Archive for Tuesday, February 16, 2016

Kansas official: Plans not firm for American Royal project in Kansas City

February 16, 2016

TOPEKA — A new hotel, children's museum and 5,000-seat hockey arena could be part of a project designed to lure the annual American Royal horse and livestock exhibition to the Kansas side of the Kansas City metropolitan area from Missouri.

A top Kansas Department of Commerce official told legislators Tuesday that potential details are "just speculation." But several Republican lawmakers worried about the state helping to finance the development said they believe a plan is firm.

The Associated Press obtained a copy of a recent department report, which said the proposed development in Wyandotte County "is assumed" to include a total of 15 projects, including the hotel, museum and hockey arena. The report doesn't include a total price tag, but also describes retail stores, restaurants and outdoor farming exhibits for children.

"I think it was almost executed until we got involved with it," said Sen. Jim Denning, an Overland Park Republican critical of the project.

Department of Commerce Deputy Secretary Steve Kelly was asked about the American Royal project during a legislative hearing Tuesday morning, but he would only say that no firm plans were close to being adopted. He and other agency officials were at the Senate Commerce Committee hearing to give an annual report on a bonding program that could be used to pay for the project.

Kansas legislators have included a provision in budget legislation to block Republican Gov. Sam Brownback's administration from using the special economic development program to pay for the proposal. Under the program, the department authorizes bonds for such projects, and sales tax revenues collected in a development district pay off the debt within 20 years.

Legislators in both parties said Kansas would give up $42 million a year in sales tax revenues to finance the American Royal development, even though the state is struggling to balance its budget. A few lawmakers were surprised to learn that the project included a hotel, a children's museum and an arena for a team in the United States Hockey League, which grooms young players for college and professional play.

"We're speculating on plans that, as I understand it, have evolved a number of times," Kelly told the hearing.

That didn't sit well with the committee's chairwoman.

"I just don't think we were consulted, which would be appropriate for the holders of the purse strings," Sen. Julia Lynn, an Olathe Republican, said afterward.

Department of Commerce spokeswoman Nicole Randall said state law bars the agency from commenting on potential projects. American Royal officials didn't respond to requests for comment made on Monday and Tuesday.

So-called STAR bonds have been used to finance projects throughout Kansas, but most notably in the Kansas City area. Kelly said the program is used for major attractions that have large up-front costs that would discourage private developers.

"The primary objective is destination tourism," Kelly told lawmakers during Tuesday's hearing.

With state approval, Wyandotte County issued $450 million in STAR bonds starting in 2001 to build Kansas Speedway and develop the area into a thriving entertainment and retail shopping district that now includes Major League Soccer and minor league baseball stadiums. The bonds will be paid off early, by the end of this year — giving the state an opportunity to potentially expand the development district to the west and finance the American Royal project.

Founded in 1899, the American Royal runs nearly 11 weeks from early September into the week of Thanksgiving. It includes a parade, horse and livestock shows and a national barbecue competition. Its website says it draws more than 270,000 visitors a year, and the Kansas Department of Commerce projects attendance growing to 350,000 four years after a move.

The Commerce Department's report anticipates the new, 5,000-seat arena being used both for hockey and agricultural events. The report also said the children's museum would draw at least 100,000 visitors a year and the hotel could have 140 rooms.

Mike Taylor, a spokesman for Wyandotte County, said discussions about the American Royal development began about six months ago.

"It is not Wyandotte County's project," Taylor said. "It is a project the state and the American Royal approached us about."


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