Commissioners frustrated by changes but say moving forward is better than leaving barns unfinished.
The American Royal project is moving forward under a new financial model. Unified Government (UG) staff and American Royal leaders walked commissioners through a revised STAR Bond plan Thursday night. The changes include a shift to a public bond sale, new construction timelines, and a smaller first issuance than earlier estimates. Commissioners said these updates were frustrating but also said finishing the project is better than leaving half-built barns sitting on the site.
The biggest change involves the bond structure. Earlier this year, the project expected a private placement of about $135 million. After a full revenue study and work with the underwriter, the realistic number for the first issuance is now 93 million dollars. Staff said the earlier figure was an informed estimate, but the project did not yet have the detailed financial information needed to support that amount. Several commissioners noted this is the second major adjustment to the plan and said they were concerned about changing the deal again.
The bond market requires a complete financial picture before a large private issuance can move forward. That includes proof of all private fundraising needed for the full project. Because the total cost is much larger than the dollars currently available, the team said the only way to avoid more delays is to issue a smaller public bond and complete the financing in phases.
A second issuance will still occur, but the structure is different. Instead of refinancing the first set of bonds, the plan now relies on parity bonds. The estimate for this future issuance is about 20 million dollars, though the exact amount will depend on the bond market and early project performance after the first sale.
Construction expectations will also change. The exhibition hall, known as the barns, must begin construction within 60 days of the bond sale. It must be completed within 18 months. Once the new facility opens, nearly all American Royal events must move to the Kansas City, Kansas campus. Rodeo related events are the only exceptions.
American Royal leaders said the barns are already more than 80 percent complete. They expect about three to four months of work before that section is finished. The arenas are about 50 percent complete. The site has received about $175 million in total investment, and roughly 95 percent of that amount has come from private fundraising.
Commissioners said these facts shaped their decision. Many said the updated agreement is not as strong as what they saw in the spring, but the community is better off with a completed facility than a stalled project. They said leaving unfinished barns in place would limit future economic activity and create long term problems for both UG and the surrounding area.
Rumors about the American Royal’s nonprofit status were also addressed. Staff and the organization confirmed the American Royal remains a 501(c)3 nonprofit in good standing. The concern in the community is not about losing that status. Instead, it involves the ability of a nonprofit to apply at the state level for property tax exemption. If granted in the future, that exemption could reduce the amount of property tax the UG receives from the site. Commissioners said they want residents to have clear information about how property tax exemptions work and who has authority over them.
The updated agreement includes new financial details for UG. The structure brings $5 million directly to the UG budget. UG will make $1.32 million in annual payments as part of the agreement. Additional revenue sources, including BPU pilot equivalent payments and levies outside the district, will return to UG over time.
The commission approved the amendment on an eight to one vote. District 6 Commissioner Phil Lopez cast the lone no vote after raising concerns about changing the deal so late in the process.
UG staff said the revised plan keeps Phase 1 on track and provides a realistic path to completing the project. They said it also reduces the risk of more construction delays and protects the long-term revenue outlook for both UG and the American Royal.
The next step is to finalize the legal documents with the underwriter and prepare for the public bond sale. Commissioners will receive updates as the project advances.
