October 19, 2011

Sedgwick County commissioners approve letter of intent to sell Kansas Coliseum

Johnny Stevens jumped over his first hurdle Wednesday to buy the Kansas Coliseum complex when county commissioners agreed to sign a letter of intent for the sale and take the property off the market for 60 days.

Stevens is offering $1.5 million for Britt Brown Arena, the heart of the complex, and the Kansas Pavilions. He plans to lease space to the National Institute for Aviation Research. He had tossed around a second plan to offer $500,000 for just Britt Brown but has taken that off the table.

The complex has been valued in the past at $22 million, though that value probably has declined since the arena was closed last year.

Commissioner Tim Norton called the vote on the letter of intent one of his toughest in 11 years on the bench.

Norton said he wasn't sold that Stevens' offer — first reported last week on — was the best the county could get.

But like other commissioners, Norton also pointed out that there hasn't been a line of people ready to write a check for the complex off I-135 at 85th Street North.

Commissioner Karl Peterjohn said he was encouraged that Stevens, an oilman who developed the Waterfront, hasn't asked for incentives for the project. Stevens has been vocal in opposition to government subsidies for private business.

The only board member who voted against the letter of intent was Richard Ranzau, who received campaign contributions from Stevens and said he was worried about people's perceptions that Stevens was getting a sweetheart deal.

Ranzau expressed concern that the county had pulled a request for proposals for the complex, the future of which has been uncertain for years.

"I think we could have gotten to this with an RFP," Ranzau said of Stevens' offer to buy the property.

Ranzau also speculated that the county has deliberately allowed the complex to deteriorate after Intrust Bank Arena opened downtown to make a sale more palatable. He questioned whether the county has made a true effort to run the pavilions at a profit.

But other commissioners said developers have known that the county was shopping the complex around and could have stepped up with an offer at any time, as Stevens did.

"I take exception to the words 'special deal.' This is not a special deal," Commissioner Dave Unruh told Ranzau.

The pavilions

In 2009, the county rejected three proposals for the Coliseum, including a plan to turn it into a rodeo resort. The county had issued a request for proposals at the time.

County Manager William Buchanan said the county projects that the pavilions, which remain open, will continue to lose money this year and may lose even more when an equestrian center at the Kansas Star casino in Mulvane opens in 2014.

The pavilions, which the county has committed to keeping open through 2016, require a county subsidy to operate. The budgeted subsidy next year is $584,000 but likely will grow to more. The estimated subsidy this year is $743,300. The pavilions are used for events like horse shows, livestock shows, swap meets and dog shows.

Groups that use the pavilions have pressured commissioners to keep them open, especially because tax money from the 1 percent sales tax voters approved for Intrust Bank Arena helped pay for improvements there.

Stevens' letter of intent calls for him to have 60 days to do feasibility and engineering studies.

Stevens will pony up $50,000 in earnest money, to be returned if he finds that the complex is not suitable for his plans.

What about NIAR?

Norton said he wants to see a letter of intent from NIAR too. NIAR would expand at the Coliseum to accommodate potential new projects, but executive director John Tomblin would not specify last week what those would be. Tomblin was in a meeting Wednesday and unavailable.

Tracee Friess, manager of marketing and communication for NIAR, said the institute at Wichita State University had not been approached about signing a letter of intent. She said the institute would be willing to look into one. Tomblin cautioned last week that nothing was a done deal, and he said NIAR was looking at other locations for expansion.

Friess said Wednesday that that was still the case.

"We're in an exploratory phase," she said.

Park City Mayor Emil Bergquist expressed concern about commissioners approving a sale to Stevens based on the idea of NIAR expanding there only to have something else happen with the site down the road.

He asked if there could be a stipulation that Stevens use the site only for NIAR.

Norton said commissioners have a lot to think about.

"Whether it's the best proposal for the citizens is what we'll consider in the next 60 days," Norton said, adding "I would hate to sell it and then find out that NIAR was not part of the deal."

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