Developer-led approach could be key to building downtown stadium

Jeffrey R. Needham

Conspicuously absent from the current Bistate 2 plan is any financing -- or even planning -- for a new downtown arena. Despite the widespread recognition of the need for an arena, nothing has happened.

Perhaps this is a reflection of the high costs associated with new arena design and construction or just the difficulty of the city leadership admitting what a disaster Kemper Arena really is. No matter what the problem, it is time to move forward with a fresh approach.

Instead of the traditional, city-financed, laborious, consensus-building, design-bid-build approach, let's have a developer lead a design-build competition. Private development teams would be required to include a complete proposal for owning and operating an arena at a profit. These development teams would include franchise ownership, event management, arena design and arena construction.

In other words, the arena would have to be constructed and operated the same way firms design and build a manufacturing plant. The "arena factory" would have to operate at a sufficient profit to justify the investment.

A competition would require very little financial outlay by the city. The role for the city would be limited to issuing a request for proposal, assembling the critical land package, providing opportunities for some tax abatements and tax increment financing, plus selecting a winner using a rating system.

The winner then would have development rights for a limited amount of time. If the developer could not begin construction within that time, the development rights would pass to the development team with the next most highly rated proposal, subject to a minimum rating.

The city should look at the development and construction of an arena the same way it would look at a prospective company coming to town with 500 new jobs.

The new jobs would include arena and team management staff, performance staff (players and entertainers), hundreds of construction jobs, event construction crews, sound crews, television and radio event staffs, Teamsters, security and police, event and concession staff, arena restaurant staff, and maintenance and cleaning crews. These all represent new downtown jobs.

Kansas City is a major national center for stadium and arena architects, yet the local firms have had little success in moving the arena issue forward. A design competition would allow each firm to showcase its unique, creative skills for all in the community to see.

However, the team leader would be a developer. The developer would provide the financial savvy to restrain costs, assemble a complete team, including tenants, and finance the project.

If the proposed arena won't justify its construction and operating costs, then maybe Kansas City doesn't deserve a good arena. After all, why should the taxpayers continue to build palaces for millionaire players and owners? It is really hard to present any sound argument for a publicly financed and operated arena in today's economic climate.

The answer is the arena factory.

The factory approach forces restraint on design and construction costs, develops efficiencies in operation and forces the arena operator to maximize arena events. These are precisely the characteristics that are lacking in the publicly financed approach.

A new arena can happen as a private venture. It will never get done publicly. For roughly equivalent designs, a private "factory approach" arena will cost a third less than a publicly constructed arena and get done twice as fast.

Risk to the city is minimized because it won't even start unless the developer/operator has a sound business plan, which probably includes a National Basketball Association or National Hockey League franchise, several minor-league sport franchises, major and minor college sporting events, and numerous concerts, ice shows and cultural events. A developer/operator probably will need 150 event dates to make a profit.

The goals of the arena developer/operator will parallel the goals that are trumpeted for downtown redevelopment: to bring people back Downtown.

One hundred and fifty events represent nearly 2 million downtown visits. Properly conceived, the new private arena will generate demand for before- and after-event food and entertainment, hotel rooms and other services. Better yet, it will create a climate for investment in Downtown.

Let's get it done. The old way has dropped Kansas City into our current second-tier status for most sports and entertainment events outside of our two major-league teams. We don't even get considered for many events. Kansas City's arena situation is subpar when compared with surrounding smaller cities, such as Oklahoma City.

Let's regain the can-do attitude that used to be so prevalent in Kansas City. The factory approach can be the answer for an arena.

Jeffrey R. Needham is president of Needham and Associates Inc. in Overland Park. He may be reached at jneedham@needhamassoc.com.