Wyandotte County

About five or six years after separating the local tourism bureau from the Chamber of Commerce, the Unified Government Commission on Thursday night took steps that might one day recombine them.

Several commissioners had questions that were not yet answered, and the commission unanimously voted to authorize a new study, and also to send a notice of termination of contract to the Kansas City, Kan., Convention and Visitors Bureau pending the results of the study.

The motion also was to terminate the UG contract with Wyandotte Economic Development Council, the third agency in the consolidation proposal. The notices of termination will be sent pending the results of the study, according to the wording used during the UG discussion.

The commission actions also will be reviewed by UG attorneys before the notices of termination are sent out, according to commissioners.

A one-year notice of termination is required to end the funding of the CVB, according to UG officials. The current UG contract with CVB runs through Dec. 31, 2016.

Commissioners said they could rescind the vote of termination six months from now when the study is completed, if the study supports a separate agency. If not rescinded, the termination would take effect at the end of October 2015, according to UG officials. The idea that the commission could terminate the contract, then rescind it later if the commission wanted, was suggested by Mayor Mark Holland. In six months, after study results come in, if the commission decided to go ahead with the termination, it would not have to wait another 12 months, according to Holland.

The CVB issue and a public hearing on the topic were placed on the agenda earlier this week, and on Thursday, the same day of the meeting, a vote was added to the agenda item. By 3 p.m. Thursday, the UG had received 16 written notes or messages against the proposed consolidation, according to agenda information.

The study would be funded through each agency paying one-third of its cost, and the UG administrator would oversee the issuing of the request for proposals, according to commissioners.

A group of business leaders addressed the commission in support of the consolidation of the agencies, while several local persons and persons from tourism associations supported an independent CVB.

Mayor Holland, whose name has been listed online as a board member of the Kansas City, Kan., Area Chamber of Commerce, and who supported an independent CVB several years ago, said the UG gives the Wyandotte Economic Development Council about 60 percent of its funds; about 100 percent of the CVB’s money comes through the UG as the allocation of transient guest tax dollars; and the UG does not fund the chamber, just pays dues as a member.

Bridgette Jobe, executive director of the CVB, said the agency has a budget of about $734,000 for 2015, which includes 82 percent for marketing.

The CVB has more than 130,000 contacts requesting more information, she said, plus its website visits have increased by 107 percent. It has received an award for best online media, and this year it added online hotel bookings to its website.

It has shown consistent growth, with the Kansas City, Kan., area having the second highest occupancy rate and second highest average daily rate in the metropolitan area, she said.

“You have the distinction of being the No. 1 destination in the state,” said Kevin Fern, incoming president of the Travel Industry Association of Kansas and executive director of the Shawnee CVB. He urged the commission to allow the CVB to retain its independent vision.

“Significant effort was put forth by several of you and your predecessors to determine the structure of the existing Convention and Visitors Bureau,” said Linda Craghead, assistant secretary of the Kansas Department of Wildlife, Parks and Tourism, at the public hearing,

As a result of the 2009 decision, the KCK CVB now serves as a successful model for other cities across the state and the nation, she said.

Professionals with the CVB have developed strategic focus long-term marketing strategy, won awards for their work, been acknowledged as the best of the best and implemented programs that have provided additional revenues for the local government. Additionally, Craghead provided them with a copy of a report that told what happened when one neighboring state, Colorado, eliminated its marketing budget for tourism. When its marketing budget was cut from $12 million to zero, that state’s domestic market share plunged 30 percent within two years, she said.

While she was not suggesting that marketing is being eliminated here, “I am cautioning you tonight that your decision tonight sets the stage for future results,” she said, “and under your current structure, results are what you’re seeing.”

In fiscal year 2008, transient guest sales tax for Kansas City, Kan., was a little over $1.9 million. In fiscal year 2014, it was $3.02 million, and the city is on track for another record-breaking year in fiscal year 2015, she said.

“Don’t let the easy fix get in the way of a well-thought-out, sound decision,” Craghead said. She added the state wildlife and tourism department would continue to work with whatever agency the UG chooses.

Todd LaSala, an attorney with a Kansas City, Mo., law firm, who is board chair of the Kansas City, Kan., Area Chamber of Commerce, said meetings have been held since March with representatives of the chamber, WEDC and CVB.

He said there had been a lot of comments from the CVB about the proposed organizational structure and board structure, which were implemented in the proposal. However, the CVB board voted not to consolidate or pursue this.

“The proposal is to create a brand new organization that would perform all three functions that are currently performed by your existing community partners,” he said. It would be a merger of equals, he said, and tourism would not be placed under other functions. The board would have 21 members.

He said he did not expect that receiving public money would change the chamber’s occasional adversarial role on certain topics with the UG, because those positions would be paid with private funding.

He discussed spending tourism dollars on business travelers, also that opportunities would be explored for alternative marketing with partners such as the T-Bones and Sporting Kansas City, and to work closely with the convention center.

He added there could be savings and efficiencies by combining the three organizations.

Korb Maxwell, an attorney with a Kansas City, Mo., law firm, who is the board chair of the Wyandotte Economic Development Council, said if there isn’t a combined board, groups won’t be able to work together on a day-to-day basis.

“We believe we can do better and we’re willing to provide our resources, our effort and our brand into this new organization to make it stronger and push this county forward,” Maxwell said.

Greg Cotton, chief of staff of Sporting Kansas City and chair-elect of the KCK Chamber, sent in a video presentation where he said the community is at a crossroads where it could “go big” or it could start to backslide.

He said the proposed soccer training facility could bring in 30,000 room nights per year of activity, which is about 80 per day, making it the largest attraction of visitors to the region on an annual basis.

He said there needs to be a cohesive brand to attract events, and it was important to combine the CVB, chamber and WEDC into one group.

The new brand, according to Cotton, would drive new economic development in an efficient use of resources.

Craig Gaffney, Bonner Springs, a bank president who has served as treasurer of the chamber, said the chamber was currently in a strong financial position, with a healthy bank balance. It is refinancing its downtown building, which it spent $1.2 million to renovate, and so it will improve its cash flow substantially.

He said a consolidation of the three agencies would create additional revenue opportunities and some economies of scale, resulting in a savings of about $65,000 annually.

Pat Warren, president of Kansas Speedway, who is a board member of the chamber, supported the consolidation and said that he was prepared to offer half of a building that was formerly the state visitors’ center to the new agency rent-free. The building is mostly vacant although it is being used this week for advance voting.

Businessman Bill Dunn Jr. of J.E. Dunn Construction said he was a long-time investor in the Hilton Garden Inn in downtown Kansas City, Kan., through an investing group, and he would like to see more efforts spent on trying to attract business travelers.

“What’s the rush?” asked an attorney hired by the CVB, Rick Guinn of Overland Park. The question was repeated by CVB supporters, including some of its board members who spoke at the public hearing.

Guinn said the timing has something to do with the STAR bonds – that in January 2017 the STAR bonds on Village West will be paid off, and the transient guest tax dollars that the CVB receives are freed up at that point. He said that the chamber and Wyandotte Economic Development Council seem to want to have control of the tax dollars without the strong voice of the CVB. On a joint board of a new agency, the tourism board members would be one-third of the board.

Guinn advised the commission, which has three lawyers among its members, to get an opinion on the topic from its own legal staff. He said the CVB board has a serious concern about the commingling of transient guest tax funds that cannot be diluted under state law and are required to be spent on tourism. He also stated, in a letter to the UG, that he believed tourism would take a back seat to the chamber’s priorities, and that dollars were often diverted to chamber functions, with fewer dollars spent on tourism marketing under a consolidated structure.

He also pointed out that all of the cities in this region that have large amounts of tourism, such as Omaha, Topeka, and Wichita, have their own independent tourism bureaus.

Guinn said the structure of the CVB is correct, and that if the problem is personalities or collaboration, then that is what should be worked on. He said the CVB was willing to work on more collaboration.

Guinn said it was not fair that the conversation between the chamber and CVB began with consolidation being a “done deal” when the question should have been whether consolidation should take place.

When asked, UG Attorney Jody Boeding confirmed that the UG Commission could decide where to direct transient guest tax dollars in relation to the CVB question. However, she said she had not read the contract of the UG with the Wyandotte Economic Development Council, concerning any amount of time that notice of termination had to be given.

Greg Jackson, general manager of Dave and Buster’s, and vice chair of the CVB board, asked why not wait until 2016, when the CVB contract is up for revision.

“I would think other motives are behind this,” he said. “Collaboration does not require consolidation.”

Jerry Cook, a 2008 task force member here who also is the president of the Overland Park CVB, said the task force then supported an independent CVB.

He said the mission of the three agencies were different, that the chamber and economic development group’s mission was business growth, while the CVB’s was travel and tourism.

During the public hearing, Maryann Flunder, a Kansas City, Kan., resident, said that she was not pleased with the tourism bureau. She said she would like to see more money spent on promoting the old Quindaro Ruins museum.

Celeste Mikijanis, owner of the Wine Barn and Winery in Kansas City, Kan., said she had worked closely with all three organizations and all had helped her.

She said the CVB brought in guests from outside the local community through its marketing programs. The Wine Barn has worked with the CVB to bring outside state groups to the winery, and the CVB has used its products to cross-promote to people traveling here, she said.

“Consolidation would be a backward move for tourism,” she said. “Each should stay concentrated on its strength.”

She believes the individual effect of each organization would be reduced with consolidation.

Bud Nicol, executive director of the Hotel and Lodging Association of Greater Kansas City, also said, “Why the rush?” He said it was the first opportunity for a public hearing on the topic that he had heard of.

He said the CVB as a separate entity has a focused mission.

“When you commingle organizations, you can lose sight of what you’re out to create,” he said.

Melissa Bynum, a Kansas City, Kan., resident, asked questions including: What CVB activities were not being performed that served as an impetus a year ago to start discussions about consolidating? What considerations will be given for the three CVB employees, who live in Wyandotte County, to have jobs if consolidation occurs? Have the various tourist sites in Wyandotte County including the museums, hotels and attractions been brought to the table for their comments?

Also appearing at the public hearing was a new small business owner who wanted to know, as a small business owner, what would be the benefits to her from the consolidation?

In a letter to the mayor, a former chamber employee for seven years, Jeffrey Walker, stated that, “When I was with the Chamber, I witnessed first-hand how the Chamber needed the administrative dollars from the CVB and at the time Business/Education Coalition, Wyandotte Development Inc. and Leadership 2000 to help defray its operating costs. Through the forced sharing of resources that the CVB did not need, the CVB was forced to spend administrative dollars unnecessarily. I also saw that the CVB was forced to adhere to the Chamber’s agenda which was not always in the best interest of tourism in our community.”

His letter, which has been included in the public record as part of the UG agenda documents, called it a “shameless grab for cash by corrupt politicians and double-dealing developers who would free the path to TGT (transient guest tax) dollars unbidden. They would hijack TGT funds for their own special interests. This is not so much a consolidation as it is a hostile takeover.”

He pointed out that the CVB’s board has already said it does not want this. His letter continued, “Yet somehow, people who are not CVB professionals think they know better. The Board fears, and rightly so, that the TGT funds that are to be used to promote this community’s treasures will be sucked up into the development projects that have nothing to do with tourism; that these funds will evaporate into the pockets of dirty politicians and developers. Shame Shame Shame.”

A letter supporting an independent CVB also was received from a member of the T-Rex Restaurant management company, who served on the original task force, and called it a “major step backwards.” Another letter was received from the retired director of the Leavenworth CVB, who said this consolidation would be a “huge loss for tourism in the state of Kansas as well as the KC metro area.”

Commissioner Brian McKiernan said he had four pages of questions to be answered. Commissioner Ann Murguia also asked questions about who would pay for the study, who would take the lead on the study and who was paying for the attorneys’ time at the meeting. The commission decided to have the three agencies pay for the study and the UG administrator take the lead on it. The attorneys who are board members for the chamber and WEDC appeared for free as part of their volunteer work with the groups, and the attorney for the CVB was paid through the agency.

Commissioner Murguia said it appeared that the commission cannot say whether two organizations can be consolidated, only where it will spend the money. So that if it can’t decide whether the two organizations can be consolidated, how could it have the right to launch a study to decide whether the two organizations should consolidate? The study could just clarify that it was the best use for the money, she suggested.

Commissioner Mike Kane pointed out that a similar study was done last time without any problems.

Commissioner Murguia told Guinn, “When I get letters from lawyers who make comments like you did, it insinuates that this commission would violate Kansas statute on how we would spend our money. I am sure you did not mean it like that. I would caution you about that in the future. This commission is very good at making sure we do things the way we are supposed to do it.”

Commissioner Gayle Townsend, who is an attorney, wanted more time to review the issue, as she had just received some of the information the same day. Often, issues go first to the Standing Committee meetings, but they didn’t this time. She had not made up her mind yet.

“You’ve put us in an awkward position. You want us to pick sides,” said Commissioner Kane to the groups, before proposing a study on the issue.

Apparently the commission is expecting the people who are working at the two agencies to continue to work there for at least six months, despite the fact that the UG Commission has approved a notice of termination of the agency’s funding, pending the study.

Commissioner McKiernan asked how the termination of the contract would affect the operations of the agencies, if it would negatively affect operations.

Commissioner Hal Walker, a retired UG attorney, said, “That would be another reason to get rid of both.”

He said that consolidation was approved by the people in a vote, and they did not expect consolidation to stop once it was approved in 1998, but that is virtually what happened. Anywhere the UG can consolidate, and operate more efficiently, is in the interest of the city, he added.

Commissioner Walker said many area cities have a tourism bureau, a chamber and an economic development department, which “to me, is ludicrous for an area that is basically contiguous and could be handled by a regional, consolidated service at a fraction of the cost.”

He said the fact that Wyandotte County has more tourists or that economic development grows is not the result of any single entity.

“The commission brings a lot of tourism and economic development here by making the tough decisions to give tax abatements, give incentives, and then we’ve got to hear about it from people who don’t understand that we’re competing with the rest of the world that’s doing the same thing,” Commissioner Walker said. “I don’t see the harm in studying this.”

While there weren’t any commission-level public meetings on the matter this year, Commissioner Walker said this wasn’t a “rush to judgment,” as the topic had been out on the street since the first of last year, and they had been vaguely informed by people of meetings that had occurred.

A new multipurpose arena built in western Wyandotte County could boost spending $47.6 million in the area, a consultant told the Unified Government Commission in a report tonight. However, it might not be a money-maker for the local government.

Bill Krueger, with CSL, a consulting firm in the arena and convention center field, presented examples of three types of convention or arena facilities that might be built. The UG is studying a convention center or multipurpose arena in conjunction with a new 250-room hotel proposed for the Hollywood Casino at Kansas Speedway area. Another expansion project in the area is the soccer training facility complex proposed next to the Schlitterbahn water park.

The multipurpose arena, with an $80 million estimated price tag, was one of three types of structures considered. Also considered were a convention center, with a $143 million construction cost; and an indoor multipurpose building, with an $18 million cost.

The one that was the most likely to succeed in this market was a multipurpose arena that might house a minor league hockey or basketball team, according to Krueger. Other events would be held there as well. The other two types of buildings might incur an annual operating deficit, the consultant said.

Even that one, according to the consultant, might not make a lot of money for the county. A .3 UG taxes to cost ratio for this facility estimated that the UG would take in a third in taxes in relation to what it is spending on the cost of the facility. The consultant said there were also indirect benefits that were not included in this estimate, such as increased business at nearby facilities that might result in increased amounts paid to the local government.

The 7,000 to 10,000-seat multipurpose arena facility would have additional square feet of space that could be open for events such as trade shows, he said. He listed operating projections of $340,000 to more than $1 million.

During his presentation, Krueger remarked that the Kansas City area market is saturated with some of these types of convention or multipurpose buildings already. He felt, however, that an arena in the Village West area could draw upon all of the area’s retail and entertainment attractions to work.

Besides the new hotel that is planned for the casino area, there also is a soccer training facility planned for an area that is next to the Schlitterbahn water park.

The exact site of the multipurpose arena was not discussed tonight.

Mayor Mark Holland said the next step in this process would be to talk to private partners who have an interest in it. The consultant said his written report should be available in two to three weeks.

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A hard freeze warning is in effect for Halloween, Oct. 31 evening, according to the National Weather Service.

Very cold air is expected to filter into the region on Friday, combining with light winds and clear skies to allow temperatures to fall below freezing by 10 p.m. Friday, the weather service said.

The temperatures will drop into the 20s throughout the area by sunrise on Saturday.

These temperatures are expected to effectively end the growing season for the region.
Today, the weather will be sunny with a high near 65. The north northwest wind will be 10 to 16 mph, with gusts as high as 23 mph.

Tonight, the low will be around 39. The north wind will be 10 to 15 mph, with gusts as high as 21 mph.

Friday, look for sunny skies and a high near 44. The north wind will be from 10 to 14 mph with gusts as high as 20 mph.

Friday night, Halloween, look for widespread frost after 3 a.m. The skies will be mostly clear, with a low around 26. The north wind will be 3 to 7 mph.

At 6 p.m. Friday, the temperature will be about 42 degrees, according to the weather service. By 9 p.m., it will be 34 degrees, and at midnight, it will be 31 degrees.

On Saturday, there will be widespread frost before 9 a.m. It will be 27 degrees around 6 a.m. The skies will be mostly sunny with a high near 47. A light east wind will become south southeast 5 to 9 mph in the morning.

Saturday night, the skies will be mostly cloudy with a low of 40.

Sunday, look for partly sunny skies with a high near 57.

Rain is in the forecast for Sunday night, when there will be a 30 percent chance of showers. On Monday, there will be a 50 percent chance of rain and a high of 61.

On Tuesday, Election Day, the forecast is partly sunny with a high near 56.