OFFICIAL - Arena construction

[trailerkid]

I just don't see the connection. What does a hip cache have to do with building or maintaining a brand in the financial services sector?

Can't the same be said for SBC or Sprint and the communications industry? Choosing a phone service isn't exactly exciting. In StL, they have the Edward Jones Dome, right?

[KC0KEK]

Right, but none of those brands dominate their industries the way that Block's does. I don't see how having its name on an arena would be more effective than traditonal advertising in helping Block maintain that level of brand awareness.

[KC Kropf]

Think of it this way: What age group does their taxes at H&R Block? Compare that group with the age group that watches/attends college basketball events, concerts, etc. Hell, most college students still don't do their own taxes. Seeing and hearing about H&R Block Arena exposes a younger and newer market to their services. When it comes time for the younger market to grow up and do their own taxes, they have stronger brand reconigtion of H&R Block. Not only on a local scale but nationaly as well. When national events are held here, imagine the scenes of outside the arena. They will show a national audience the big green block on their HQ's and tons of people on the streets of KC. H&R Block gets not only recognized by having the name, they get recognized for their HQ being right next door.

[trailerkid]

Right, but none of those brands dominate their industries the way that Block's does. I don't see how having its name on an arena would be more effective than traditonal advertising in helping Block maintain that level of brand awareness.

SBC dominates the markets it is in because it is the hybrid of what was originally a bell. Cable and people like Birch and Sage have crept into their market, but SBC is still king. Maintaining that status still takes effort.

[KC0KEK]

C'mon. If I move from, say, the Northeast (Verizon territory) or Southeast (BellSouth land), who cares if I once watched the Spurs play at the SBC Center on TV? It's a non-factor. I need phone service, and unless the CLECs have done a good job of marketing themselves, I'm going to go with the ILEC. If any company should be putting its brand on arenas, it's the CLECs. They'll get more bang for their buck in terms of building mindshare.

Same with airlines. Watching the Bulls play at the United Center didn't raise my awareness that they exist or make me feel more inclined to fly them. Whether they have a flight and/or price that fits my needs are bigger issues.

[aknowledgeableperson]

All this talk about naming rights for a new arena is crazy. Some of the latest economic reports concerning naming rights really discount the advertising advantage for the company paying the fees. Yes, naming rights provides some funds but in the long run the arena derives more income from suite rentals and advertising placements around the arena - inside and out.
Why not discuss the companies or individuals that would be willing to pay for suites and advertising WITHOUT a NBA or NHL team, or just having the Big 12 once every five years if we are lucky. There would be few and that is one reason why they are having trouble finding financing for an arena. Not only are there not funds to build an arena but not enough revenue can be generated to pay both operating costs and debt service.
The economic impact is throughout the City area and in this case a lot of it outside of Kansas City, Missouri. That is why the City is having problems financing the arena.
As with the Chiefs and Royals, parking revenues are a major income stream for an arena. For our proposed arena downtown there would be little in the way of parking revenues going back to offset costs for the arena.
So about the only way to pay for an arena downtown would be for it to be part of Bistate II. And at this time I do not see it happening. Kansas City Missouri cannot do it by itself and Jackson County has its hands full with the Sports complex. And I believe most people in the Kansas City area believe that the Chiefs and the Royals are more important than a downtown arena.

[QueSi2Opie]

Maybe a piece of space junk will fall out of the sky and crash down on an empty Kemper Arena destroying it completely. Then we'd have to build a new arena!

[KCDevin]

that's where the stadium should go (if you remember the companies ideas)

[KCPowercat]

akp.....suite sales don't figure into to construction costs of any arena.

[QueSi2Opie]

Anybody hear Frank Boal's lil' comment last night on the 10 o'clock news? Had to love that, ey? Hopin' that after the 1st and 2nd Rounds of the NCAA are finished at Kemper, they'll "implode the thing." The other news anchors laughed.

[KC_JAYHAWK]

It's hard to believe but this arena thread has been going on since 2002, and I have a feeling it will continue into 2004 .....when is Barnes' term up?

[KC_JAYHAWK]

wait, we are already in 2004...I meant 2005

[ShowME]

Trust me Jayhawk this discussion will last well into the next decade. Hell St. Louis will probably build a new arena to replace the Savvis Center before we get anything new.

[KCK]

I saw the thing in the paper. Almost every city in the midwest, including Omaha, Oklahoma City, Tulsa have a brand new arena in the last 5 years. Our arena is going on 30 years old. I'm kind of torn on this one, we probably lost the big 12 indefinately after 2005, and I doubt too many NCAA events will be here with all the competing brand new arenas.

Did anyone see the picture of the new arena in Dallas? Good God that thing is beautiful, and it makes Kemper look like a rusty old bucket. Truthfully KC can't compete with Dallas, but we can compete with the smaller cities.

[trailerkid]

First off, this is not an inferior KC issue or an arena vs. stadium issue. KC is Big XII country and so far has NO rival when it comes to hosting the tournament...the arena itself is another topic.

Interestingly enough, the tournament in Dallas and KU's appearace on Friday is producing a damn-near firestorm of arena talk in the local sports world. Quotes from Eddie Sutton and the Big 12 commish mentioning a new arena in KC have been added as regular promo spots on 61Sports.

There are also threads emanating from Jayhawk country on Phog.net...
http://mb13.theinsiders.com/fkansasinsi ... 1543.topic

http://mb13.theinsiders.com/fkansasinsi ... 1567.topic

[tat2kc]

I agree 100% that KC needs a new arena. My question is: is it reasonable to assume that a high quality arena can be built without taxpayer support? I think people would be fired up about an arena, I am not sure at all that they'd want to pay for it.

[KCPowercat]

looking at some other arenas and how they were financed I found one thing very interesting.

2% ticket surcharge....why not throw 2% surcharge on all events? People that use it pay for it....

3% rental car tax in Atlanta gave them $62M for their arena....I'd figure KC could get about $30-40M with the same type of rental car tax


OK here is my financing plan.

$30M from H&R Block naming rights for 30 years.
$35M from 3% rental car tax
$75M G-O bonds and revenue bonds from KC Live
$20M 2% ticket surcharge (completely made up number)
$10M 1/2% restaurant surcharge
$30M ummmmmm (UMB donation of land?)

Well am I even getting close?

[KC Kropf]

http://www.ausport.gov.au/fulltext/1998 ... rwin23.htm

interesting paper on naming rights, advertising effect, and ecomomics of such.

[aknowledgeableperson]

looking at some other arenas and how they were financed I found one thing very interesting.

2% ticket surcharge....why not throw 2% surcharge on all events? People that use it pay for it....

3% rental car tax in Atlanta gave them $62M for their arena....I'd figure KC could get about $30-40M with the same type of rental car tax


OK here is my financing plan.

$30M from H&R Block naming rights for 30 years.
$35M from 3% rental car tax
$75M G-O bonds and revenue bonds from KC Live
$20M 2% ticket surcharge (completely made up number)
$10M 1/2% restaurant surcharge
$30M ummmmmm (UMB donation of land?)

Well am I even getting close?

You are assuming that H&R Block will do the naming rights - haven't seen anything from them that they are committed and also $30M appears to be a number pulled out of the air.
Right now the latest discussion on rental car tax was to go to the Convention Center.
Ticket surcharge will have to go to debt service with the debt service used for construction.
Restaurant Tax currently goes to the debt service for the Convention Center.
UMB donating the land?

All of the above taxes or surcharges would have to be voted on by the public after they were approved by the State Legislature.

Of course, there has been much discussion about building the arena but the second part of the equation is operating the arena after it is built. That is why Suites and Advertising revenues are important. Who will balance the budget if the arena does not generate enough revenue to cover operating costs and debt service? Why not discuss this issue also?

[KCPowercat]

You are assuming that H&R Block will do the naming rights - haven't seen anything from them that they are committed and also $30M appears to be a number pulled out of the air.
Right now the latest discussion on rental car tax was to go to the Convention Center.
Ticket surcharge will have to go to debt service with the debt service used for construction.
Restaurant Tax currently goes to the debt service for the Convention Center.
UMB donating the land?

All of the above taxes or surcharges would have to be voted on by the public after they were approved by the State Legislature.

Of course, there has been much discussion about building the arena but the second part of the equation is operating the arena after it is built. That is why Suites and Advertising revenues are important. Who will balance the budget if the arena does not generate enough revenue to cover operating costs and debt service? Why not discuss this issue also?

Assuming H&R Block will name the thing comes from them wanting first chance to name the arena in the deal they signed when coming downtown.

The $1M/Year number comes from a rough average of other naming contracts I researched.

Rental car taxes to the Convention Center? Never seen that. Rental Cars have always been one of the prime targets for the arena. the Convention Center ballroom already has it's money coming in from hotel taxes.

UMB donating the land was half a joke....I was just looking for somewhere to get me $30M.

I admit I'm not the mayor or the one who has to figure out this financing....so my numbers mean absolutely nothing. What do you mean by the ticket surcharge would have to go to debt services? I guess I'm unfamiliar with that part of funding public projects.

True, restaurant and rental car taxes would need to be put before the public....nobody said different. Approval by the state legislature not sure about...I believe laws have been passed so things like this can go through w/o the legislature seeing them....went through last year.

Operation costs are obviously part of this. Suites and advertising are of course important. A privately managed arena can easily turn a profit for the city, much more than just breaking even.

We can discuss all issues....this topic has went on for 12 pages, we had to be discussing something.