a memorandum of understanding, or MOU, can be crafted in the next 30 days.

“I believe there is real progress,” he said. “Let’s get this MOU hammered out and present it to the City Council.”

He said he would be very disappointed if there’s still no agreement within six months. If not, the American Royal could look to relocate, he said, although that’s certainly not what it wants.

Foutch officials aren’t giving up. They say they’ve had extensive meetings as well with city officials, although the mayor said he hadn’t met with them in months.

The company had hoped for a city memorandum of understanding before Christmas, but when that didn’t happen, it went public with its plan and ramped up its publicity campaign.

It also is trying to get Kemper Arena listed on the National Register of Historic Places, which could position it for historic tax credits to make the financing easier.

On Feb. 7, the Missouri Advisory Council on Historic Preservation agreed to forward Kemper Arena’s nomination on to Washington, even though the facility is only 40 years old. A national determination is expected in about 60 days.

Kansas City historic preservation specialist Elizabeth Rosin, who presented the case for Kemper, said there are compelling reasons to save the building and list it on the national register.

She said it has an “exceptionally significant” architectural design and is a local landmark, and the Foutch Brothers’ plan would be a great reuse.

“We’re not spending public money to tear the building down,” she said. “It’s structurally sound and very functional.”

Foutch said he has already invested almost $250,000 in the plan and still hopes for city movement soon, or he might have to take his idea to another city.

Schulte said the Foutch Brothers’ plan is “intriguing” because it would save $6.5 million in demolition costs, doesn’t conflict with Sprint Center uses, and would increase West Bottoms vibrancy. But he said there’s still a question of whether it can succeed, and if the venture failed, even five years down the road, Kemper Arena would become the city’s headache once again. Schulte said the mayor’s preference will guide how the city proceeds.

Prominent property owners surrounding Kemper Arena remain divided.

Bill Haw, owner of the Livestock Exchange Building and other properties near the arena, is so excited about the Foutch Brothers’ plan that he’s considering investing in it. He said it’s a far better deal for taxpayers, and most of the businesses south of Interstate 670 strongly oppose tearing Kemper Arena down.

But Amber Arnett-Bequeaith, vice president of Full Moon Productions, which owns haunted houses and other attractions, said she’s skeptical Foutch can succeed. She said the West Bottoms Business District Association fully supports the American Royal and its plan.

James said the American Royal has the advantage, but also clearly has more work to make its plan a reality. He’s not making any promises on a quick resolution.

To reach Lynn Horsley, call 816-226-2058 or send email to lhorsley@kcstar.com

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