American Royal leaders propose tearing down Kemper

[FangKC]

Yes, I've noticed that Kemper doesn't even get the monster truck rallies or the PBR rodeo. Even those go to Sprint Center.

[shinatoo]

What NBA or NHL team is going top want to play in an arena without auto flush toilets?

[KCKev]

KC Roller Warrior raves. They dont flush.

[KCMax]

They've discovered that concerts are more profitable, so they have no reason to market our arena.

that decision has been good for KC too. It's not like the arena is dead. it's one of the busiest in the US after all.

Busiest arenas for concerts. Pollstar numbers do no include tickets sold for sports tenants. SC should be one of the busiest concert arenas - its probably the nicest sports arena in the country with absolutely no regular sports tenant. Overall, the fact that SC is at least 40 filled dates behind other arenas with sports tenants means it does not have as full of a schedule overall.

[KCMax]

Mariner Kemper says time to tear the sucker down.

Family says it’s time to move on, past Kemper Arena

[flyingember]

They've discovered that concerts are more profitable, so they have no reason to market our arena.

that decision has been good for KC too. It's not like the arena is dead. it's one of the busiest in the US after all.

Busiest arenas for concerts. Pollstar numbers do no include tickets sold for sports tenants. SC should be one of the busiest concert arenas - its probably the nicest sports arena in the country with absolutely no regular sports tenant. Overall, the fact that SC is at least 40 filled dates behind other arenas with sports tenants means it does not have as full of a schedule overall.

who cares about number of dates. an arena really is a loss leader

it's 100% is about getting the most people to visit downtown and go into restaurants, shops and such as possible. that means picking the events that maximize people, even if it means leaving open dates on the calendar

if 100 events can draw 100,000 people vs 150 events drawing 90,000 people I'll take the former.

I'd rather the arena fill one day with an event likely to draw 20,000 and not be able to have a three day event with the same 5,000 people each day because of conflicts

[aknowledgeableperson]

who cares about number of dates. an arena really is a loss leader

it's 100% is about getting the most people to visit downtown and go into restaurants, shops and such as possible. that means picking the events that maximize people, even if it means leaving open dates on the calendar

Your opinion and of a few others. If city leaders felt that way they would not have recruited AEG to be a partner in the SC. AEG is in the partnership to make a profit. If leaders had your opinion then AEG would not be a partner, just a management company.

[flyingember]

who cares about number of dates. an arena really is a loss leader

it's 100% is about getting the most people to visit downtown and go into restaurants, shops and such as possible. that means picking the events that maximize people, even if it means leaving open dates on the calendar

Your opinion and of a few others. If city leaders felt that way they would not have recruited AEG to be a partner in the SC. AEG is in the partnership to make a profit. If leaders had your opinion then AEG would not be a partner, just a management company.

alright, let's look at this from two aspects.

AEG's goal is of course profit as you said

fact 1:
from manufacturing to facilities management there's certain fixed costs incurred
like payroll of staff to keep the doors open, basic preventative maintenance and such

fact 2:
then there's all the variable costs. like payroll of ticket sellers, break fixes due to use, cost for trucks of food, valets, food service workers, water for restroom use, etc

basically something like the algebra equation 100 + 4X + 3Y + 20Z = ? only way more complex

the job of AEG as the manager is to maximize their profit by spending the least on non-fixed costs necessary and bringing in more in ticket sales than the sum total of fixed + variable costs over the year


so running more people on less days can mean more tickets sold for less days of variable cost.
if they brought in the same number of people for more days the variable costs being higher just to have the doors open would cut into AEG's and the city's profit, since the city gets a portion from it.

so their goal is to maximize people over events


the city:


they need people to not just buy a ticket for $50 but spend $50 on food, $20 on goods, etc. to get the sales tax too. buying gas downtown doesn't hurt either but food is better

When you have a regular event like a sports team a lot of people just leave the area.
Look at the sports stadiums at 435. the mall just down the road collapsed despite there being thousands of people going nearby for decades. look at how after almost 40 years there's still forested areas next to both stadiums that would be a wonderful before the game restaurant stop that never appeared. with tens of thousands of people for 90 different days a year that's a huge potential fan base to drive word of mouth for the rest of the year.

look at the stadiums and racetrack at the legends. none of these three things kept the shopping center from being sold on the courthouse steps. same problem. the sports didn't drive enough shopping to be beneficial

the city's goal is to keep high quality restaurants and shops open downtown and draw people to them. they want good hotels to open their doors nearby to serve those people. and so on

the city's goal is to provide whatever it takes to make people want to come downtown for an event

just the sprint center being there isn't enough for many people. if people didn't want to go *downtown* for an event the promoters have other options in KC they can use. there's a lot of events starting to do downtown KC and Overland Park as a pairing. Imagine if that was Independence and Overland Park instead


this means bringing new people into downtown who haven't been here before to maximize profits. suburbanites that go for the whole package of food + entertainment



combined:
which means AEG needs to want people to want to go downtown so they can get events that maximize their profit.

sure, having another 40 days filled would be nice for P&L but if it means that AEG doesn't make as much money the city sees less.

if a restaurant can run a minimum staff on a Thursday instead of needing to have 5 extra servers for an hour worth of rush after a convention then maybe that's ok if it keeps the restaurant open.

give them more bigger days where the rush lasts 3 hours instead so they make use of their staff.

If they fill the weeks with small events that provide only pain to the restaurants and pain to AEG the city might as well limit themselves to notable events

[aknowledgeableperson]

All of what you said does not take into account the economics of sport teams.
AEG will give up a huge portion of the revenues they pocket right now. A team will want a portion of advertising, suites and very likely concessions, something AEG keeps 100% of now. It would be very likely the team would not be paying rent for their games. Plus there will be additional costs to be paid for by AEG such as changeover costs and utility costs for practices on game days. And it is also a good bet that AEG will lose a few events it hosts now and it keeps 100% of those revenues.
Right now the City is receiving over $1M a year as its share of the profits. In all likelihood the city would have to kick in some money to the team with regards to office costs and a practice facility to be used on non-game days.

[im2kull]

All of what you said does not take into account the economics of sport teams.
AEG will give up a huge portion of the revenues they pocket right now. A team will want a portion of advertising, suites and very likely concessions, something AEG keeps 100% of now. It would be very likely the team would not be paying rent for their games. Plus there will be additional costs to be paid for by AEG such as changeover costs and utility costs for practices on game days. And it is also a good bet that AEG will lose a few events it hosts now and it keeps 100% of those revenues.
Right now the City is receiving over $1M a year as its share of the profits. In all likelihood the city would have to kick in some money to the team with regards to office costs and a practice facility to be used on non-game days.

For once, we agree


As for the other posters..this brings us back to my original point. Conflicts of interest (AEG/KCMO)..yes?

[aknowledgeableperson]

Conflicts of interest (AEG/KCMO)..yes?

Conflicts of interest? Well yes and no.

The problem that existed, IMO, goes back to when the new arena was proposed. No plan was developed at that time (and the problem now - ie American Royal) to address the renewed purpose of Kemper. A city or metro area our size just cannot support two large arenas that are expected to operate fulltime and compete with each other. For example, does it make sense to have two management companies competing with each other to host a concert, a WWE event, or any other event? What you have is the city competing with itself.

[FangKC]

American Royal says Kemper replacement must be priority

http://www.bizjournals.com/kansascity/n ... 1369295714

[GRID]

Tell the Kempers to fund it. They have had 40 years to turn KC into their little agribusiness mecca and have pretty much failed while Houston, Las Vegas and others ran with the idea and utilize facilities much bigger than this little 5000 seat barn they are proposing. In the mean time, they have done a lot of damage to the progress of urban development in KC by stalling building a new arena, transit, tearing down buildings in the loop for parking lots etc.

Mothball Kemper or sell it. KCMO has enough on its plate.

Or better yet, just take this whole idea out to the speedway or near the Indep bass pro where it belongs and do something productive with the west bottoms that doesn't involve the Kempers.

[moderne]

Someone does not like the Kemper family. Will you be calling for the guillotine to rid the city of this plutocracy?

[kboish]

Someone does not like the Kemper family. Will you be calling for the guillotine to rid the city of this plutocracy?

Yes.

Was sitting in a meeting the other day talking about the incentives "border war". Apparently last year there was basically a deal st(r)uck to create a DMZ area in metro KC...that is until The Show Me Institute nuked it (aka Kempers) and both sides walked away


edit: spelling

[KCMax]

Someone does not like the Kemper family. Will you be calling for the guillotine to rid the city of this plutocracy?

Yes.

Was sitting in a meeting the other day talking about the incentives "border war". Apparently last year there was basically a deal st(r)uck to create a DMZ area in metro KC...that is until The Show Me Institute nuked it (aka Kempers) and both sides walked away


edit: spelling

Elaborate. Struck between who? KS and MO? What was the deal?

[kboish]

the conversation was only somewhat related to the incentives war and was only briefly touching on it. no details were given at the time and no one asked f/u b/c it would have been far off topic. It sounded like the deal/agreement was between governors (offices) to advocate to legislature. but again, he didn't elaborate.

This is just one pawn for the Show Me Institute (which is the front org for Crosby Kemper and Rex Sinquefield) to get rid of taxes in MO (corporate and personal income taxes). They don't want an armistice called, they want MO to match what KS has done with its taxing structure. All conservative tax policy proposals in MO come from these guys and they do everything they can to submarine any legislation or agreements contrary to their agenda.

Don't forget though, it is only a portion/sect of the Kemper family...


http://www.kshb.com/dpp/news/political/ ... border-war

[GRID]

Someone does not like the Kemper family. Will you be calling for the guillotine to rid the city of this plutocracy?

Do you not know the history of the Kempers in KC? They have done little for the city. At least they have not moved their bank offices to the burbs, but they are not exactly the best corporate citizens in the urban core.

They were against the downtown ballpark, have always been against light rail, did not want the sprint center, and they have done more demo downtown than construction.

[FangKC]

Even though Crosby Kemper III appears to hate taxes, and public tax subsidies, I wonder what he thought when the other branch of the Kemper family at Commerce Bank used state and federal historic tax credits to renovate the Commerce Trust Building at 10th and Walnut.

It wasn't like the building was blighted, or vacant either, and needed that subsidized money to make the building functional again.

I support historic tax credits fully, but this was an example of an application of a tax subsidy that wasn't warranted. A profitable bank run by one of the wealthiest families in the Metro taking a tax subsidy to fix up their building.

This, when other developers struggle to get historic tax credits to fix up empty buildings that are blighted--many that have sat empty for years.

While I would hate to see it made any harder to fix up historic buildings, this instance was one where they should have been a means test applied.

From the Show-Me Institute website:

New Year’s Resolutions for a Better Missouri

By Andrew B. Wilson
Tuesday, January 03, 2012

Resolution #2: End the sacred cow status of state tax credits. These subsidies to favored builders, developers and others are not “free money.” They represent a serious drain on future tax revenues. They are one of the prime reasons our fiscal house is not in order.

It is therefore time to rein in the sacred cows of historic tax credits, development tax credits and film tax credits, and make these and other tax credit programs subject to ordinary budgetary processes and disciplines. Rather than being automatically rolled over (or increased) from one year to the next, the legislature should aim to make deep cuts in these programs on grounds of inefficiency, waste and the need to put a stop to crony capitalism and corporate welfare.

http://www.showmeinstitute.org/publicat ... souri.html

[chaglang]

From the Show-Me Institute website:

Resolution #2: End the sacred cow status of state tax credits. These subsidies to favored builders, developers and others are not “free money.” They represent a serious drain on future tax revenues. They are one of the prime reasons our fiscal house is not in order.

It is therefore time to rein in the sacred cows of historic tax credits, development tax credits and film tax credits, and make these and other tax credit programs subject to ordinary budgetary processes and disciplines. Rather than being automatically rolled over (or increased) from one year to the next, the legislature should aim to make deep cuts in these programs on grounds of inefficiency, waste and the need to put a stop to crony capitalism and corporate welfare.

Classic conservative Mad Libs: [proper noun] is waste, inefficiency, crony capitalism, corporate welfare and must be ended. Galt!

The state gets back $1.50 for every $1.00 in HTC is spends. They're available to anyone who qualifies, not favored builders and developers. The HTC program made the renovation of my house possible. Because the project was able to go forward, my money went to a host of small businessmen. The process itself is rigorous, sometimes cumbersome, but I don't think it's inefficient or wasteful. Because Missouri matches a percentage of the project budget, if the state spends more money on a project it's because the developer spent more money first. Costs must be audited by an accountant, and then are reviewed by the SHPO's office. And the SHPO loves to disqualify costs. It's not easy. There's no cronyism. There's no corporate welfare.

The importance of automatically rolling the program over from year to year is that it gives lenders a sense that the program is stable and its projects are worth investing in. If not all the money in the HTC budget is allocated (which happened during 2009-2011 because of the recession), the money remains with the state. It's not spent. In effect the state only spends the money if they are getting a 150% ROI.

The Kempers, being smart people, certainly understand all of this.

Ironically, the renovation of an empty school building in Brad Lager's hometown of Savannah, MO won an award this year. It's a fully occupied senior housing facility. After years of working diligently to slash the HTC budget, he turned up to receive the award and for a photo op. Chutzpah.