Cratedigger wrote: ↑Wed Feb 01, 2023 8:45 am
DaveKCMO wrote: ↑Wed Feb 01, 2023 7:34 am
Isn’t this a really big ownership group? Like dozens of big names? It’s certainly possible to hit a billion, especially if some of it is debt financed by others.
But yeah, put yer cards on the table.
Just because I think it's interesting here's the list from the business journal. It's kind of a who's who of local business leaders.
- John Sherman, co-founder of Inergy LP, is now chairman and CEO of the Royals.
- Brooks Sherman, no relation to John Sherman, is a former president of Inergy.
- Paul Edgerley is a former managing partner of Bain Capital in Boston. He teamed up with college buddy Terry Matlack to found a new private equity company called VantEdge Partners LP in 2016.
- Terry Matlack is a co-founder of Tortoise Capital Advisors, an oil and gas investment company based in Leawood. Matlack and Edgerley are co-founders and managing directors of VantEdge Partners.
- Bill Gautreaux is a former president of Inergy. He stayed with the company after it was sold, working as chief marketing officer and president for Crestwood Equity Partners LP's marketing, supply and logistics group in Kansas City.
- Carl Hughes is a former senior vice president of business development at Inergy.
- The Dunn family founded and owns a majority of JE Dunn Construction Co., which is the fifth-largest private company in the Kansas City area, with $3.58 billion in annual revenue in 2018. The company also is listed as an owner of the team.
- The Lockton family founded and owns Lockton Cos. Inc., the largest independent, privately-owned insurance brokerage in the world. The Kansas City-based company generated $1.72 billion in revenue in 2018, making it the area's second-largest family-owned business, behind only Hallmark.
- Michael Haverty is a former CEO of Kansas City Southern (NYSE: KSU). The company generated $2.7 billion in revenue in 2018 and has 7,300 employees.
- Peter and Veronica Mallouk are the owners of Creative Planning Inc., an Overland Park-based financial planning company that manages about $45 billion in assets for clients.
- Rob Kaplan is a former Wall Street banker and chairman of the Dallas Federal Reserve. He is now co-chair of the Draper Richards Kaplan Foundation, which is focused on social entrepreneurship and venture philanthropy.
- Alan Atterbury is the former CEO of Midland Loan Services Inc., a giant commercial mortgage loan firm acquired by PNC Bank Corp. for $391 million in 1998.
- J.B. Hebenstreit is a former president of Bartlett & Co., which was the area's 12th-largest private company, generating about $2 billion in annual revenue, before it was acquired by Savage Cos. in 2018.
- Don Wagner is a longtime private-equity investor and former CEO of Kansas City-based CST Industries Inc. (which was originally known as Columbian Steel Tank).
- Mariner Kemper is chairman and CEO of UMB Financial Corp. (Nasdaq: UMBF), the parent company of the second-largest bank based in the Kansas City area.
- Kent McCarthy is founder of Jayhawk Capital Management LLC, an investment management firm based in Shawnee with about $61.7 million in assets.
- Eric Stonestreet is a famous actor, who is best known for playing Cameron Tucker on "Modern Family." He is originally from Kansas City, Kan., and graduated from Kansas State University.
- Jay Pack is president of Pack Family Partnership.
- Dan Dees is co-head of investment banking at Goldman Sachs.
- Mark Demetree is chairman of MCD Investments LLC
Plus Mahomes and a few LLCs (PJM Baseball LLC, Seventh Inning Stretch LP and PlayBallKC LLC) that I don't think are a significant portion of the ownership group.
There's no way Sherman is doing a capital call on the ownership group. But does organizing financing for the district really seem out of question for this group?
Again, let's look at the owner group here. Among them are people heavily experienced in capital investment, private equity, insurance, real estate trusts, and banking. All of the development will occur in an opportunity zone which allows investors to plow capital into the development and reap all the profit from it tax-free after 10 years. The owner group has individuals in it who have a lot of say in where they locate their business offices. Creative Planning alone rents three buildings in Overland Park. They alone could occupy a 20-story tower if one includes parking garages.
Lockton has over 1200 employees in the KC metro and about 750 work at their Plaza offices.
There is a lot of marketing potential to having your corporate signage on a building in view of stadium TV cameras.
There is a lot of opportunity to make money in this project that didn't exist in the P&L District. If you can build an office or residential tower and roll the rent profits into a real estate trust for 10 years tax-free, that is a big upside. If the buildings are sold at the end of 10 years, it appears the appreciation of the asset would likely also be untaxed.
We see apartment buildings constructed and sold to outside real estate investors all the time. Arterra and Reverb were both sold after they were built and leased up.
One thing that is not being discussed is how low-income housing will be done. What I expect will happen is that the low-income housing units will have an end date where the unit falls out of the low-income designation at some point and can then go to market-rate housing. When Quality Hill was redeveloped, there was a percentage of units designated low-income eligible. I don't know the exact number. It could have been anywhere from 10-20 percent of some buildings for 20 years. At the end of the term, those units are converted to market rate. I see this happening in the East Village.
HUD money was part of the mix in the Quality Hill redevelopment--probably through a cheap financing deal.
Another party that is not mentioned above but who might invest in the project somewhere is Americo and Michael Merriman.