As time passes, hopes for arena dim
Financing questions continue to bedevil downtown project
By JEFFREY SPIVAK and LYNN HORSLEY The Kansas City Star
One year ago this month, Kansas City's plan for a new downtown arena was supposed to be unveiled.
Today, it still is not ready, and there is growing skepticism that Kansas City can even do the project.
The arena appears caught in a financial bind. Mayor Kay Barnes has promised to build it without a general tax increase or public referendum. Yet consultants and planners can't put together a solid financing plan without significant public funding, according to several officials involved in the discussions.
“I don't know how you get from $0 to $200 million without some really creative financing, and I haven't seen that surface yet,” said Bill Lucas, president of Crown Center and chairman of the Greater Kansas City Sports Commission. “The arena is a great idea searching for money.”
Barnes insists that progress is being made and that a new arena remains a “top priority.” She has promised it will get built during her term in office, which ends in 2007.
Meanwhile, an arena implementation committee has not met in months while it waits for a financial plan from the mayor. Last spring, Barnes insisted the plan was coming “without delay.” Last fall, she said it was coming “in the next few weeks.” Now she says the plan will be done “within the next several weeks.”
No matter when that happens, Barnes must overcome another hurdle: The City Council may not support it. The Kansas City Star informally surveyed the 12 other council members on the project. Two-thirds indicated neither they nor their constitutents were too interested in the arena — even if it didn't include a tax increase.
Summing up the general feeling, Councilman Terry Riley said: “Right now, we just don't have the financial wherewithal to make that happen.”
Barnes remains optimistic.
“Any judgments on the merits would be premature. I think it will become abundantly clear that this is a very important part of the fabric of downtown,” she said.
But Kansas City may be running out of time. The Big 12 Conference is expected this spring to solicit proposals from cities to be the hosts for future men's basketball tournaments. Because other Big 12 markets, such as Dallas and Oklahoma City, have opened new arenas, local sports officials contend Kansas City cannot consistently win the tournament with an outdated Kemper Arena. So Barnes, in a meeting with Big 12 officials late last year, vowed to include a new arena in Kansas City's bid.
Momentum for a new arena gained steam 15 months ago. That was when Barnes, standing on a podium surrounded by photographs of new arenas in other cities, released the findings of a consultant's study on Kansas City's need for its own new arena.
The study concluded that the Kansas City area could attract more high-profile entertainment shows, as well as retain major college tournaments, with a new facility. The study envisioned a venue seating 18,000 to 19,000 people and costing $170 million to $200 million, offering upgraded features ranging from plusher seats to higher ceilings than Kemper.
Barnes used the occasion to announce a “phase two implementation committee” consisting of 20 city, sports and business officials. She gave them the responsibilities of picking a site and developing a financing plan. She also set a deadline for that work: March 31, 2003.
Then the waiting began.
When the March deadline passed, Barnes blamed delays on consultants with Minneapolis–based Conventions, Sports & Leisure International. They were busy on other things, she said. But arena committee members said another reason involved the quest for new state legislation, called the Missouri Downtown Economic Stimulus Act, or MoDESA.
This legislation proposed allowing cities to use some state tax revenues for financing public projects in downtown areas. And the consultants' preliminary phase two study showed tax revenues generated from the legislation could finance the arena's construction.
The legislation passed in May, but with a big catch: The money could not be used for a large arena.
“Did we hit a bump in the road with MoDESA? Yes,” acknowledged Kevin Gray, president of the sports commission. “We had to go back to the drawing board on the arena.”
While that was happening, Barnes and other city officials also worked on complementary plans to develop a downtown headquarters for H&R Block Inc. and create a restaurant-retail entertainment district at the south edge of the freeway loop. Barnes said those projects were interwoven with the arena, with the district's revenues integrated in an arena financing plan. She expected “concrete details” on the arena and entertainment district to be announced at the end of 2003.
Then in December came the simultaneous announcements of a proposed skyscraper for H&R Block at 13th and Main streets and a seven-block entertainment district adjoining it. No arena plan accompanied them.
For Barnes, there is no mystery why the arena plan has not materialized.
“I've been very clear all along about why we are taking this amount of time,” she explained last week. “We needed to wait until we got the H&R Block and entertainment district proposals far enough through the process that we were clear on the financials … and we're still working on that.”
Yet some progress has been made. The mayor's committee has identified 14th Street and Grand Boulevard as the preferred site. UMB Bank controls much of the land there, but chief executive R. Crosby Kemper III said last week that UMB had not had any discussions with city officials or arena planners in at least six months.
The main hang-up on the rest of the arena plan is how to raise so much money without resorting to traditional financing methods, such as a sales tax or bond issue requiring voter approval. Officials and analysts involved in the project have examined several sources, ranging from car rental taxes to restaurant taxes, from private-sector naming rights to income from a proposed college basketball hall of fame inside the new arena.
Still, a gap of tens of millions of dollars remains.
The financing stalemate reached a point where one local official even quietly visited Jefferson City last month to inquire about modifying the MoDESA legislation so its special tax breaks could be applied toward an arena. That idea was rebuffed.
Today, the lack of an announced plan has led to a public perception that the arena is not going to happen.
At www.kcskyscrapers.com, a Web site where the issue has its own forum, participants recently posted messages such as this: “How is Barnes going to get this arena thing done?”
The Web site's administrator, Cody Hickman, summed up the forum's mood: “Overall, everybody is getting impatient at this point.”
Include Barnes in that group.
“There is no one who is more impatient than I am related to the arena,” the mayor said, then added: “We're going to do it and do it right, and in the right time frame.”
To reach Jeffrey Spivak,
civic affairs reporter,
call (816) 234-4416 or send e-mail to jspivak@kcstar.com.
To reach Lynn Horsley,
City Hall reporter,
call (816) 234-4317 or send e-mail to lhorsley@kcstar.com.
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First glance
• A year ago, Mayor Kay Barnes promised plans for a new downtown arena, but there is growing skepticism that she can find the money.
• Barnes insists that progress is being made and that at the right time she will reveal how she plans to pay for a $170 million to $200 million arena without a tax increase.
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