On the way to getting approval for the Homefield project development agreement Thursday night, the Unified Government Commissioners spent more than a half-hour discussing east-west development disparities and who would have the authority to approve promised investments on the east side.
Most of the discussion about the $330 million Homefield youth sports development, with stores and hotels, to be built at the former Schlitterbahn water park site at 94th and State Avenue in Kansas City, Kansas, centered on a $3.75 million accompanying pledge by the developer to invest in development on the east side.
All the commissioners who commented about the project said they liked it and thanked the developer for bringing it to the city. However, at least four commissioners also commented that they wanted the UG Commission to have more of a role in selecting and approving the accompanying projects on the east side.
Project plans
The new Homefield development is expected to boost tourism in Wyandotte County. The developer stated that about a million people would be expected to visit the facility a year.
The developer, HFS KCK, will buy out Schlitterbahn and assume the development agreement, which is being amended, according to officials.
The developer will demolish the Schitterbahn water park and will build a $90 million Homefield project, including a $60 million multi-sport building; a $15 million multi-sport venue for outdoor sports; and a $156 million baseball complex with five outdoor, lighted turf fields.
A 150,000-square-fot indoor multi-sport facility would be built at the site. The facility would include food and beverage, medical services, fitness, retail, office and entertainment spaces. In addition, there would be outdoor sports facilities for training, and programs or water and outdoor sports, as well as a youth baseball complex. A 6 to 7-acre lagoon would provide a site for water sports and a beach.
With the project, Homefield will be buying the Schlitterbahn property and some adjacent UG property, and will be taking over bonds that had been issued to Schlitterbahn.
Developer Robb Heineman, the former CEO of Sporting KC, is the co-founder and owner of Homefield. He said Homefield would acquire about 300 acres of property, most from the Henry family and some from the UG. The Speer property, some property near the cemetery on the east side, and some property near the fire station on State were mentioned.
The UG will receive $3 million for 71.5 acres of land, and the money will be used to repay 2015 STAR bonds according to earlier agreements with the state on the STAR bonds, according to Todd LaSala, an outside attorney with the UG.
Future project plans include two hotels, retail stores, possibly automotive dealerships and possibly housing.
Financing
Financing would be through STAR bonds and private financing. According to officials, $130 million in new STAR bonds would be paid with revenues from project areas 2B, 3 and 5 in the Village East area. The first $75 million in STAR bonds would be matched with private capital of $75 million.
The second issuance of $55 million in STAR bonds would be matched by $118.5 million to $125 million of additional private investments, a 60-40 ratio.
The nearby Menards store, which is in the STAR bond district, would share sales tax revenues from July 1, 2021, through the life of the bonds, according to LaSala. All of the UG portion of sales taxes from Menards would go to the Homefield project.
According to LaSala, the state’s portion of Menards sales taxes, from July 1, 2021 until July 1, 2022 or completion and opening of Homefield, would be divided 25 percent to pay the new STAR bonds and 75 percent to pay 2015B bonds. After July 1, 2022, or completion and opening of Homefield, 75 percent of the state’s portion from Menards sales taxes would pay for new STAR bonds, while 25 percent would pay 2015 bonds.
Other project incentives will include community improvement districts and industrial revenue bonds. They will agree to a schedule for 10 years of what the payment in lieu of property tax will look like starting at $370,000 to $404,000. At the end of 10 years, the property will come back on the tax rolls.
LaSala said Schlitterbahn has failed to make $375,000 in payments over the past few years for its charitable donations to the community. The developer has agreed to get the funds when they close on the project, and will give it to the casino-Schlitterbahn charity fund at the UG.
But Homefield will not be continuing the donations to the charitable fund, he said. Instead, it will make $3.75 million in investments in the downtown and urban areas of Kansas City, Kansas, within three years.
They hope it will spur further investment in the urban core, he said.
The developer has agreed to use a certain percentage of local, women and minority firms in the project.
Also, LaSala said Home field would agree to be dues-paying members of the chamber and Wyandotte Economic Development Corp; would have its headquarters in Wyandotte County; would offer a 20 percent discount on admission for Wyandotte County residents; would make agreements with local school districts for student participation in off-peak hours in training and recreational activities; would give 500 tickets annually for Parks and Recreation; would schedule out-of-town tournaments and promote Wyandotte County hotels; and would make a $3 million land payment to pay down existing STAR bonds.
Katherine Carttar, UG economic development director, said the project, while it is $90 million, would spur over $400 million in development with the additional attractions, including hotels and retail. There is a potential for over $130 million with the local, minority and women firms during construction.
The project will create more than 3,000 direct and indirect construction jobs, she said. About 1,251 direct and indirect ongoing operational phase jobs will be created, she said.
Carttar said the feasibility study estimated that Homefield plus the other increased development around it would result in about 2.79 million annual visitors, and of those, about 1.3 million are estimated to be from out-of-state. This will be expected to spur hotel stays and dining expenditures in the area.
Carttar said the average local property tax revenue at buildout from Homefield would be about $3.9 million annually. Estimated property tax generation with all the planned stores and hotels would be $85.8 million over 22 years, and $3.9 million per year, she said.
Sales tax revenue at buildout would be about $150,000 annually, for the dedicated sales tax fund and EMS fund, she said. The other sales tax revenues would go back to the project.
Project timelines
According to Heineman, demolition of the Schlitterbahn water park would begin before the end of this year. The new development may keep any parts of the water park that it wants to keep.
Construction would start by July 2021, and the baseball complex would be finished by September 2022, according to project plans. The Homefield building and outdoor facilities would be completed by October 2022.
Heineman said their goal is to have a grand opening on July 4 weekend, 2022.
The $3.75 million investment on the east side
No one spoke at the public hearing on the development, but commissioners discussed the project, particularly the $3.75 million investment for downtown or urban areas of Kansas City, Kansas.
Commissioner Christian Ramirez said he was concerned about the donation the UG would no longer get for charities and organizations, estimated at about $150,000 annually in the past. He also hoped that commissioners would get a chance to voice where they believe the investment should go.
Heineman said their expectation was it would be a collaborative process, with input from the UG.
Commissioner Mike Kane said he didn’t like the idea of the administrator deciding where the money would go. He believed it would be the administrator’s pet projects, not the commission’s, that would get the investments. He said all the commission and the mayor should consider where the money is going.
He also requested Homefield to reach out to local union contractors and ask them to bid on contracts. He mentioned some other projects in Wyandotte County where more than half of the construction workers came from outside the county or outside the state.
Commissioner Gayle Townsend was very concerned that people in the northeast area would not be able to afford to participate in the attractions at the youth sports complex. However, she was most concerned about the language of the agreement. She requested more time to work on it.
She was concerned about how the $3.75 million of investment money would come to the UG and who would determine the projects, and where it was going to be used. She said she had not seen the level of development in the northeast area as other areas since she has been on the commission.
Doug Bach, UG administrator, said the developer would not be giving any money to the UG to then spend, but the developer would come up with an idea and discuss it with the UG.
Bach said the UG Commission could meet and tell him criteria they wanted for these projects.
Heineman said they had committed $3.75 million in three years, and they may need to be nimble if they come up with an idea, to get it through the approval process in that time.
Mayor David Alvey said there should be a discussion among the commission as to what are catalytic investments and where they should go.
He said it wasn’t a fund transfer to the UG. It was simply a commitment by the developer to invest.
Commissioner Jane Philbrook said the commission does not like to relinquish control over where and how the money is distributed, even though they don’t have it in their coffers. The people who elect them expect them to do the best for them, in certain districts. She talked about a team to put guidelines in place.
Apparently, one of the reasons for proposing that the administrator and not the UG Commission would have authority over the investments was that the issue would not have to come to the UG Commission meeting, a public meeting. There was more time involved with commission discussions.
LaSala said they’re on a deadline. Heineman said they had to purchase the land in the next few weeks, and if they lost the land, they would lose the project. They have a list of ideas they’re already considering and they are open to listening to ideas from the commission, he said..
Commissioner Melissa Bynum asked if Heineman might be looking at investing in a project already started on the east side. He said that was possible. She said they could probably get a commitment to contribute to the casino grant fund from other new projects coming to the county.
Commissioner Jim Walters said they have wanted someone to invest in parts of the city where they have been longing for private investment to happen. It’s the developer’s money, not theirs, he said. It’s generous that he allows them to review it, but the UG also has to be “reasonable” under the language of the agreement.
The soccer team development agreement required them to build two soccer fields in the eastern side of the city, subject to the approval of the commission, and the commission could never agree on the locations, so those fields never got built, he said. In some cases, they may need to stand aside a little bit and get out of the way, Commissioner Walters said.
Attorney LaSala, when asked, told the commission that Heineman would not normally need the commission’s approval to invest in any projects in Kansas City, Kansas. He would only need the UG’s approval to fulfill the terms of the agreement, LaSala said. If they hadn’t put it in the agreement, he wouldn’t have needed their permission.
From comments made by Commissioner Harold Johnson, they already had discussed the details of the $330 million agreement previously, in “three-on-three” meetings with the UG administrator that were private meetings with three commissioners present at one time. He said he expected that the administrator would bring the commissioners in on “three-on-three” meetings to discuss these investment projects in advance, before they make a decision publicly.
The project also was discussed at the Monday, Nov. 2, UG Economic Development and Finance Committee, where it was approved. Some of the same concerns about who had the authority to approve the $3.75 million investments were discussed at that committee meeting. The project was “fast-tracked” to Thursday night’s UG Commission meeting, according to officials.
Commissioners approved the development agreement on a 9-1 vote at the remote meeting, with Commissioner Gayle Townsend voting no. Commissioner Townsend had favored more time to work on the language of the agreement concerning who would have authority to approve the eastern investments. The commission will set parameters for the investments, as an amendment to the proposed agreement.
On a separate vote, the Homefield project plans passed 10-0.
The meeting is online at https://www.youtube.com/watch?v=C9vDmk34Qco.