Steve Foutch, CEO of Foutch Brothers LLC, breathed a sign of relief May 12, when the 2017 session of the General Assembly adjourned without gutting the state’s historic tax credit program.
Foutch Brothers is counting on $6 million worth of the credits to help finance the $25 million conversion of Kemper Arena into Mosaic Arena, a two-level youth and amateur sports facility.
But in late March, soon after Foutch Brothers received final city approvals for its plan, a tax abatement and $1 purchase of the 43-year-old landmark, the firm received a disappointing letter from the Missouri Department of Economic Development. It said the state had hit its $140 million cap for 2017 historic tax credits.
That meant Foutch Brothers would have to wait until the new fiscal year starts in July to receive its $6 million from the new state historic tax allocation for fiscal year 2018. But even that wasn’t considered a gimme back in March because Gov. Eric Greitens and his Republican-led Legislature were threatening to slash or eliminate tax credits as part of their budget-tightening efforts.
That could still happen. But the $140 million historic tax credit cap was left intact for next fiscal year, meaning Mosaic Arena is a go.
Foutch, who had wanted to start work on the project in April, said Friday that his general contractor, McCownGordon Construction, probably would begin work in July or August and have it ready to open by July 2018.
He was speaking to a morning gathering of the Kansas City chapter of CCIM, an organization of commercial real estate professionals
“It’s been a four-year battle to get to this point,” Foutch told the brokers, bankers and other professionals, “and a two-year battle to win the historic tax credits.”
With help from Elizabeth Rosin of Rosin Preservation LLC, Mosaic Arena was granted a listing on the National Register of Historic Places in September. That made the arena project eligible for the $6 million in state historic tax credits Foutch Brothers requested plus another $6 million in federal historic tax credits.
But getting the arena on the register wasn't easy because it's less than 50 years old, Foutch said.
“It’s the only building on the register with an architect who’s still alive,” he added.
He was speaking of Kemper's famous German designer, Helmut Jahn, who not only is alive but still practicing. Jahn, whom Foutch learned about while working toward an architecture degree at Iowa State University, was just starting his career when he designed Kemper, which was notable for the exterior steel trusses that allowed it to be built without interior columns. It is considered an early example of high-tech modernism, which, despite the arena's age, helped it win historic designation.
Despite its architectural significance, however, officials of the American Royal Association wanted it to be torn down as part of the Royal’s ill-fated $60 million plan. It called for improvements to other buildings in its West Bottoms complex and replacement of Kemper Arena with a smaller events center for the Royal’s livestock and equestrian shows and other events.
Ultimately, however, the American Royal decided to a new $160 million complex proposed in Wyandotte County, and the City Council selected Foutch’s plan in May as the preferred redevelopment proposal for the facility.
One of the biggest challenges in completing Foutch’s two-level plan for the arena relates to the fact that the structure “is basically sitting on a beach," he said. Installing the second level of maple court space will cost about $6 million, partly because 10 beams supporting it will have to be extended down through 90 feet of sandy soil to bedrock.
Other inherited features, however, will be advantageous, Foutch said. Because the facility will attract crowds of 5,000 to 6,000, rather than 18,000, much of existing mechanical, restroom and concession space won’t be needed, Foutch explained. Instead it will become part of the 100,000 square feet of space his firm will lease to the arena’s naming sponsor, Mosaic Life Care, and several restaurant, retail, office and sports-related tenants.
Foutch said he already has commitments for 50 percent of that space. And use of the court space — including four basketball-sized courts on the lower level and eight above — is being snapped up quickly, too.
“We already have two major events booked for next July,” Foutch said, “and of the 52 weekends (during the first year Mosaic Arena is open), we have only eight left.”
With courts being used for practices, league play and tournaments across multiple age levels and sports, Foutch estimated that “we’re going to be running 200 events a day.”
In addition, KC Crew, an adult recreational sports organization with more than 6,000 members, has committed to renting the facility between 9 p.m. and midnight every night of the week.
Other users signed so far include SoPro Gaming, an Overland Park-based video gaming enterprise that will occupy 5,000 square feet; many of the metro area’s 85 club track teams; numerous private and charter schools; and Mosaic Life Care, which will occupy a clinic specializing in sports medicine.
Mosaic Arena also will feature a food and beverage facility in the soaring atrium and a 350-meter indoor running track above the upper-level bleacher seating.
The arena will offer bleacher seating for about 3,500 in its lower bowl and 5,000 bleacher seats in the upper bowl.
For those who would like one or more of the unused seats as a souvenir, Foutch said his firm will be auctioning off about 8,000 of them and other Kemper Arena remnants in the near future.