American Royal plan for Kemper Arena prompts praise and skepticism

American Royal advocates made an aggressive pitch Thursday to replace Kemper Arena with a new building as the best way to revitalize the West Bottoms and save up to $100 million in long-term maintenance costs.

But critics scoffed and argued there are far better uses for the more than $20 million in taxpayer investment that would be required.

After a spirited discussion Thursday, City Council members agreed the city probably needs to find out whether there are other workable alternatives for Kemper Arena before concluding negotiations with the American Royal. That could postpone any resolution on the thorny question of Kemper Arena’s future for months.

“There’s not a lot of love for the American Royal proposal,” Councilman Ed Ford said, summarizing the crowd’s mood at a joint meeting of the council’s finance and planning and zoning committees. Ford and other committee members said that legally they need to put out a request for proposals, testing whether there are other credible redevelopment plans besides the American Royal’s.

But Korb Maxwell, an attorney for the American Royal who made the association’s presentation, said afterward that no other group has put forth a viable solution that decreases the long-term taxpayer burden, brings more activity to the American Royal complex and honors the association’s binding lease with the city through 2045.

The council is considering a resolution to provide the Royal with up to $20 million for its new building, plus $1 million in annual operating subsidy for 20 years. It’s the city’s counteroffer to the Royal’s request for $30 million for a new building plus $1 million per year for 30 years.

City finance officials say the city’s offer doesn’t cost any more than the city is already shelling out for the American Royal complex annually, but the Royal’s higher request would require a new revenue source.

The Royal says it has raised $10 million privately for the building, plus millions more in a maintenance endowment, and it will seek $20 million in state tax credits to make the whole project a reality.

Maxwell argued Thursday that if the city doesn’t partner with the American Royal and tries to keep Kemper Arena for the 30-year remainder of the association’s lease, it faces up to $188 million in deferred maintenance, capital maintenance and operating costs for the American Royal complex.

“That is a staggering amount of money,” Maxwell said, contending it would be far cheaper to help the American Royal build a new, smaller building, with the Royal assuming the long-term capital costs after that.

In partnership with Sporting Kansas City investors, Maxwell said, the American Royal will provide a “dynamic facility and complex” that accommodates the association’s events but also Sporting’s youth sports, festivals, small conferences and trade shows with year-round vitality.

“Kemper is holding back the West Bottoms but also the American Royal,” he said. “It’s the facilities that are holding back the American Royal.”

But Councilman Scott Wagner and many in the audience weren’t buying it.

Wagner said he suspects that with or without the new building, the American Royal’s business model isn’t sustainable. He noted the Royal pays about one-third the rent it paid the city at the lease’s start in 1995 and cited a consultant’s report predicting that even with a new building, it would attract only five more agriculture-related events annually.

“We have lived with a bad contract,” Wagner said of the strangling effects of the city’s lease with the Royal, adding that he doesn’t want to be part of what could become another bad deal.

Until recently, the City Council was considering an alternative plan put forth by the Foutch Brothers development company. Foutch wanted to repurpose Kemper for youth sports and had argued that Kemper could coexist with the American Royal’s new building on the property.

The American Royal disagreed and sent Foutch a “cease and desist” letter Oct. 17, saying its words and actions to get national historic designation for Kemper Arena were interfering with the Royal’s binding lease with the city. Foutch then withdrew its plan.

Bob Specht, 23, a downtown resident who works in the Crossroads, told the committee Thursday that those in his generation just don’t go to American Royal events but do value Kemper Arena as a historic cultural asset that should be saved. He said opening up parking lot space for the Royal’s giant annual barbecue is no reason to tear down Kemper.

DuRon Netsell, 26, said that if the council accommodates the American Royal’s request, it will be “giving in to extortion.”

Former city councilman Dan Cofran, now a Historic Kansas City board member, said the organization has 300 members who vehemently oppose demolishing Kemper, “and we all vote.”

Cofran said that providing $20 million in taxpayer dollars to build a non-essential, privately run building would be “reckless” and that there are countless better uses for that city money. He questioned why the city would need to bail out the American Royal by providing $1 million annually for its utilities.

Cofran, a lawyer, also argued that the American Royal’s “peculiar” lease is not as controlling as the organization has suggested and urged the city to entertain other possibilities to preserve and fill Kemper Arena.

“Why should they be the only ones to get a bite at the apple?” Cofran asked about the city’s negotiations with the Royal.

Ford and Councilman John Sharp agreed that now is probably the right time to see whether anyone else has a better plan before the council makes a final decision on the American Royal’s request.

The city staff is expected to prepare a request for proposals, and the joint committee may take up the debate again in early December.

This story was originally published November 13, 2014 at 4:43 PM with the headline "American Royal plan for Kemper Arena prompts praise and skepticism."