American Royal claims progress toward a new building

07/16/2014 6:11 PM

07/16/2014 8:46 PM

As the Kansas City Council prepares to decide the fate of Kemper Arena, American Royal leaders disclosed two breakthroughs Wednesday that they say strengthen their case for demolition and a new building.

The organization said it has surpassed its goal of raising $10 million toward a new facility to replace Kemper Arena, and it has a verbal agreement with Sporting Kansas City’s investor group to fill the building with youth sports when it’s not occupied with agricultural events.

“We have raised all the private money we committed to,” American Royal Chairman Mariner Kemper said in an interview with The Kansas City Star on the eve of a City Council meeting to begin weighing the arena’s future.

The council’s Planning, Zoning and Economic Development Committee will hold the first of a series of hearings Thursday to consider two competing options: the American Royal’s plan to demolish the arena and replace it with a custom-designed building or the Foutch Brothers’ proposal to renovate Kemper as a regional youth sports complex.

The council committee hopes to have a recommendation by the end of August and a council decision by the end of September.

Despite the progress announced Wednesday, council members aren’t yet certain that the American Royal has the best plan.

“I’m not convinced, and I don’t think anybody on the committee is convinced, that the American Royal proposal, which includes tearing down Kemper, is the thing we should do,” committee chairman Ed Ford said Wednesday.

Kemper, chief executive officer of UMB Financial Corp., said Wednesday that $15 million in private donations has been raised through seven gifts, including $10 million to build a new building and $5 million for an endowment.

That fulfills a goal he and his late father, R. Crosby Kemper Jr., outlined in October 2011 when they unveiled plans for a $50 million agricultural events center to replace Kemper Arena and asked the city for help with financing much of that cost.

The city has tried ever since to solidify its portion of the financing. That process grew more complicated last year after a plan emerged from Foutch, a Kansas City development company specializing in historic renovation, to save Kemper Arena by acquiring it from the city and converting it for youth sports.

City officials had said they were intrigued with Foutch’s idea because it was potentially less expensive and could bring thousands of children and their parents to the West Bottoms, creating vitality in the area and providing an economic shot in the arm. After the Foutch plan emerged, Mayor Sly James asked the American Royal to make sure its new building could also bring people and activity to the West Bottoms for more than just horses and agri-entertainment.

On Wednesday, Mariner Kemper and American Royal CEO Bob Petersen said a new partnership has emerged with Sporting Club in the past three months that fulfills the mayor’s desire. Sporting Club is the investor group that owns the Sporting Kansas City major league soccer team.

“At the mayor’s insistence, we’ve gone back and looked at our original plan and it’s evolved considerably,” Petersen said.

This is not copying the Foutch plan, Kemper said, but responding to the city’s hope that any new building would serve as a catalyst for a West Bottoms revival.

“We will be filling it year-round with these other types of activities, whether it’s youth sports or outdoor festivals,” he said.

Sporting Club CEO Robb Heineman confirmed the group’s interest Wednesday in partnering with the American Royal. He said he’s sure that the plan can work and that Sporting Club has the expertise and connections with other organizations to fill the building with indoor soccer and other athletic activities.

James declined to comment Wednesday on the American Royal’s progress, but City Manager Troy Schulte was encouraged.

“It sounds like it’s promising,” Schulte said.

Schulte said a major concern had been whether the new American Royal building would be enough of a draw outside the Royal’s season, so the partnership with Sporting Club could fulfill that need.

In addition to raising $10 million privately, the American Royal Association wants $30 million from the city for upgrades to the American Royal complex, the new building and Kemper demolition. It is also counting on about $20 million in state tax credits.

Schulte said he has figured out a way that the city can provide about $25 million toward the project. The city will pay off existing debt on Kemper next year, so it could issue bonds for 20 more years and keep paying the same debt service.

Schulte was skeptical that the American Royal can get $20 million in state tax credits because the existing cap is $10 million statewide, but Kemper said he’s had good conversations with state officals.

Although Kemper said he has great love and nostalgia for the arena, named for his grandfather, he is adamant that it has outlived its useful life.

Steve Foutch, managing director of Foutch Brothers, says otherwise. He says there’s enough property to build a new American Royal building and still save the arena.

“Our presentation is all about coexisting,” Foutch said in a telephone interview. “They can still have their new arena. We coexist and do the sports and let them concentrate on equestrian and agriculture.”

Foutch said an independent analyst has confirmed that Kemper can be renovated for $21 million, and he can finance that privately if the city will give him the building.

“We’ve met with the mayor and city manager and we’ve gotten nothing but strong support,” he said.

Ford said the council’s task will now be to scrutinize the numbers behind both proposals and decide which one works better for the city.

The council will be briefed Thursday on Kemper Arena’s existing financial situation and will take a tour. It is scheduled to hear from Foutch on Aug. 7 and from the American Royal on Aug. 14. It plans a public hearing in late August in the West Bottoms.

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

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