The Unified Government Commission saved the T-Bones baseball stadium once before, in 2014, and on Thursday night, another lifeline was thrown their way.
UG commissioners mostly viewed the T-Bones as an essential part of the Village West picture, and approved a new agreement with them on Thursday night.
It will change from a lease to a management agreement. The deal is a restructuring; the UG would pay 55 percent of the T-Bones’ utility bills; and the UG will not be liable to pay $246,000 annually in property taxes, according to officials.
Jon Stephens, UG interim director of economic development, said the direct and indirect economic impact of the T-Bones is $4.2 million a year. However, attendance at the T-Bones games has declined in recent years.
“We view it as an integral part of the Village West development, as part of the No. 1 tourist attraction in the state of Kansas,” Stephens said.
The vote was 8-1 approving the deal with the T-Bones, with Commissioner Mike Kane voting no.
In May, the Board of Public Utilities voted not to waive $172,700 of the T-Bones’ overdue utility bill of $314,000. The BPU also voted unanimously in May not to give the T-Bones a special reduced rate for electricity and water. (See earlier story at http://wyandottedaily.com/bpu-says-it-wont-waive-t-bones-utility-payments/)
T-Bones are a regional tourism draw
During a public comment period, Bill Hurrelbrink, formerly the mayor’s spokesman, said the T-Bones were a great partner for the community, and the T-Bones are a great draw for the community. The economic impact of $4 million to the community is substantial, he said. It draws in people from a regional area of Topeka, Independence, Omaha, and Arkansas, he said. They spend money not only at the ballpark but also at Village West, he said.
In the last several years, the T-Bones have helped build ADA playgrounds across the community with the parks foundation, and have partnered with youth groups and other organizations, he added.
Lee Irvin said the T-Bones are an integral part of the Village West and Legends tourist attraction from a regional perspective.
“Where can you go to get this level of entertainment at an affordable price? It’s an amazing family venue that you can’t get anywhere else in the region,” he said.
He said it is good business because it is a $4 million economic impact against a $150,000 annual investment, with a business with a 15-year track record. It is especially good because there is substantial property tax savings.
An Olathe woman who is from Wyandotte County and works here said she was proud to have the T-Bones here. Some people with lower incomes can go out there and enjoy entertainment. While they can’t afford to go to the Royals, they can afford the T-Bones, she said.
“I can’t imagine the UG not supporting this type of business, because it’s a perfect business model for Wyandotte County, a perfect price point, a perfect area,” she said.
Lisa Thurlow of Overland Park, who was originally from the Turner area of Kansas City, Kansas, talked about the opportunities for youth who work at the stadium during the summer, and said she hoped there will still be an opportunity for kids to work there.
Matt Watkins of Kansas City, Kansas, said Adam Ehlert, owner of the T-Bones, has done a lot of work in the community during the past 15 years. He said it would be a shame if the UG did not support him in this endeavor, especially since he does a lot of work for the parks and the community.
Cheryl Reitmeyer of Kansas City, Kansas, a season ticket holder, said she has been a volunteer host family coordinator for three years for the T-Bones.
“How proud we are that we have professional baseball that’s affordable family fun here in Wyandotte County,” she said. “I can’t imagine that we would let that leave this county. What that does bring to the county is amazing.”
She believes the stands are filling up more this year with the extra marketing efforts.
Eric Martinez, who said he bought his first home in Wyandotte County, said one of the reasons he moved to the area was because he liked baseball.
“I want to do whatever I can to support Wyandotte County,” he said. He likes the T-Bones because it’s affordable, walkable, and one can bring one’s friends there.
The economic component is strongly in favor of Wyandotte County residents, as T-Bones games bring people into the community to stay at hotels, shop and eat at restaurants, he said.
‘Not fair to all citizens’
Jeff Bryant, BPU board vice president, said he was appearing as an individual in opposition to the deal.
“We enjoy the baseball game,” he said. “Like any other business, it needs to stand on its own.”
He doubted if the UG would help out many other businesses that may be having trouble.
The new agreement shows the UG is paying 55 percent of the utility bill. “The UG is not paying 55 percent, the residents of Wyandotte County are paying 55 percent,” he said.
Taxes already are high, and this helps support a for-profit business, he said.
“I don’t believe that is fair to all the citizens of our county,” Bryant said. Many license plates in their parking lot are not from Wyandotte County; therefore, Wyandotte County is subsidizing the entertainment for other counties, he added.
He believes the past due bill should be paid 100 percent, he said.
Marcia Rupp of Kansas City, Kansas, suggested turning the field from a baseball field in the summer into a football field in the winter.
“If we could somehow find a minor league football team, or the soccer was playing there for a while,” she said. “If we could find something to do in the winter ….”
Other professional stadiums do that, she said. “Something could be used all year and maybe bring in a little more revenue,” Rupp said.
Mayor: Why not ‘offer the best deal?’
Mayor Mark Holland said his thoughts were why not offer their best deal to their best partners. In 15 years, the T-Bones have brought in 3 million people, he said. Other cities have spent more on teams; for example, Jackson County, Mo., gave almost $6 million to the Chiefs and Royals, Holland said.
The UG has given a 30-year abatement to NASCAR, and $150 million in STAR bonds to the soccer stadium, he said.
“We have been in the public sports business in Wyandotte County, and it has paid huge dividends,” Holland said. All the STAR bonds paid off early, and the community is seeing the benefits of it, he added.
“We’re the No. 1 tourist attraction in the state and in the region,” Holland said. There are more than 10 million visitors outside a 50-mile radius, he added, with the T-Bones a big part of it.
The T-Bones were one of the first investors, when there was little at Village West, he said. Without their initial investment, Village West wouldn’t be where it is now.
Holland said he was comfortable with the level of incentive, because the investment yielding a $4 million plus return annually with an ancillary benefit from the T-Bones was worth the investment. He said it was a good investment and would bear a positive return.
Commissioner Brian McKiernan said it is a small business. He disagreed with the word “bailout,” and he said it was an “investment.”
“We are investing in an amenity that improves the quality of life for our citizens,” McKiernan said.
Markley: No option that would allow UG to pay zero dollars
Commissioner Angela Markley said although she didn’t support buying the baseball stadium, now they had to face reality.
“If we say no to this deal, we still have to pay taxes on a stadium we own, we still have to pay Legends common area fees, and parking lot fees, and some level of maintenance for a facility that is in our shining star tourist area,” Markley said. “The two options are we’re going to spend tax dollars on a stadium, or we’re going to spend tax dollars on a stadium that has an operation ready in a stadium, and that operation is going to pay part of those costs. There is no option that results in us paying zero dollars, because we own this facility.”
Commissioner Melissa Bynum said one of the things she has always appreciated about the T-Bones was its affordability. In answer to her question, UG officials said there would still be sales tax collected at the stadium.
Commissioner Hal Walker said the T-Bones had been a great amenity for the community.
“It’s the role of government, and I include the BPU, to do everything we can to make this community a livable, likable place,” Walker said.
“I think this is an excellent deal. It’s between keeping them or losing them, and I want to keep them around for a while longer,” he said.
Commissioner Jane Philbrook said she didn’t mind paying taxes to support a group of people so dedicated to bringing something to the community that kids and families could enjoy, that is affordable and helps create a bond in a family.
History of the deal
The UG took over ownership of CommunityAmerica Ballpark, where the T-Bones play, in 2014, Stephens said. The T-Bones are now a tenant, leasing the stadium.
In June of 2016 a demand letter was sent to the T-Bones, and they responded their income was not sufficient to meet the current lease obligations, he said. The UG then paid $125,000 in September of 2016 for the obligations related to property taxes on the parking lot, and The Legends common area and maintenance (CAM) charges, he said.
The UG used $5.5 million in STAR bonds when it purchased the T-Bones stadium in 2014, and the bonds were paid off in December of 2016, so there is no debt now on the stadium itself, he said.
Independent auditors determined that the declines in attendance correlated with the revenue projections, Stephens said. The sales and travel expenses are consistent with the size and type of team, he said. Reviews of financial transactions showed the T-Bones practiced proper financial controls, he said.
Stephens said staff compared 11 publicly owned baseball teams, and several were consistent with the T-Bones, some others did not require teams to pay the utilities, and most included provisions for revenue-sharing arrangements.
Details of the deal
The UG is moving from a lease agreement to a management agreement, he said. The T-Bones will be named as manager of the facility. The UG and T-Bones will be trying to change the tax status on the stadium, and if granted, the UG will not be liable for $246,000 in property taxes annually for the stadium, he said. Also, the T-Bones will not pay an annualized lease payment to the UG, he said.
The new agreement would change the term from 20 years, ending in 2034, to a six-year agreement ending in 2022, Stephens said.
The UG would be responsible for the Legends parking lot property tax, about $119,000 a year, and the CAM charges at about $25,000 a year, he said.
Under the new agreement, the Board of Public Utilities’ bills would be put in the UG’s name for bills beginning in June 2017, he said. There are also UG utility bills for the stadium to be put in the UG’s name. Under the agreement, the T-Bones would pay the UG a discounted rate of the total bill, estimated to be 45 percent of the total bill, he said. The electric rate would be set at 6.5 cents per kilowatt hour, with the water rate at $1.77 per CCF, he said.
The UG would pay the remaining cost of the utility bill of the stadium, which is estimated at 55 percent of the bill, he said.
The T-Bones would agree to pay past due bills over four years at $20,000 per year, he said. The unpaid UG sewer and stormwater bills would be paid at $3,000, which is reduced from the $6,000 amount owed.
The T-Bones should be able to cover the outlined costs, since the contract used actual performance numbers, he said.
Also, he said the T-Bones will be required to obtain a surety bond of $135,000, which will include the annual utilities estimate with sales taxes and payment in lieu of taxes fee of $115,000; and one-fourth of other obligations paid by the UG, estimated at $20,000.
Stephens said the T-Bones have made efforts to improve attendance and revenue, including improved sales efforts, group ticket sales, increased promotions, and increased corporate sales.