Downtown Baseball Stadium

[GRID]

Cardinals draw 40k a game and have huge corporate season ticket support which makes tickets trickle down to casual fans from already sold tickets. KC can barely draw 15k and has almost no corporate season tickets at least compared to the Cards.

FYI, I'm starting to see friends and family that live in suburban Jackson County come around a bit on a downtown stadium. I think it's the proposed surrounding development that is making a difference. I hope they can pull that off and it doesn't take 30 years to build out the area around a stadium.

I don't see why it would take long at all for the Royals/partners to build it out. They say they're putting up $1 bil specifically for the district side of the equation, then what are they waiting for once the stadium gets its public funding? I don't see why they'd not build some along with the stadium going up. I don't see Sherman messing around on the district end. He might even care about that more than stadium itself from all indications.

They will be waiting for it to actually be profitable to build. Sherman is presenting himself as a downtown booster here, but he is first and foremost a businessman, he's not going to dump a billion dollars into a bunch of vacant buildings. If downtown growth accelerates or if Sherman and his investors have a higher risk appetite and are more aggressive, then maybe stuff will go up more rapidly than we have seen Cordish doing with P&L, but overall, the P&L buildout is probably the gauge by which we should be setting at least our initial expectations for how fast the Royals build their district, if in fact they ever end up actually building anything.

That's what I see. The stadium opens with a very small retail district with a couple of bars/restaurants. I honestly do not see anything else being constructed along side the stadium. After that, it will likely take five years for a single residential building to go in the area and I seriously doubt it's anything more than a 5-6 story building. Especially if they are pushing the "affordable housing" issue. A market rate tower with a garage (hopefully underground) will need massive incentives and even then they take a long time to go up (see Cordish). Is KCMO going to give incentives? At least the garage can be shared with the stadium, so maybe there is that.

I'm just being realistic here based on development in KC for the last 50 years.

Still gotta try to get something going though. The city gets nothing out of having its MLB stadium at the TSC.

[rxlexi]

I understand and somewhat agree with the skepticism re: surrounding development opening along with, or shortly after, the stadium, but I imagine they will try to have a hotel, and small retail and office district up pretty quickly.

I really think the idea they're shooting for is something like a smaller/denser Battery Atlanta - a portion of the stadium itself will be designed to open directly into the district, with hotel (maybe office) looming over the outfield.

The fact that the entire development area is an Opportunity Zone (thanks Fang) is encouraging, and is a mechanism that didn't exist for P&L. Ownership can dump outside investment gains into this development, plan to hold long term (10+ years), and essentially avoid paying taxes on them, plus continuing to have equity in a major KC entertainment destination (hopefully).

We shall see - can't wait to see more solid plans to have a better idea what to expect here...

[TheUrbanRoo]

I understand and somewhat agree with the skepticism re: surrounding development

Again my view is
a.) Sherman has basically only been talking about this district (more than the stadium) and how we need to grow urban fabric
b.) He's breaking the Royals lease way early, showing he doesn't wait around on what he's wanting to do with this project
c.) He's pledging a billion $ to the district side of it

Just my hunch but I would bet the Under on any proposed timeline here for the district based on how Sherman has spoke and acted about this. If he was like David Glass or waiting till 2031 to do anything because "we need to take our time to think about our options" or something dumb like that then I'd agree with you. But he seems like he moves as fast as he is able to.

[beautyfromashes]

And then perhaps there is potential for highway reconstruction, land bridges, etc. that close or minimize the freeway gap to the east (and "reconnect" a blighted/under-served neighborhood) with federal $$?

This could happen with a joint stadium/North Loop rebuild too….just sayin.

[normalthings]

Something different from STL’s BPV is that this ownership group had their hands in numerous local and global businesses that could be potential tenants for office at Royals District.

Office is something they have specifically mentioned at this meeting.

[FangKC]

This is speculation on my part, but one might see some of the team owners moving their business offices into the stadium district. This might include:

VanTrust (moving from the Plaza)
Lockton (moving from the Plaza)
Creative Planning (moving from Overland Park)

The stadium district might also include parcels we aren't thinking of now as part of it. Once the Jackson County Jail complex is demolished those parcels might be developed since they are in the opportunity zone east of Oak Street. Also included would be the surface lots north of the AT&T Longlines Building and south of the Interstate Building (Holiday Inn Express) and 1301 Oak.

[Cratedigger]

This is speculation on my part, but one might see some of the team owners moving their business offices into the stadium district. This might include:

VanTrust (moving from the Plaza)
Lockton (moving from the Plaza)
Creative Planning (moving from Overland Park)

For sure maybe. But also this seems like the kind of development that might interest companies looking to relocate in KC. To extend your thought, maybe a portfolio company an owner is invested in?

[beautyfromashes]

This is speculation on my part, but one might see some of the team owners moving their business offices into the stadium district. This might include:

VanTrust (moving from the Plaza)
Lockton (moving from the Plaza)
Creative Planning (moving from Overland Park)

The stadium district might also include parcels we aren't thinking of now as part of it. Once the Jackson County Jail complex is demolished those parcels might be developed since they are in the opportunity zone east of Oak Street. Also included would be the surface lots north of the AT&T Longlines Building and south of the Interstate Building (Holiday Inn Express) and 1301 Oak.

This is why I think this development and the movement of the stadium downtown will begin the transformation of the area from speculation to on fire mega buildout. Sure, there are those of you on here who have been pushing a changing downtown for decades and seem incremental building and improvement. But, there are people who drive full expansion of development in areas that won't even start being interested until development has already happened for many, many years. They pay the increased price for land over the trough knowing they can ride the wave up. They will build at breakneck speed, buying up property and developing it very, very quickly because they know the risk is now marginal. They will inspire others to the "gold rush". Get this project approved and getting a streetcar, airport, P&L and Sprint Center in a few decades will look like a snail's pace.

[langosta]

This is speculation on my part, but one might see some of the team owners moving their business offices into the stadium district. This might include:

VanTrust (moving from the Plaza)
Lockton (moving from the Plaza)
Creative Planning (moving from Overland Park)

For sure maybe. But also this seems like the kind of development that might interest companies looking to relocate in KC. To extend your thought, maybe a portfolio company an owner is invested in?

Dan Dees is co-head of Investment Banking at Goldman Sachs. The current CEO, David Solomon, held the same position until 2016. So you could see a co-owner of the Royals also being the CEO of one of the most well known US businesses in a few years time.

[Anthony_Hugo98]

This is speculation on my part, but one might see some of the team owners moving their business offices into the stadium district. This might include:

VanTrust (moving from the Plaza)
Lockton (moving from the Plaza)
Creative Planning (moving from Overland Park)

The stadium district might also include parcels we aren't thinking of now as part of it. Once the Jackson County Jail complex is demolished those parcels might be developed since they are in the opportunity zone east of Oak Street. Also included would be the surface lots north of the AT&T Longlines Building and south of the Interstate Building (Holiday Inn Express) and 1301 Oak.

This is why I think this development and the movement of the stadium downtown will begin the transformation of the area from speculation to on fire mega buildout. Sure, there are those of you on here who have been pushing a changing downtown for decades and seem incremental building and improvement. But, there are people who drive full expansion of development in areas that won't even start being interested until development has already happened for many, many years. They pay the increased price for land over the trough knowing they can ride the wave up. They will build at breakneck speed, buying up property and developing it very, very quickly because they know the risk is now marginal. They will inspire others to the "gold rush". Get this project approved and getting a streetcar, airport, P&L and Sprint Center in a few decades will look like a snail's pace.

This is exactly it. I don’t think people quite understand how exponentially development will occur as soon as this stadium project comes to fruition. It’s not THE project to remake downtown, which helps to set it apart greatly from many of the previous comparison projects as well. Instead of being on the pendulum back swing, this project is riding the pendulum forward, and everything will accelerate with it

[DaveKCMO]

This is speculation on my part, but one might see some of the team owners moving their business offices into the stadium district. This might include:

VanTrust (moving from the Plaza)
Lockton (moving from the Plaza)
Creative Planning (moving from Overland Park)

The stadium district might also include parcels we aren't thinking of now as part of it. Once the Jackson County Jail complex is demolished those parcels might be developed since they are in the opportunity zone east of Oak Street. Also included would be the surface lots north of the AT&T Longlines Building and south of the Interstate Building (Holiday Inn Express) and 1301 Oak.

Got me thinking, for sure...

[TheUrbanRoo]

This is speculation on my part, but one might see some of the team owners moving their business offices into the stadium district. This might include:

VanTrust (moving from the Plaza)
Lockton (moving from the Plaza)
Creative Planning (moving from Overland Park)

The stadium district might also include parcels we aren't thinking of now as part of it. Once the Jackson County Jail complex is demolished those parcels might be developed since they are in the opportunity zone east of Oak Street. Also included would be the surface lots north of the AT&T Longlines Building and south of the Interstate Building (Holiday Inn Express) and 1301 Oak.

This is why I think this development and the movement of the stadium downtown will begin the transformation of the area from speculation to on fire mega buildout. Sure, there are those of you on here who have been pushing a changing downtown for decades and seem incremental building and improvement. But, there are people who drive full expansion of development in areas that won't even start being interested until development has already happened for many, many years. They pay the increased price for land over the trough knowing they can ride the wave up. They will build at breakneck speed, buying up property and developing it very, very quickly because they know the risk is now marginal. They will inspire others to the "gold rush". Get this project approved and getting a streetcar, airport, P&L and Sprint Center in a few decades will look like a snail's pace.

This is exactly it. I don’t think people quite understand how exponentially development will occur as soon as this stadium project comes to fruition. It’s not THE project to remake downtown, which helps to set it apart greatly from many of the previous comparison projects as well. Instead of being on the pendulum back swing, this project is riding the pendulum forward, and everything will accelerate with it

Yep. That's what I've been trying to say as well. This one seems promising.

[beautyfromashes]

This is exactly it. I don’t think people quite understand how exponentially development will occur as soon as this stadium project comes to fruition. It’s not THE project to remake downtown, which helps to set it apart greatly from many of the previous comparison projects as well. Instead of being on the pendulum back swing, this project is riding the pendulum forward, and everything will accelerate with it

Yep, critical mass. The REALLY interesting thing that will happen is the messaging that will come out of, "John Sherman rebuilt Kansas City's downtown!". It will rightfully so make some of the original downtowners blood boil. But, it's inevitable. Those that push the ball across the goal line undoubtedly get credit for the touchdown even if someone else covered the majority of the ground.

[WoodDraw]

This is speculation on my part, but one might see some of the team owners moving their business offices into the stadium district. This might include:

VanTrust (moving from the Plaza)
Lockton (moving from the Plaza)
Creative Planning (moving from Overland Park)

The stadium district might also include parcels we aren't thinking of now as part of it. Once the Jackson County Jail complex is demolished those parcels might be developed since they are in the opportunity zone east of Oak Street. Also included would be the surface lots north of the AT&T Longlines Building and south of the Interstate Building (Holiday Inn Express) and 1301 Oak.

This is why I think this development and the movement of the stadium downtown will begin the transformation of the area from speculation to on fire mega buildout. Sure, there are those of you on here who have been pushing a changing downtown for decades and seem incremental building and improvement. But, there are people who drive full expansion of development in areas that won't even start being interested until development has already happened for many, many years. They pay the increased price for land over the trough knowing they can ride the wave up. They will build at breakneck speed, buying up property and developing it very, very quickly because they know the risk is now marginal. They will inspire others to the "gold rush". Get this project approved and getting a streetcar, airport, P&L and Sprint Center in a few decades will look like a snail's pace.

This is exactly it. I don’t think people quite understand how exponentially development will occur as soon as this stadium project comes to fruition. It’s not THE project to remake downtown, which helps to set it apart greatly from many of the previous comparison projects as well. Instead of being on the pendulum back swing, this project is riding the pendulum forward, and everything will accelerate with it

People said this about the street car and about sprint center. I don’t need to tell you about the surface lots still sitting there.

These developers will develop as they’re able to get funds and the markets support.

The businesses moving thing was a good point I didn’t think about, but moving around the city doesn’t excite me. If the big investment is moving offices from the plaza to downtown with City subsidies…

[TheUrbanRoo]

The businesses moving thing was a good point I didn’t think about, but moving around the city doesn’t excite me. If the big investment is moving offices from the plaza to downtown with City subsidies…

Step 1: empty all Plaza office space into the the Royals office space downtown

Step 2: Claim the new empty Plaza office is suburbanite dream and suddenly fill it all back up

[normalthings]

Nashville has grown exponentially in the last 10 years. Convention Center is a big project I would point to that launched things but of course there was much much more and over many decades. Sprint Center and Street Car absolutely accelerated things from 0 to 5 and then to 15. COVID/Politics put things on pause but additional projects will only work to further accelerate downtown's growth. A stadium + district that includes office commitments has a real chance of being what accelerates KC to 60

Attracting jobs from other parts of the city or metro downtown will help with downtown residential and hotel development. We probably would have a downtown 5 star by now if our businesses and attractions were not so spread out.

[WoodDraw]

I have a lot of respect for the people disagreeing with me in this. I always like to see money before I believe things.

I’ll happily have a beer over crow in an east village bar after a royals game.

[TheUrbanRoo]

the kind of development that might interest companies looking to relocate in KC. To extend your thought, maybe a portfolio company an owner is invested in?

Honestly, getting some employment base moved from JoCo over to downtown feels almost as big of a win as getting it from anywhere else in this country. JoCo & the rest of this country certainly view downtown the same way anyway...so a win's a win if we snatch them.

[FangKC]

The big question is if the Feds are willing to sell their surface parking lot between Charlotte and Holmes, 12th and 13th streets.

A possible scenario is that Van Trust demolishes the jail complex (retaining the county's art deco Juvenile Courts building) and uses most of that block to provide temporary parking for the Feds. Then the Feds parking lot will be redeveloped with structured parking as part of a mixed-use development. The Feds will have access to that parking. After 5 pm and on weekends, Royals fans can park in that garage. Once that is accomplished, the former jail complex block gets redeveloped.

[FangKC]

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.