RESOLUTION
NO. 140949
Directing the City Manager to
enter into a negotiation process with the American Royal Association to
structure a public-private partnership for redevelopment of the American Royal
complex and demolition of Kemper Arena, a draft plan of finance and a plan to
divest the City of its current and future capital maintenance and lease
obligations for both Kemper Arena and the American Royal complex facilities for
consideration by the City Council.
WHEREAS, the
City has received suggestions for various uses of property in the West Bottoms;
and
WHEREAS, the
City has completed a purposeful planning and analysis process regarding the
future use of Kemper Arena and the American Royal complex facilities, including
outreach to business owners and neighborhood stakeholders; and
WHEREAS, as part
of this process the City has received and completed preliminary evaluations of
proposals from both the American Royal Association and Foutch Brothers for
potential redevelopment of Kemper Arena and the American Royal complex
facilities; and
WHEREAS, the
City has completed an analysis of the relative cost of these proposals versus
the City’s current financial and lease obligations; and
WHEREAS, the
City desires to relieve itself of its current lease obligations with the
American Royal Association, which results in an annual operating subsidy,
unrecouped costs and deferred capital maintenance; and
WHEREAS, the
City has determined that it’s status quo approach to meeting these financial
and lease obligations will continue to require ongoing capital contributions
and subsidies through the end of the term of the current lease with the
American Royal Association; and
WHEREAS, the
City’s Adopted 2015-2020 Business Plan does not provide for additional funding
for the redevelopment of Kemper Arena and the American Royal complex facilities
or for additional costs related to their ongoing maintenance and operations;
and
WHEREAS, the
City desires to minimize the long-term financial cost of maintaining and operating
Kemper Arena and the American Royal complex facilities and is financially
unable to redirect additional resources from other basic services such as
police, fire, streets, and utilities; and
WHEREAS, the
Foutch Brothers have withdrawn their proposal from consideration; and
WHEREAS, it has
been preliminarily determined that a capital contribution greater than $20
million dollars plus an annual operating subsidy of greater than $1 million
dollars for 30 years would result in a net increase of expenditures by the City
over its current level of support for both Kemper Arena and the American Royal
complex facilities; and
WHEREAS, any net
increase of expenditures over the City’s current level of support for Kemper
Arena and the American Royal complex facilities, would otherwise redirect City
resources away from these basic services, unless funded, in part, through a
dedicated property tax for general obligation bonds, which would require
approval by the voters; and
WHEREAS, the
American Royal Association has presented a proposal which requests a $30
million dollar capital contribution and a $1 million a year annual operating
subsidy to fund their proposed redevelopment of the American Royal complex, to
include improvements to the current complex, demolition of Kemper Arena, and
establishment of a youth sports facility in partnership with SportingKC; and
WHEREAS, members
of the American Royal Association’s development team have previously committed
to contribute funds, in addition to their equity contribution to the
redevelopment of the American Royal complex facilities, in an amount necessary
to fund the demolition of Kemper Arena; and
WHEREAS, the
City desires to limit their participation in any potential public-private
partnership relative to the redevelopment of Kemper Arena and the American
Royal complex facilities, such that it is less than or equal to the
contributions of other partners in the project and ensures that any City funds
utilized would be committed “last in” - only after other partners funds were
otherwise committed; NOW, THEREFORE,
BE IT RESOLVED
BY THE CITY COUNCIL OF KANSAS CITY:
Section 1. That
the City Manager is directed to engage in a preliminary negotiation process
with the American Royal Association as to the structure of a potential
public-private partnership for the redevelopment of both the American Royal
complex facilities and demolition of Kemper Arena, at a cost to the City no
greater than $20 million dollars for capital expenditures and $1 million
dollars in annual operating subsidy for 20 years.
Section 2. That
the City Manager is further directed to develop a draft plan of finance for the
City’s participation in this potential demolition of Kemper Arena and
redevelopment of the American Royal complex facilities, including a plan to
divest the City of its current and future capital maintenance and lease
obligations for Kemper Arena and the American Royal complex facilities, for
consideration by the City Council.
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