American Royal leaders propose tearing down Kemper

[kboish]

http://www.bizjournals.com/kansascity/n ... emper.html

Foutch Brothers LLC plans to buy the West Bottoms arena, which fell largely out of use upon construction of Sprint Center, Steve Foutch said. Once Kemper Arena is acquired, the building will be converted into a regional hub for youth and amateur sporting events as well as a variety of fitness, education and healthy lifestyle activities.

Foutch said that renovation plans and costs have been reviewed by city officials and that several partners had agreed to partcipate in the deal. They include local entrepreneurs, professional athletes, youth club sports teams, retail and concessions firms, and a health clinic.

I have a feeling this may be in connection with the planned/wanted for US Soccer Men's National Team Training and Coaches facility SportingKC spoke about last year. I had heard from a couple of people they were looking at the West Bottoms. This would probably span the border there south of 670 and be a "bistate" facility.

http://www.ussoccer.com/news/federation ... enter.aspx

This is a MUCH better use than tearing it down and building a new horse arena for the Kempers...

but, we also haven't yet heard how much $$$ they are asking for to execute this.

[knucklehead]

Sounds great.

In my view, an indoor amatuer sports facility is a great use for Kemper. One thing that would be good if feasible, is an indoor hockey rink with seating for about 2,000 people. Indoor tennis courts would be nice to.

Parking needs would be small - but I suppose the large parking lots would have to remain for the American Royal barbeque.

It will be interesting to see how much usable space they can create. Pretty much have to add another inside floor about the current arena floor to create enough space if you keep a hockey rink. Don't know if that is feasible.

[AllThingsKC]

Developer has plan to save Kemper Arena, but American Royal isn't interested.

[loftguy]

Developer has plan to save Kemper Arena, but American Royal isn't interested.

"We continue to be very supportive of the plan that the Kempers outlined in October 2011," American Royal CEO Bob Peterson said.

When asked whether the American Royal Association's lease could block Foutch Brothers LLC's plan to buy and renovate the existing arena, Peterson said, "you would think so."
If it doesn't, he said, the association may take its equestrian center plans to another city.

The tactic of publicly threatening to leave a city, as a negotiating tool, is bad form and sometimes dangerous.

I love the history and the existance of the American Royal in Kansas City.

I used to love my ex-wife, too.

[taxi]

This is amazing. I haven't followed the saga very closely, but who the hell gave them such a long lease? I say horseshit.

[Eon Blue]

So the American Royal, who holds three yearly events at the arena is not in favor of a plan that would not give them $30 million from the city and would kick them out? Did I read that correctly?

If we truly have a deal on the table for someone to buy the arena, renovate it and activate both it and the surrounding area, how do we not grab that with both hands? Barring an insane demand for public money, of course.

[shinatoo]

Historically significant building that should be saved if possible. Blinders belong on horses. Bob Peterson should know that.

[KCMax]

Developer has plan to save Kemper Arena, but American Royal isn't interested.

I have some sand they can pound.

[FangKC]

Kemper Arena advances past first step in obtaining historic designation.

The Missouri Advisory Council on Historic Preservation on Friday approved a nomination for registration prepared by Kansas City consulting firm Rosin Preservation LLC.

http://tinyurl.com/o8y97z9

[knucklehead]

This is amazing. I haven't followed the saga very closely, but who the hell gave them such a long lease? I say horseshit.

My guess is the rent on the lease is probably $1 a year or something like that.

Not sure leases like that are actually enforceable. In any event, my guess is the extremely low rent would mean damages for early termination would be small $.

Don't think Royal could credible claim the lease was the result of arms length negotiations.

[FangKC]

Steve Paul

Two visions conflict over Kemper Arena’s future

http://tinyurl.com/o5lubsl

I don't see why the City can't sell Kemper to the private developer for the youth sports complex, and the American Royal can build their new facility on that large surface parking lot to the east of Kemper.

The City then doesn't have to pay to demolish Kemper Arena. The American Royal gets their new, smaller facility, and Kemper as a youth sports complex brings another civic amenity to the West Bottoms.

The surface parking spots lost to the new American Royal facility could probably be made up elsewhere by reworking city streets in the area to accommodate additional parking. There are decorative medians of grass that could be removed and converted to slot street parking, as well as other right-of-ways, grassy islands removed. Shuttle buses could also run from other surface lots existing in the area.

[KCMax]

I don't see why the City can't sell Kemper to the private developer for the youth sports complex, and the American Royal can build their new facility on that large surface parking lot to the east of Kemper..

My thought exactly. I mean if there's one thing the West Bottoms has a shortage of, its not empty land.

[FangKC]

I guess we aren't the only one who thinks this is the solution.

Foutch, however, said the American Royal’s goals can be achieved without bulldozing Foutch Brothers LLC’s plan — and Kemper Arena.

“I’m not sure why they are so intent on building exactly on the (Kemper Arena) site,” Foutch said, noting that “there is plenty of room to the east” for the buildings the American Royal wants to add to its West Bottoms complex.

http://tinyurl.com/ny7rhzf

[KCKev]

Give Kemper Arena a 40th Anniversary Party!!!
https://www.facebook.com/groups/611834042230471/

[aknowledgeableperson]

This is amazing. I haven't followed the saga very closely, but who the hell gave them such a long lease? I say horseshit.

Was on city staff at the time and furnished some financial info. Compared to the lease that the city had with the AR at the time the newer lease was a better deal for the city.

One has to go through the history of the relationship between the two to understand how the newer lease evolved. Remember, if it wasn't for the AR Kemper would not have been built in the first place. And Kemper was built to house a hockey team, a basketball team, and the AR. And after 20 years of the three only the AR remained. AR's ties to Kemper Arena was a general obligation bond issue approved by the city's voters in the 50's for an arena to house the AR and the donation of funds by the Kemper family through the AR for the arena's construction. And don't forget the donation of land by the AR. City leaders and the AR were both interested in a revised long term lease. The city and the AR both have a ton of money invested in the area.

[chaglang]

Ah, back when we built arenas for NHL and NBA teams that actually existed. Thems was the days!

[herrfrank]

The Kansas City Kings were here for what, 10 years? I was in high school when they moved to Sacramento. The NHL KC team was gone already in grade school as I recall.

Kemper Arena has been under-utilized for 30 years. The American Royal leadership needs to acknowledge the facts on the ground and accommodate the city rather than v.v.

[knucklehead]

Thanks for the history AKP, but the information you posted doesn't really explain why AR had the negotiating leverage to get a 30 year lease for a relatively low annual rental payment.

The preexisting lease could be a reason why AR had leverage, but you provide very little actual information about it. When was the lease set to expire? How much higher was the rent under the renewal? Exactly what terms were "much more favorable to the city?"

Most of the other reasons you give are political reasons, not business reasons. That would be like saying the Plaza should give some temporary seasonal store a 30 year lease renewal at a rental rate that is based on two weeks of use a year because the temporary pop up store has been on the Plaza for the last 20 christmas seaons. That doesn't happen in the real world. When the lease is up, leases are generally renewed at market rates, not rates that are well below market - and the landlord definately does not lock up a facility for 30 years in exchange for two weeks of rent a year. Why would the landlord give up a its rights to find a new use (permanent tenant or rebuild) for a building for 30 years to get guaranteed rent for two weeks a year?

I continue to suspect the lease negotiations were not arms length negotiations in a business sense.

Options are valuable. No landlord would restrict its ability to find another use for a facility such as Kemper for 30 years for a relatively nominal rent stream based on two weeks a year of use. What would be their incentive to do that? In other words, opportunity costs are important to asset owners. They don't give up a substantial portion of the rights accruing to ownership unless they get valuable concessions in return. One method used by owners to finesse that is to include a relatively low liquidated damages penalty for early lease termination. If that wasn't done it is a clear indication of either incompetence on the city's part or a lack of arms length negotiations.

I fail to see what the city got that was worth tying Kemper up for 30 years. Please clue us in.

Was the Royal theatening to shut down if it didn't get a 30 year lease for Kemper? Why would that threat make sense? Empty threats are not worth much in the real world. Also what would it say about the Royal's management. It would say they play hardball. So why would anyone play softball on the other side?

The possibility that the city would replace Kemper with another arena in another area of town within the 30 year time frame had to be anticipated. If not the city's negotiators were stunningly incompetent. It would be easy to craft terms to cover that situation which would allow coversion of Kemper into other uses (including tear down). Was that done? If not, why not?

[aknowledgeableperson]

"The preexisting lease could be a reason why AR had leverage, but you provide very little actual information about it. When was the lease set to expire? How much higher was the rent under the renewal? Exactly what terms were "much more favorable to the city?""

The original lease entered into in the 70's was a long term rental that had the AR paying zero rent. It has been well over 10 years so memory is a little vague but the term was for 40 or 50 years, I believe (I lean to 50). The new agreement did provide a rent payment to the city if the AR's revenues exceeded a base amount. The zero rent in the first lease was to take into account the AR's contribution to the construction of Kemper in the first place. And that continued with the new lease. Don't forget, many prime users of facilities throughout the land pay no or little rent. And back then the AR shows were a major income stream to the complex with concessions and parking.

One has to remember that a decision is made with the information one has on hand when the decision is made. And when that decision was made the SC was not even in the minds of those involved. This lease renewal was done about the time of Kemper's expansion so the thought was Kemper was to be the city's main arena for an extended period of time.

Not saying building the SC was a mistake. The mistake that was made, though, was not having some plans for the future of Kemper in place.

Knowing what is know now would the city entered into this agreement? Probably not. And one can argue it wouldn't have expanded Kemper when it did nor build as large of a garage in the West Bottoms.

[im2kull]

Why exactly does the AR want to demolish Kemper? Can they not host a rodeo or any other event in Kemper? Come on, the place has hosted almost anything and everything over the last 40 years! NBA, NHL, AFL, The Final Four, Concerts, The Circus, and yes...even the American Royal! In fact, it STILL hosts the American Royal! Are they simply tired of seeing so many empty seats? Why else would they turn away from a structure that can hold nearly 20k people and beg for one that could only hold 5k??