Kemper Arena Redevelopment Plan Wins Key Tax Incentives

Feb 2, 2017

An ambitious $30 million plan to convert the Kemper Arena into a bustling center for amateur athletics won support for tax incentives Thursday from a public development agency.

The Planned Industrial Expansion Authority approved a 12-year property tax abatement for the redevelopment project of the arena in the West Bottoms being pursued by Foutch Brothers. The PIEA also authorized up to $24 million in revenue bonds for the project.

The Foutch redevelopment plan calls for inserting a second floor in the arena at the balcony level, creating two floors that would accommodate 12 basketball courts. It also would create a five-lane, 350-meter indoor running track, one of the longest in the Midwest, and 100,000 square feet of commercial space.

Steve Foutch, CEO of the firm, said his firm already has pre-leased 60 percent of the basketball court time and 20- to 25 percent of the commercial space. The facility would be operated 18 hours per day, year-round, and employ 80 people. 

Foutch Brothers, LLC plans to build a 350-meter indoor running track in Mosaic Arena.
Credit Foutch Brothers, LLC

Kemper Arena was Kansas City’s premier concert and athletic facility when it opened in 1973, but it became obsolete after the Sprint Center opened in 2007. It's costing the city $1 million annually to maintain and officials have been anxious to find a new use.

The building already has been designated to the National Historic Register, allowing the use of federal and state historic tax credits to assist its financing. The Foutch Brothers and Bill Haw, a West Bottoms property owner, have pledged $3 million in private equity.

Foutch said renovation work could begin as early as mid-April if the remaining hurdles are overcome. That includes obtaining a non-compete agreement from the Sprint Center, rezoning and acquiring the arena from the city for a nominal fee. 

The Kansas City Council is expected to consider the transfer later this month. Foutch said it would take about 12 months to complete the first phase of the renovation.

The developer said some of the major tenants already on board include KC Crew, an adult athletic league; the Special Olympics of Missouri and Kansas; SoPro, a business catering to computer gamers, and Mosaic Life Care.

The redevelopment plan calls for inserting a second floor into the arena to accommodate 12 basketball courts for tournaments.
Credit Foutch Brothers, LLC

Mosaic Life Care has signed a 10-year naming rights agreement that will rename the facility as the Mosaic Arena. The healthcare firm also will be a tenant with services including a clinic, fitness training and massage therapy.

KC Crew is expected to run adult leagues at the arena that will go from 9 p.m. to midnight daily. Other youth programs will use the facility from 4-9 p.m. and attract 1,000 youths on average per night, Foutch said.

“This will be a game changer for the whole West Bottoms area,” he told the PIEA board. “It will turn a quiet neighborhood into something vibrant.”

He added a dozen tournaments already have agreed to use the planned new Mosaic Arena including Futsol indoor soccer tournament. In addition, 85 local track teams also plan to train at the arena.

The 12-year property tax abatement covers the building, which currently is city owned and pays no taxes. It will be 100 percent for 10 years, 50 percent for two. Foutch will pay property taxes on the land, $30,000 annually.

The $24 million in revenue bonds will allow the developer to not pay sales tax on construction materials. Permanent financing is being pursued, and Foutch said U.S. Bank and Commerce Bank are among the banks that have been approached. In the event the project failed financially, Foutch would be responsible for repaying the loans — no public funds will be at risk.

When completed, the lower bowl of the arena will have 3,500 seats, the new upper bowl will accommodate 5,000 people.

Kevin Collison is a freelance contributor for KCUR 89.3.