Forum of Discontent

The County government is busy dreaming up new ways to spend money it doesn't have. Its latest scheme is a new arena in downtown Kalamazoo funded by a tax increase.

The Kalamazoo County Board of Commissioners sets arena discussions for June 2

KALAMAZOO -- The Kalamazoo County Board of Commissioners is expected to begin public discussion June 2 on the possible construction of a downtown Kalamazoo arena and proposals for new hospitality taxes to finance it.

Officials say the development of the arena -- a subject of privately financed studies for more than five years -- is far from a done deal because of uncertainty about costs, financing, users and project partners.

But preliminary studies have been encouraging, said Kalamazoo County Board Chairman David Buskirk.

Who would use the arena?

Speculation rose in 2006 when Kalamazoo-based Greenleaf Holdings LLC announced that it was purchasing the Wings Stadium complex and the Kalamazoo Wings. Earlier downtown-arena feasibility studies indicated that the project would require booking commitments by one or more users, and speculation was the K-Wings could play there.

Such a move could free the Wings Stadium property at Interstate 94 and Sprinkle Road for other development. Also, arena traffic might benefit the downtown Radisson Plaza Hotel & Suites, which is owned by Greenleaf.

In addition, Greenleaf's development of a new downtown office building for primary tenant Miller, Canfield, Paddock and Stone, a law firm, resulted in the legal group transferring ownership of its West Michigan Avenue office building and several other nearby properties to DTI.

Certainly such a wonderful plan would generate nothing but profits.

He said the county could consider putting a proposal for new restaurant, bar and rental-car surcharges, plus a rise in the county's hotel tax, on the November ballot for voters to decide.

Or not.

According to an October 2008 preliminary feasibility draft, one plan calls for developing a 7,000-to- 8,000-seat, multipurpose arena with a estimated construction cost of about $40 million. The proposed location is a 9-acre site at the west end of the Arcadia Creek development, bounded by Westnedge Avenue on the west, Michigan Avenue on the south, Rose Street on the east and Kalamazoo Avenue on the north.

"The choices are: It's not feasible; or it's feasible and there's support for it; or it's feasible but we don't support it," said Kenneth Nacci, president of Downtown Kalamazoo Inc., which spearheads central-city development.

Officials said project funding wouldn't come from a property-tax increase or general-fund dollars from the county or city of Kalamazoo.

Instead, Kalamazoo County Administrator Peter Battani said, the funding largely could be generated by a new 1 percent county sales tax on car rentals and food and drinks sold at restaurants and bars. Currently there is no local food and beverage tax for restaurants and bars.

Also, the county's current 5 percent tax on hotel rooms, used to promote tourism, could be increased to generate revenue for an arena.

Taxes on tourism are popular with local governments because they generate less public opposition since their constituents don't pay them directly. Of course, the taxes hurt local businesses and their employees.

County commissioners have until Aug. 11 to decide whether to place a countywide tax request for new surcharges on the November ballot. Commissioners are scheduled to discuss the arena project, and how to proceed with soliciting public feedback, at their June 2 meeting.

"Ultimately, if we're going to go forward with it, the people of the community will have to pay for it in their bills," Battani said. "I would love to see an arena downtown.
But we need to proceed very deliberately and very carefully, and thoroughly review it and hear from the public."

He would love to make us pay for it.

Development catalysts sought

A downtown arena is one of seven "transformative" development projects proposed by DKI under a 10-year plan that the Kalamazoo City Commission adopted last week.

Others include creating a downtown life-sciences campus, a new mixed-use development along the Kalamazoo River and expanded two-way traffic downtown.

Nacci said those projects could spur other downtown development.

"An arena for the sake of an arena is not the right thinking," Nacci said. "It has to be something that satisfies the Southwest region. An entertainment venue like an arena has to be able to position itself to spin off things like restaurants and residential opportunities. It has to be the driver that makes other things feasible."

So the plan is to tax restaurants, putting a few out of business, to create restaurants?

Buskirk said a temporary authority or committee could be formed this summer to get public feedback on the project and more closely examine funding options. Later, if the arena was built, a permanent arena authority could be created to operate it.

Grand Rapids' Van Andel Arena was developed and operates under an authority, and a similar independent board now runs the Kalamazoo/Battle Creek International Airport.

Is Van Andel funded by taxes? The Grand Rapids metro area is three times as large as Kalamazoo.

Kalamazoo Regional Chamber of Commerce President Steward Sandstrom said the chamber would consider new taxes on hotel, restaurant and rental-car fees to pay for an arena. But he cautioned that the plan must not raise prices to levels that would hurt the county's tourism trade.

Change happens on the margin, Steward.

Potential arena users

Western Michigan University could be a prime user of an arena.

"The university is very interested and has been a part of the discussion," said Robert Miller, WMU associate vice president for community outreach. "A possibility might be that WMU athletic teams would play games in an arena ... but absolutely no decisions have been made other than the university is clear it would not own, operate or manage such a facility."

At least they got that right. Moving WMU sports to downtown would make no sense. WMU is about one mile from downtown, which would make to difference to people who drive to games. If they aren't going out to eat downtown, it's because they don't like downtown. But it would be too far for WMU students to walk to the games.

Government never ceases looking for ways to get bigger.