multi-use arena market feasibility study interstate 70 ... · january 2007 prepared for: city of...

MULTI-USE ARENA MARKET FEASIBILITY STUDY

INTERSTATE 70 & LITTLE BLUE PARKWAY INDEPENDENCE, MISSOURI January 2007

CANYON RESEARCH SOUTHWEST, INC. COMMERCIAL REAL ESTATE RESEARCH AND ANALYSIS

651 DELAWARE AVENUE, SUITE 139 / BUFFALO, NY 14202 / (716) 362-1203


INTERSTATE 70 & LITTLE BLUE PARKWAY INDEPENDENCE, MISSOURI January 2007 Prepared for:

City of Independence, Missouri 111 East Maple Independence, MO 64051-0519

Prepared by:

Canyon Research Southwest, Inc. 651 Delaware Avenue, Suite 139 Buffalo, NY 14202

PR# 06-11-09

CANYON RESEARCH SOUTHWEST, INC. COMMERCIAL REAL ESTATE RESEARCH AND ANALYSIS

651 DELAWARE AVENUE, SUITE 139 / BUFFALO, NY 14202 / (716) 362-1203

January 19, 2007 Jim Harlow City of Independence, Missouri 111 East Maple Independence, MO 64051-0519 RE: Multi-Use Arena Market Feasibility Study Interstate 70 & Little Blue Parkway; Independence, Missouri Dear Mr. Harlow; Attached are the findings from the Multi-Use Arena Market Feasibility Study conducted on a parcel of land located at the northeast corner of Interstate 70 and Little Blue Parkway. The preliminary development plan calls for a 6,000-seat multi-use arena accompanied by an entertainment/retail district. The Multi-Use Arena Market Feasibility Study evaluated the short-term development potential of both the multi-use arena and entertainment/retail district. Upon review of the report, should any questions arise or additional information requested, contact me directly at (716) 362-1203. Respectfully submitted, CANYON RESEARCH SOUTHWEST, INC. Eric S. Lander, Principal ESL:dld

Canyon Research Southwest, Inc. i

T A B L E O F C O N T E N T S Page # Tab # SUMMARY OF MAJOR FINDINGS ............................................... ii INTRODUCTION .................................................................................... 1 1

Study Objective and Organization .......................................................... 1

ARENA MARKET FEASIBILITY ANALYSIS ........................... 2 2 Sports Facilities Development ................................................................ 2 Kansas City Area Sports Facilities .......................................................... 4

• Existing Sports Facilities ................................................................ 4 • Active Sports Facility Development ............................................... 7

Arena Demand Evaluation ...................................................................... 10 Conclusions ............................................................................................ 18 RETAIL MARKET FEASIBILITY ANALYSIS ......................... 19 3 Entertainment District Concept ............................................................... 19

Metropolitan Kansas City Retail Market ................................................. 20 Historical Market Trends ......................................................... 20 Retail Sub-markets.................................................................... 23 Conclusions .............................................................................. 26

Competitive Retail Market Conditions ................................................... 27 Independence Center Retail Hub ............................................. 27 Kansas City Entertainment Retail Districts .............................. 31 Forecast Retail Space Demand ................................................ 39

Entertainment District Site Evaluation .................................................... 40 Conclusions ............................................................................................. 43

STUDY CONCLUSIONS ...................................................................... 45 4 Development Plan ................................................................................... 45 Forecast Arena Demand .......................................................................... 46 Forecast Retail Sales ............................................................................... 47 ADDENDA .................................................................................................. 48 5 Exhibit A: Canyon Research Southwest, Inc., Client Roster............ 49 Exhibit B: Resume of Eric S. Lander, Principal ............................... 52

Canyon Research Southwest, Inc. ii

SUMMARY OF MAJOR FINDINGS The City of Independence, Missouri is evaluating the viability of constructing a 6,000-seat multi-use arena and entertainment/retail district on a vacant site located at the northeast corner of Interstate 70 and Little Blue Parkway. Canyon Research Southwest, Inc. has prepared a Sports Arena Market Feasibility Study that evaluates the short-term development potential of a 6,000-seat multi-use arena and accompanied entertainment and retail district. The report’s major findings are summarized in the text below.

Feasibility of Multi-Use Arena Development The Kansas City area has a number of event facilities that serve the sports and entertainment markets. A major market like Kansas City is generally able to support at least one major arena facility and one minor venue. Growing markets are developing modern mid-size facilities in addition to large, primary facilities. Kansas City’s convention and baseball markets have supported recent new development with the opening of the Overland Park Convention Center in 2002, the Community America Ballpark during 2003 in Kansas City, Kansas and the scheduled opening of the Sprint Center in November 2007. However, Kansas City’s sports market doesn’t offer a modern mid-size arena. The 30-year old Kemper Arena in downtown Kansas City, Missouri is functionally obsolete when compared to new, modern arenas. To fill this void, the 18,500-seat Sprint Arena is now under construction in downtown Kansas City, Missouri. Completion of this major arena is not expected to have a significant impact on the feasibility of a mid-size suburban arena, as they would cater to distinctly different sports and entertainment markets. The new downtown arena is too large to house such sports franchises as minor league hockey, MILS, and ABA teams. Also, smaller family events and concerts would be more prone to seek a mid-size arena. The proposed Independence multi-use arena would be designed to support these minor league sports franchises and special events. Kansas City’s existing demographics and inventory of sports venues suggests a mid-size arena is supportable. To support feasible development the proposed Independence arena must capture one or more primary sports tenants as well as a sufficient number of annual event dates. The Kansas City sports market appears to be large enough to lure a minor league hockey team franchise. The potential may also exist to attract MISL and ABA franchises. Competitive advantages for the Independence arena site include its proximity to the Independence Center retail hub, favorable primary trade area population and income levels, direct access and visibility via Interstate 70, and location within growing eastern Jackson County. Similar efforts to develop mid-size arenas in the Kansas City area communities of Overland Park and Olathe using public assistance have failed. Public assistance will likely be required to fund both capital and operating costs. Potential public financing tools include tax increment financing, transportation development district and STAR bond financing. Several recently constructed mid-sized arenas throughout the country have incorporated retail and entertainment districts. The construction of retail space adjacent to the proposed arena would enhance the potential to support feasible public assistance.

Canyon Research Southwest, Inc. iii

Feasibility of Entertainment District Development A 6,000-seat sports arena and associated entertainment and retail district is being proposed for development at the northeast corner of Interstate 70 and Little Blue Parkway in suburban Independence, Missouri. Throughout the country destination entertainment and retail districts are being developed in conjunction with newly constructed multi-purpose arenas, capitalizing on the large event attendance throughout the year. Arena-based destination entertainment and retail districts are generally positioned to support a vibrant day and nightlife through the tenancy of theme restaurants, nightclubs, specialty retailers and entertainment venues. Arenas have the greatest economic impact upon restaurants, hotels, transportation, tourism, and convention business. Three multi-use arenas anchored by new Central Hockey League franchises opened for the 2006-07 season. Each multi-use arena features a suburban location and is integrated into a large-scale, mixed-use urban center featuring restaurants, nightclubs, shopping and entertainment venues. These new arenas suggest that retail development is appropriate adjacent to the proposed arena in Independence, Missouri. The proposed arena site possesses the necessary property characteristics to support development of an entertainment and retail district, including sufficient access, visibility, exposure, trade area demographics, and location within a major retail hub. A growing trade area population and business community, limited presence of upscale retailers and pent-up upscale retail space demand provides the opportunity to attract restaurants and specialty retailers. The multi-use arena provides retailers and restaurants with a large and captive customer base.

Study Conclusions

Development Plan The multi-use arena proposed for the northeast corner of Interstate 70 and Little Blue Parkway in Independence, Missouri if tentatively designed for a seat capacity for 6,000 spectators. The mid-sized multi-use arena is designed to compliment existing sports and entertainment facilities in the Kansas City area. Kansas City’s demographics and inventory of sports venues suggests a mid-size arena is supportable. To support feasible development the proposed Independence arena must capture one or more primary sports tenants as well as a sufficient number of annual event dates. The Kansas City sports market appears to be large enough to lure a minor league hockey team franchise. The potential may also exist to attract MISL and ABA franchises. CHL franchises operate in arenas ranging in size from the 4,986 to 10,400 seats. The average arena size seats 6,793 spectators. The three CHL franchises opening play during the 2006-07 season all serve as the anchor tenant of a new 5,100- to 6,200-seat multi-use facility designed with club seats, luxury suites, excellent spectator sight lines, concessions and flexibility to host a wide range of

Canyon Research Southwest, Inc. iv

events. Each multi-use facility also features a suburban location and is integrated into a large-scale, mixed-use urban center. Therefore, the seating capacity for the proposed arena in Independence, Missouri appears to meet the requirements of minor league hockey and other sports leagues and special events. To enhance the spectators overall experience and generate additional revenues mid-sized suburban arenas now incorporate a retail component. The tenancy of these accompanied retail districts consists predominantly of restaurants, nightclubs, entertainment venues and some specialty shops. The market positioning of the retail district is to create a vibrant entertainment and retail environment that is complimentary to the events hosted by the multi-use arena. Creating a vibrant destination entertainment and retail district requires building a sufficient critical mass of space. Most successful projects support a minimum of 200,000 square feet of retail space. The preliminary master plan for the once proposed arenas in Overland Park and Olathe included 333,941 to 572,500 square feet of shops and pad space. It is recommended that 200,000 to 300,000 square feet of destination entertainment and retail space accompany the multi-use arena proposed in Independence, Missouri. This inventory of space is sufficient to generate high retail sales volumes on non-event nights.

Forecast Arena Demand The multi-use arena proposed Independence is anticipated to serve as the home for one or more minor league sports teams with a CHL team the most likely anchor tenant. The proposed 6,000-seat multi-use arena is conservatively forecast to host 100 events per year and a total attendance of 387,500 spectators. These demand forecasts assume that the arena houses at least one anchor tenant, is managed by a national sports facility management company, and hosts such special events as concerts, family shows, amateur sporting events and conventions/trade shows. These event and attendance forecasts do not include such community activities as high school graduations; municipal and public meetings; and state basketball tournaments.

Proposed Multi-Use Arena; Independence, Missouri Forecast Annual Event Schedule & Attendance

# of Average Annual Event Type Events Attendance Attendance Minor League Hockey 32 4,500 144,000 Amateur Sports 8 2,000 16,000 Concerts 15 5,500 62,500 Family Shows 10 4,500 45,000 National Sporting Activity 10 7,500 75,000 City-wide Conventions 5 5,000 25,000 Private Catered Events 10 500 5,000 Consumer/Convention/Trade Shows 10 1,500 15,000

Totals 100 3,826 387,500

Canyon Research Southwest, Inc. v

The proposed 6,000-seat multi-use arena will have a significant economic impact on the community. Direct impacts measure the spending and job creation that occurs as a direct result of the operations and activities that occur within the arena. Indirect impacts consist of re-spending of the initial or direct expenditures, or the supply of goods or services resulting from the initial direct spending within the arena. Operation of the proposed multi-use arena is forecast to generate a first-year direct economic impact in the form of job creation and spending estimated at approximately $13.7 million. Using a multiplier of 1.75, the direct and indirect (total) economic impact is estimated at approximately $24.0 million.

Forecast Retail Sales Revenues The proposed multi-use arena’s entertainment and retail district will be designed to attract customers on both event and non-event nights. Its location off Interstate 70 within eastern Jackson County’s largest retail hub will assist in drawing customers on non-event nights. Retail sales for the entertainment and retail district were estimated based on several sources, including:

• Dollars & Cents of Shopping Centers 2006 published by the Urban Land Institute; • Retail sales data published by the International Council of Shopping Centers;

• Financial data published in the Annual Reports of national tenants that commonly occupy

destination entertainment and retail district; and

• Consultant’s internal database on actual retail sales of similar destination entertainment and retail developments operating in the Kansas City area.

Retail sales volumes for the proposed entertainment and retail district were forecast taking into consideration both competitive retail market forces (i.e., direct competition from similar destination retail developments operating in the Kansas City) and trade area demographics (i.e., population and income levels, age distribution and educational attainment) were considered. During the first full year of operation the entertainment and retail district accompanying the proposed multi-use arena in Independence, Missouri is forecast to generate retail sales of $310 per square foot of retail floor area, equating to total sales of approximately $62 million to $93 million.

Canyon Research Southwest, Inc. vi


INTERSTATE 70 & LITTLE BLUE PARKWAY INDEPENDENCE, MISSOURI January 2007

Canyon Research Southwest, Inc. 1

INTRODUCTION

Study Objective and Organization The City of Independence, Missouri has contracted with Canyon Research Southwest, Inc. to prepare a Multi-Use Arena Market Feasibility Study that evaluates the short-term development potential of a 6,000-seat sports arena and entertainment/retail district located at the northeast corner Interstate 70 and Little Blue Parkway. The market study for the arena component commences with an overview of national sports facilities development trends. Existing and proposed sports facilities in the Kansas City area will also be identified and the potential to support additional facilities quantified. The Multi-Use Arena Market Feasibility Study also evaluates the potential of developing entertainment/retail uses adjacent to the multi-use arena, commencing with a survey of such comparable entertainment retail centers and districts as Country Club Plaza, Zona Rosa, The Legends at Village West, and Kansas City Power & Light District. The competitive market analysis also includes short-term demand forecasts for upscale retail space designed to quantify the need for additional space within the metropolitan Kansas City area as well as a site-specific evaluation designed to determine the ability of the proposed multi-use arena site to accommodate entertainment/retail development. Based on the study findings, the Sports Arena Market Feasibility Study addressed supportable arena size and square footage of entertainment retail space, arena event demand forecasts and forecast retail sales.


ARENA MARKET FEASIBILITY ANALYSIS The preliminary plan calls for the construction of a 6,000-seat multi-use arena on the site at the northeast corner of Interstate 70 and Little Blue Parkway in Independence, Missouri. This section of the report evaluates the multi-use arena’s short-term development potential.

Sports Facilities Development The U.S. is in the midst of a boom in the upgrading, expanding, and improving of sports arenas and stadiums. This trend has led to the development of new and renovated facilities, not only in major professional sports, but also in minor leagues. The proposed sports arena in Independence, Missouri is in response to the increased demand by the sports and entertainment markets, which have grown in recent years. The construction of new facilities has led to a great deal of franchise movement, as teams are relocating to markets with newer venues that offer better financial opportunities. Many new sporting arenas and stadiums are being designed as diverse entertainment and activity centers. These new sporting facilities require significant regional support from business, political, and civic leadership. During the past 15 years, 79 major league stadiums and arenas have been modernized or developed in the United States at a total cost of $12 billion. In addition, 70 minor league facilities have been constructed during the same time period. There have been 20 facilities developed or modernized for National Football League teams, at a cost of $4.5 billion. In Major League Baseball, facilities opened during the 1990s in Chicago, Baltimore, Texas, Atlanta, Colorado, Arizona, Tampa Bay, Anaheim, and Cleveland. In recent years, new baseball stadiums have been constructed in Seattle, Houston, Milwaukee, San Francisco, Detroit, Pittsburgh, San Diego, and Cincinnati. The national trend in new arena and stadium construction has not been limited to downtown urban areas housing major professional sports franchises. Over the past 15 years suburban and mid-sized metropolitan areas have also developed sports facilities. In these markets the sports facilities have been built to serve an expanding entertainment market featuring family shows, emerging professional sports, concerts, and performing arts. These facilities are generally in the 8,000 to 12,000-seat range and often provide a cost-effective alternative for entertainment and sporting events. In contrast, new arena construction in large markets has mainly served to replace existing facilities that have become functionally obsolete. The recent growth of sports facility development has also led to private-sector investment as new revenue streams such as facility naming rights and premium seating have allowed facilities to generate higher revenues and rates of return. In the past arenas were exclusively constructed and subsidized by the public sector as a community service without an emphasis on generating financial returns. Despite the growing trend in privately developed sports facilities, public-sector participation is still often necessary to assure project feasibility. While owners of a privately developed sports facility have an incentive to maximize profits, public investment in infrastructure, funding or tax relief is often necessary both financially and to establish a mutual partnership.


Regions supporting the development of new sporting facilities experience a number of quantifiable and intangible benefits. First, new facilities generate substantial economic impact during construction. When considering constructing a new stadium for the Padres, the City of San Diego commissioned a study by Deloitte & Touche which concluded that stadium construction alone would result in $1.1 billion in spending and would create 17,000 full-time temporary jobs as well as $1.8 billion in new ancillary development. An analysis prepared for the Maryland Stadium Authority suggests that an average Baltimore Orioles season generates $117 million in gross sales; $44 million in earnings; and over 1,500 full-time jobs. Total statewide economic impact amounts to $226 million in gross sales; $77 million in earnings; and 2,340 full-time jobs. The study also forecast that 1.6 million out-of-state fans, or 46 percent of total attendance, were attracted to Baltimore from outside of the area. These visitors spend $46 million in the Baltimore area representing new economic growth to the region. Second, successful new sporting arenas and stadiums have also generated substantial retail sales and development activity surrounding the facility. Immediately following the opening of Jacobs Field in downtown Cleveland, more than 20 restaurants or retail establishments opened and more than 85 storefronts were renovated at a cost of $1.2 million. In the year following the opening of Coors Field in downtown Denver, studies point to an increase of over $40 million in taxable sales; $20 million was spent in new downtown businesses; and more than 25 restaurants opened. One in every three tourists visiting Denver mentioned that they had attended or would like to attend a Rockies game. Further, a report by the Phoenix Finance Department demonstrated that fans attending Arizona Diamondback games during the first year of Bank One Ballpark contributed to a 34.1 percent increase in City sales tax revenue in the downtown area. Restaurants and bars downtown reported a $12.1 million increase in sales during the Diamondbacks first season. The third major impact on regions supporting new sporting facilities involved the major and special events that are hosted. Such events as college bowl games, regional basketball tournaments; all-star games; and post season games tend to draw from a regional and national basis, attracting new dollars into the region in the form of lodging, entertainment, and dining revenues. Fourth, the intangible impact of a new sports franchise and corresponding facility is its positive influence on a community’s marketability and potential to attract business. The Jacksonville Sports Development Authority and Chamber of Commerce reported that the Jacksonville Jaguars (NFL) and Alltel Stadium enrich the local economy by an estimated $131 million a year from visitors buying tickets, eating at restaurants, and staying at hotels. Additionally, the team and facility have been indirectly responsible for the creation of upwards of 50,000 new jobs by virtue of companies expanding or relocating to Jacksonville as a result of a successful marketing campaign.


Kansas City Area Sports Facilities With a population in excess of 1.8 million the metropolitan Kansas City area supports several professional sports teams. Long standing Kansas City sports franchises include the Kansas City Chiefs (NFL), Kansas City Royals (MLB), Kansas City Wizards (MLS) and Kansas City Explorers (World Team Tennis). New sports franchises include the Kansas City T-Bones in 2003 (Northern League minor league baseball) and Kansas City Brigade in 2006 (Arena Football League). Local sports franchises recently closing operations include the Kansas City Comets in 2006 (MILS), Kansas City Knights in 2005 (American Basketball Association) and Kansas City Outlaws in 2005 (United Hockey League). This section of the report provides an inventory of existing and pending sports facilities in the Kansas City market. Existing Sports Facilities The Kansas City area supports several sports facilities. Enclosed arenas include the 18,344-seat Kemper Arena and 10,721-seat Municipal Auditorium. Other major sports venues include the Truman Complex (78,000-seat Arrowhead Stadium and 41,000-seat Kauffman Stadium); 5,768-seat Community America Ballpark; and the 2,600-seat Barney Allis Plaza Tennis Center. A brief description of sports facilities in the Kansas City area is provided in the text to follow. Kemper Arena Kemper Arena is located within the American Royal Center, a multi-facility complex in downtown Kansas City, Missouri. American Royal Center consists of Kemper Arena, 5,000-seat Hale Arena, 500-seat Wagstaff Theatre and over 325,000 square feet of exhibition space. Global Spectrum, a division of Philadelphia-based Comcast-Spectacor, manages Kemper Arena. Kemper Arena was built in 1974 at a cost of $22 million and is owned by the City of Kansas City, Missouri. The arena seats 18,344 for concerts, 17,647 for hockey and 17,585 for soccer. Additional facility amenities include 21 suites; ten permanent concession areas; and 7,000 on-site parking spaces. Kemper has 18,046 square feet of floor space, increasing to 30,000 square feet with the seats retracted. In 1997, a $23 million expansion project added 2,000 more seats, upgraded the lower level seating, added four restrooms and a new east lobby. Kemper Arena’s primary tenants are the Kansas City Brigade (Arena Football League) and the American Royal Rodeo and Livestock Show. The Kansas City Brigade is a new franchise playing its first season in 2006. For the season the Kansas City Brigade reported the third highest attendance among 19 teams in the Arena Football League totaling 121,875 spectators in eight games. The team’s attendance averaged 15,234 per game, ranging from 12,814 to 16,523 per game. Other events held at Kemper Arena include family shows, concerts and basketball. Both the Kansas City Comets (MILS) and Kansas City Outlaws (United Hockey League) recently folded and ceased operations at Kemper Arena. The Comets played a 20-game home schedule and had averaged 5,000 to 6,000 spectators per game before suspending operations after the 2005 season. The Kansas City Outlaws of the United Hockey League (UHL) played the 2004-05 season in Kemper Arena and averaged 2,800 fans per game. The team suspended operations prior to the 2005-2006 season.


Over the years several other sports franchises have also failed at Kemper Arena. Former tenants include the Kansas City Blades (IHL); Kansas City Red Wings (CHL); Kansas City Blues (CHL); Kansas City Scouts (NHL); Kansas City Kings (NBA); Kansas City Attack (NPSL); Kansas City Explorers (WTT); and the Big 12 Men’s Basketball Tournament. Based on Kemper Arena’s downtown location, large seating capacity, and antiquated design and event facilities, the venue is not considered directly competitive to the sports arena planned in Independence, Missouri which will be designed to accommodate mid-size entertainment and sporting events. To replace Kemper Arena, the 18,500-seat Sprint Arena is now under construction downtown and scheduled to open in October 2007. The Sprint Arena will be discussed later in the report. Municipal Auditorium Municipal Auditorium is located in downtown Kansas City, Missouri as part of the Kansas City Convention Center. The complex facilities include 388,800 square feet of column-free exhibit space on one floor; another 55,000 square feet of 2-story exhibit space; 45 meeting rooms; the 2,400-seat Bartle Hall fine arts theatre; and the 10,721-seat Municipal Auditorium. Opened in 1936, the 7,316-seat Municipal Auditorium plays host to UMKC basketball games, the Shrine Circus, and concerts. The arena’s seating capacity can be increased to 10,721 with the installation of 3,405 temporary seats. Other arena features include a 92-foot ceiling height; 26,200 square feet of floor space; special sports lighting; lighted marquee; box office; show office; coat check; restrooms; and concessions. Spectators enter Municipal Auditorium through a 3,600 square foot Grand Foyer. The arena is also connected by covered walkways to the Convention Center, Conference Center and the Auditorium Plaza Garage. Despite a similar seating capacity, given the Municipal Auditorium’s age, downtown location, and antiquated design and facilities, it would not be considered direct competition to the sports arena proposed in Independence, Missouri. Truman Sports Complex The Truman Sports Complex is located in suburban Jackson County, Missouri near the intersection of Interstates 70 and 435, approximately eight miles west of the proposed sports arena site in Independence. The venue is comprised of the 79,451-seat Arrowhead Stadium, home to the Kansas City Chiefs (NFL) and Kansas City Wizards (MLS) and the 40,625-seat Kauffman Stadium, home to the Kansas City Royals (MLB). Arrowhead Stadium was built in 1972 at a cost of $43 million and includes 80 suites and 10,199 club seats. Since 2000, the Kansas City Chiefs have drawn 8-game season attendance of 617,488 to 627,840. Kauffman stadium opened in 1973 at a cost of $70 million. The Kansas City Wizards are seeking a new home for the 2007 season. In April 2006, taxpayers of Jackson County approved a 3/8-cent sales tax to fund $450 million in renovations to both Arrowhead and Kauffman Stadiums. The Chiefs and Royals are working with HOK on renovation designs for both stadiums. In addition to proceeds of the sales tax the Royals will contribute $25 million, the Chiefs $75 million and the state of Missouri $50 million in tax credits.


Neither of the single-purpose, open-air stadiums are considered directly competitive to the sports arena planned for Independence, Missouri. Community America Ballpark The 5,768-seat Community America Ballpark is located within the Village West Tourism District in Kansas City, Kansas which is being developed using STAR Bond financing. Community America Ballpark opened in 2003 as home to the Kansas City T-Bones of the Northern League (minor league baseball). Stadium facilities include free parking, picnic seating, concessions, private suites, team shop, and restrooms. The 51-game inaugural 2003 season drew a reported 208,782 fans. Attendance for the 2004 season improved to 238,745, averaging 5,080 per game. For the 2004 season the Northern League once again was the highest attended of all Independent Leagues. The ten Northern League teams combined to draw just over 2.0 million fans for an average of 4,269 per game. That average ranked as the fifth highest among the 19 overall professional minor leagues and was tops among the five Independent pro leagues which operated in 2004. The Northern League had five of Independent Baseball’s top eight clubs in average attendance. The St. Paul Saints ranked third at 6,095 per game, followed by the Kansas City T-Bones which ranked fifth with 5,080; the Schaumburg Flyers that ranked seventh at 4,446; and the Lincoln Saltdogs that ranked eighth at 4,348. During the 2006 season attendance for the 8-team Northern League totaled over 1.4 million. The Kansas City T-Bones drew 269,205 spectators in 46 home games, second highest within the Northern League. The average attendance of 5,852 per game exceeded the league average of 3,850 spectators per game. Barney Allis Plaza Tennis Center For the 2006 season the Kansas City Explorers relocated from a seasonal 2,500-seat facility at the Country Club Plaza to a new 2,600-seat tennis center at Barney Allis Plaza in downtown Kansas City. The multi-purpose facility consists of 1,832 bleacher seats and 768 VIP Box seats. Other Regional Facilities While not a sports facility, the Verizon Wireless Amphitheater in Wyandotte County, Kansas is viewed as an alternative venue for touring concerts during the warm summer months. The amphitheater features approximately 7,000 reserved seats and 11,000 lawn seats. The Verizon Wireless Amphitheater attracts an annual attendance of more than 400,000 during its limited season.


Active Sports Facility Development The Sprint Center is now under construction in downtown Kansas City, Missouri. In addition, over the past two years two mid-size arenas were proposed for development in the Kansas suburbs of Olathe and Overland Park. Development plans for both suburban arenas have been dropped. The designs for all three arenas incorporate an adjacent entertainment district. Sprint Center The city of Kansas City, Missouri is now under construction on the Sprint Center and on an 8.5-acre downtown site between 13th, 15th, Grand, and Oak Streets. The 18,500-seat arena broke ground on March 28, 2005 and is scheduled to open by October 2007. The $276 million public/private arena project is being funded in part by the city of Kansas City, which will contribute $184 million initially and up to $16 million more if needed. The revenues for the city’s share will be generated from a $1.50 per day business fee on hotels and a $4.50 increase in the daily car rental tax approved by voters. A 2.275 percent user fee on all ticket sales will also be imposed. The Sprint Center will house the offices of the National Association of Basketball Coaches (NABC) and the National Collegiate Basketball Hall of Fame. The Hall of Fame is expected to draw an estimated 150,000 visitors in its first year. The NABC has committed to provide $10 million in financing for the arena. In addition, Los Angeles-based Anschutz Entertainment Group (AEG) will serve as a partner with the City of Kansas City in the development, operation, and management of the Sprint Center. AEG will contribute $50 million for the arena and will also cover any construction overruns. Sprint Corporation has agreed to pay up to $2.5 million annually for 25 years for the naming rights. A collaboration of architectural firms referred to as the Downtown Arena Design Team (DADT) designed Sprint Arena. The DADT consists of Ellerbe Becket, HOK Sport + Venue + Event, 360 Architecture and Rafael Architects. The Hall of Fame portion of the complex was designed by New York-based Edwin Schlossberg Inc. and will include memorabilia, exhibits and induction ceremonies of legendary college basketball players and coaches. Though no anchor tenants were secured prior to construction, the state-of-the-art 18,500-seat arena is designed to accommodate professional hockey and basketball, amateur sporting events, concerts, family shows and special events. The Sprint Center will allow Kansas City to be competitive in acquiring a professional basketball or a professional hockey franchise, Big 12 postseason basketball tournament play, NCAA Championship and Final Four events. The Big 12 basketball tournament will be held at Sprint Arena in March 2008. Sprint Center is expected to host over 100 events per year. The Sprint Center will be the cornerstone in the revitalization of downtown Kansas City that, in addition to the arena, will feature condominiums, restaurants, theme bars, movie and live entertainment theatres and retail. Projects totaling $3.0 billion in investment are currently under construction in downtown Kansas City. The Kansas City Power & Light District featuring entertainment, retail and restaurants is now under construction immediately west of the Sprint Center by the Baltimore-based Cordish Company.


Located between the Bartle Hall Convention Center expansion and the Sprint Arena, the Kansas City Power & Light District will cover nine city blocks. The $850 million mixed-use development is planned for over 3.0 million square feet of destination entertainment and shopping, office, and residential space. The Kansas City Power & Light District will boast a mix of unique restaurants, clubs, lounges, live music venues, comedy clubs, cafes and one-of-a-kind entertainment attractions. The heart of the district will be Power and Light Live, a collection of nighttime venues focused around a covered outdoor plaza designed for major concerts. As part of the Kansas City Power & Light District, AMC Entertainment, Inc. has agreed to revitalize the historic Midland and Empire Theaters. The Midland Theater will be revitalized into a live performance theater, restaurant and bar, and will anchor the northwest corner of the Kansas City Power & Light District. The Empire Theater will serve as the District’s southwest corner anchor and will be restored to operate as a unique AMC movie theater complex. The first phase of the Kansas City Power & Light District is scheduled to open by fall 2007 consisting of approximately 450,000 square feet of retail and entertainment space. Phase 2 is planned for 1,500 residential units and approximately 1.0 million square feet of office space. A major component of the Power & Light District will be the world headquarters for H&R Block now under construction. The 19-story, 700,000 square foot office tower is designed with a 2-story glass lobby featuring a 20-foot tall natural stone “water wall” and a European-inspired piazza. The Kansas City Power & Light District’s destination entertainment and shopping component is designed to compliment the Sprint Center by providing spectators a place to eat, drink, shop and be entertained on event nights. High Pointe Arena In late 2004, Walton Construction and RED Development announced plans to develop a sports arena and entertainment district located immediately west of the Sprint World Headquarters at 115th Street and Metcalf Avenue in Overland Park, Kansas. Referred to as High Pointe Arena, the project design called for a 333,941 square foot Entertainment District and a 7,500- to 8,000-seat enclosed arena. The master plan incorporated an entertainment district supporting 274,941 square feet of destination entertainment and retail space; 19,000 square feet of freestanding restaurant space; and a 40,000 square foot interactive entertainment attraction. The entertainment district was designed to support a vibrant day and nightlife through the tenancy of theme restaurants and “one-of-a-kind” nightclubs and entertainment venues. A 40,000 square foot interactive entertainment attraction would serve as one of the project’s main anchor tenants. This destination attraction would serve as the only U.S. location of its kind and will draw visitors from a regional and national trade area. Other potential destination tenants for the entertainment district included interactive entertainment venues; theme restaurants similar to the Rainforest Cafe; national and international nightclubs with dance, music, tropical, western, sports, and theatrical themes; and specialty retailers complementing the arena operations and entertainment retailers. The entertainment district would serve as the only location in the Kansas City metro area of the five-state Midwest region for most of the prospective tenants. This tenant mix, together with the arena, would create a regional entertainment destination.


The High Pointe Arena was designed as a mid-size facility capable of accommodating entertainment and sporting events now bypassing the Kansas City area. Given the arena’s design, centralized location within the country, and anticipated event programming, it would serve as a regional venue for sports and entertainment. The intent is for the arena to operate as a regional sports and entertainment attraction. The High Pointe Arena was designed to serve as the home for a variety of sports teams, with prospective franchises including the American Basketball Association (“ABA”), Arena Football2 (“af2”), Major Indoor League Soccer (“MILS”) and World Team Tennis. In addition to the home game schedule, the ABA would consider hosting 18 summer and 18 winter events, sponsoring year round tournaments, and holding a training academy for NBA players. The ABA was also considering relocating its world headquarters into the High Pointe Arena. Negotiations broke down with the City of Overland Park and RED Development backed out as consultant/developer of the entertainment district. Plans for constructing High Pointe Arena have been withdrawn. Olathe, Kansas Arena RTR LLC had plans to construct a sports arena located on a 105-acre site at the southwest corner of 119th Street and Interstate 35 in Olathe, Kansas. Preliminary plans called for a $70 million; 9,000-seat arena is designed to host minor league sports, concerts, and community and family events. The arena was designed to incorporate 572,500 square feet of retail space, including unique destination venues. The developers reported a 125,000 square foot Bass Pro Shops would anchor the retail component. In September 2004, the City of Olathe received approval to use $50 million in STAR bonds for phase one of the project, subject to satisfying eight specific conditions. The feasibility of the arena hinged on securing the tenancy of one or more minor league sports teams as well as securing a sufficient number of destination entertainment and retail tenants. The developers abandoned the arena project and have instead built Olathe Gateway, a retail center anchored by a Bass Pro Shops. Project components currently under construction include a 132,201 square foot Bass Pro Shops, 5,700 square foot freestanding Longhorn Steakhouse, and 5,190 square foot Jason’s Deli. The Bass Pro Shops store is scheduled to open by February 2007 and will include a 7,412 square foot Islamorada Fish Company restaurant. An additional 121,500 square feet of retail space is planned. Both tax increment financing and a transportation development district are being used to fund development of Olathe Gateway.


Arena Demand Evaluation The metropolitan Kansas City area supports a population of nearly 1.9 million and one major sports arena, that being Kemper Arena. The 18,500-seat Sprint Center is currently under construction in downtown Kansas City, Missouri. Several comparable markets with populations of 1.5 to 5.0 million support multiple arenas, including an approximately 18,000-seat venue and another smaller 10,000-seat facility. Kansas City lacks a facility able to host mid-sized sports franchises and other events. Kemper Arena and the Sprint Center are too large and the local theatres are too small. For a mid-sized arena to be successful it is critical to attract at least one, and preferably two, primary sports tenants. Otherwise, it is difficult to book the number of annual event dates that are necessary to generate revenues sufficient to facilitate financially feasible development. Feasible development of the planned multi-use arena in Independence, Missouri will stem from a sufficient spectator population and the ability to attract an anchor tenant. Given Kansas City’s existing sports franchises, the sports arena planned in Independence is a potential home for minor league hockey, ABA basketball and indoor soccer. The Kansas City Comets of the MILS, Kansas City Knights of the American Basketball Association and Kansas City Outlaws of the United Hockey League recently suspended operations. New franchises would be required to anchor the proposed sports arena. The potential for the Kansas City area and the proposed suburban arena to support minor league hockey, Arena Football, World Team Tennis, indoor soccer, and professional basket is discussed in the text below. Minor League Hockey

Several minor league hockey teams have operated in Kansas City over the years. The Kansas City Blades of the International Hockey League’s (IHL) ceased operating in 2001. The Kansas City Outlaws of the United Hockey League played at Kemper Arena and folded in 2005. With teams concentrated primarily in the Midwest, a Central Hockey League (CHL) franchise appears to be best suited minor hockey league to anchor the proposed sports arena in Independence, Missouri. The CHL is based in Phoenix, Arizona, and is operated by Global Entertainment Corporation through its WPHL, Inc. subsidiary. The Global Entertainment Corporation is a diversified sports management, arena development and licensing company. Global Entertainment Corporation subsidiary companies include: • International Coliseums Company, a project manager for arena development and responsible

for management agreements associated with arena facility operations; • Global Entertainment Marketing Systems that pursues licensing and marketing opportunities

related to the Company’s sports management and arena developments and operations; and • Global Entertainment Ticketing (GetTix.net), an in-house ticketing company for sports and

entertainment venues. The CHL began play in 1992 with six teams. During the 1996-97 season the Western Professional Hockey League (WPHL) began play in six cities. In 2001 the two leagues merged to form the new 16-team CHL. Since the merger teams in Fort Worth, Topeka, San Angelo and Indianapolis have


suspended play with new expansion teams opening in Laredo, Colorado (Loveland), Albuquerque, Arizona (Prescott Valley) and Broomfield, Colorado. The merger has proven highly successful with league attendance topping 2.1 million in each of the past four seasons, including nearly 2.5 million spectators during the 2003-04 season. The CHL has led all minor hockey leagues in average attendance for four consecutive seasons. The closest franchises to Kansas City include Wichita, Tulsa and Oklahoma City, all of which are smaller markets than Kansas City. CHL franchises operate in arenas ranging in size from the 4,986-seat Amarillo Civic Center to the 10,400-seat Ford Center in Oklahoma City. The average arena size seats 6,793 spectators. The two newest franchises opened the 2006-07 season in new arenas with the Arizona Sundogs playing in the 5,100-seat Prescott Valley Convention and Events Center and the Rocky Mountain Rage playing in the 6,000-seat Broomfield Event Center. Since the 1992-93 season the CHL reported an average attendance of 4,300 per game. For the 2005-06 the average attendance for the 15-team CHL was 4,663 per game, ranging from 2,997 in Memphis to 8,609 in Oklahoma City. Arena seat capacities and 2005-06 season attendance for each Central Hockey League team is depicted in the table on page 12. The CHL remains focused on continued expansion in conjunction with new facility construction, building on the success experienced by the four most recent expansion teams. The Laredo Bucks (2002), Colorado Eagles (2003) and Rio Grande Valley Killer Bees (2003) have all enjoyed outstanding fan, corporate and media support while playing in new venues. The Youngstown SteelHounds began play during the 2005-06 season playing in the 5,717-seat Chevrolet Centre and reporting average attendance of 4,068 spectators per game. For the current 2006-07 season the CHL added two additional expansion teams, with both the Rocky Mountain Rage and Arizona Sundogs playing in new arenas. The CHL’s long time New Mexico franchise also returned in 2006-07, with the Scorpions moving into the new 6,200-seat Santa Ana Star Center. Potential CHL franchises require a minimum population of 300,000 within a 50-mile radius and a minimum 5,000-seat arena. Kansas City’s Midwest location and population of 1.9 million suggest the metropolitan area is a desirable location for a CHL franchise. Three new arenas opened for the 2006-07 season including the Broomfield Event Center home to the Rocky Mountain Rage, Prescott Valley Convention and Events Center home to the Arizona Sundogs, and the Santa Ana Star Center home to the New Mexico Scorpions. Broomfield Event Center The 6,000-seat Broomfield Event Center opened in November 9, 2006 in the suburban Denver community of Broomfield. The Broomfield Event Center is home for two professional sports teams, the Rocky Mountain Rage of the Central Hockey League and Colorado 14ers of the National Basketball Association Development League. The arena is owned by the City and County of Broomfield, Colorado and serves as a major anchor for Arista, a 215-acre multi-use commercial, residential and entertainment development. The $45 million facility features 6,000 permanent seats (including 26 suites and 923 club seats) for hockey and basketball and is expandable to 7,500 seats for concerts and special events. Additional facility amenities include a private fitness center, restaurant and pub, club lounges, 400 parking spaces immediately adjacent to the arena, a planned 1,500-space parking structure and a RTD bus and light-rail stop. The Broomfield Event Center is anticipated to host 130 events per year, including 32 hockey games, 23 basketball games, 12 to 15 concerts and 20 to 25 special events.


Central Hockey League Team Attendance; 2005-06

# of Total # of Average Division/Team Arena Seats Attendance Games Attendance Northeast Division Bossier-Shreveport Mudbugs CenturyTel Center 7,353 180,496 32 5,641Memphis RiverKings DeSoto Civic Center 8,400 95,912 32 2,997Tulsa Oilers Maxwell Convention Center 7,111 161,013 32 5,032Youngstown SteelHounds Chevrolet Centre 5,717 130,171 32 4,068

Northwest Division Colorado Eagles Budweiser Events Center 5,289 169,248 32 5,289Oklahoma City Blazers Ford Center 10,400 275,493 32 8,609Rocky Mountain Rage* Broomfield Event Center 6,000 Wichita Thunder Kansas Coliseum 9,560 183,010 32 5,719

Southeast Division Austin Ice Bats Chaparral Ice Arena 108,785 32 3,400Corpus Christi Rayz American Bank Center 7,495 132,183 32 4,131Laredo Bucks Laredo Entertainment Center 8,002 180,376 32 5,637Rio Grande Valley Killer Bees Dodge Center 5,500 158,930 32 4,967

Southwest Division Amarillo Gorillas Amarillo Civic Center 4,986 101,186 32 3,162Arizona Sundogs* Prescott Valley Convention 5,100 Lubbock Cotton Kings Lubbock Municipal Coliseum 6,440 142,450 32 4,452New Mexico Scorpions* Santa Ana Star Center 6,200 Odessa Jackalopes Ector County Coliseum 5,131 97,523 32 3,048

Totals** 6,793 2,238,408 4,663Notes: * Denotes expansion or new team for 2006-07 season. ** Total league attendance includes Fort Worth which suspended operations. Source: Central Hockey League.


Prescott Valley Convention and Events Center Phoenix-based Global Entertainment Group partnered with the Fain Signature Group to development the $31 million, 5,100-seat Prescott Valley Convention and Events Center in Prescott Valley, Arizona. The Prescott Valley Convention and Events Center opened in November 2006 and anchors the northern end of the city’s Town Center and Entertainment District that includes retail, restaurants, offices and a Harkins Theatre complex. The facility is managed by Global Entertainment Group and marketed by Global Entertainment Marketing Systems. Gettix.Net is responsible for ticketing operations. The Arizona Sundogs of the Central Hockey League serves as the anchor tenant of the Prescott Valley Convention and Events Center playing 32 regulation season home games. The table on page 14 displays the 2006-07 season pricing for season tickets, club seats, loge seats and luxury suites The multi-purpose facility is designed to host a wide range of sporting, family and special events, including:

• Concerts • Trade, consumer and agricultural shows • Community events • Boxing and wrestling • Rodeos • Arena Football • Figure skating and ice shows • High school sports • Festivals • Basketball • Motorcross • Tractor pulls • Circus

Santa Ana Star Center Opened on October 27, 2006, the 6,200-seat Santa Ana Star Center is located in the Albuquerque, New Mexico suburb of Rio Rancho. The state-of-the-art facility features 26 luxury suites, 500 club seats, VIP lounge, club lounge and four club suites. Naming rights to the facility were sold to the Santa Ana Star Casino. The New Mexico Scorpions of the Central Hockey League serves as the anchor tenant of the Santa Ana Star Center playing 32 regulation season home games. The Santa Ana Star Center is designed to host a variety of events ranging from trade shows, conventions, graduations, performing arts, concerts, sporting events, youth sports, thrill shows and family events. The multi-purpose facility is a major component of the City of Rio Rancho’s new 160-acre master planned downtown, located adjacent to the new City Hall. International Coliseums Company has plans to develop 25 acres located adjacent to the Santa Ana Star Center with retail and entertainment uses.


Arizona Sundogs 2006-07 Season & Luxury Seat Prices

Seat Type 1-Year 2-Year 3-Year 5-Year 7-Year

Season Tickets Glass $800 $760 $720 Rinkside $736 $699 $662 Prime $640 $608 $576 Corners $480 $456 $432 Ends $352 $334 $317

Club Seats PSL $350 $300 $250 Season Ticket $750 $750 $750 Per Season Cost $1,100 $1,050 $1,000

Loge Seats PSL $450 $400 $350 Season Ticket $750 $750 $750 Per Season Cost $1,200 $1,150 $1,100

Luxury Suites 8-Seat Suite $18,113 $16,302 $14,672 10-Seat Suite $24,150 $22,500 $21,000 12-Seat Suite $32,200 $29,700 $27,450 16-Seat Suite $40,250 $36,225 $32,603 Founder's Suite $45,282 $40,754

The Central Hockey League stresses that its new franchises play in new state-of-the-art facilities. The three franchises opening play during the 2006-07 season all serve as the anchor tenant of a new 5,100- to 6,200-seat multi-use facility designed with club seats, luxury suites, excellent spectator sight lines, ample concessions and flexibility to host a wide range of events. Each multi-use facility also features a suburban location and is integrated into a large-scale, mixed-use urban center. The arena proposed for Independence, Missouri is located within the City’s largest mixed-use urban center and preliminary plans call for incorporating on-site retail and entertainment uses designed to compliment arena operations. Arena Football League Prior to inception in the Arena Football League 2006 season of the Kansas City Brigade, an Arena Football2 franchise would have been a potential anchor tenant for the proposed arena in Independence, Missouri. On August 24, 1999, the AFL Board of Directors approved the final four applications for Arena Football2 – the AFL’s minor league, to begin play in March 2000. The original 15 teams consisted mostly of mid-size cities in the Southeast and Midwest, operating in arenas with capacities of 6,000 to 12,000 seats. Building on the AFL’s popularity, the Arena Football2 (af2) sister league has experienced solid performance and growth and now has 31 franchises. Many Arena Football2 franchises share arenas with minor league hockey teams, and the 18-week af2 season runs from April through August, which is largely during hockey’s off-season.


This helps to maintain a consistent base of event demand at an arena throughout the year and avoids scheduling competition between the hockey and football teams. World Team Tennis For the 2006 season the Kansas City Explorers relocated from a seasonal 2,500-seat facility at the Country Club Plaza to a new 2,600-seat tennis center at Barney Allis Plaza in downtown Kansas City. Therefore, relocation into the proposed sports arena in Independence, Missouri appears unlikely. Indoor Soccer From 1992 to 2001 Kemper Arena was home to the Kansas City Attack of the National Professional Soccer League (NPSL). In 2001, the league disbanded and reorganized as the Major Indoor Soccer League (MISL) and the team was renamed the Kansas City Comets. In 2006, the Kansas City Comets suspended play. The Kansas City Comets had played at Kemper Arena that was much too large for the team’s needs. The construction of a mid-size arena in Independence, Missouri may improve the likelihood of resurrecting the Comets franchise. Professional Basketball Prior to the start of the 2005-06 season Jim Clark, owner of the Kansas City Nights of the ABA announced the team would suspend play. Clark stated that having played at Kemper Arena, Municipal Auditorium and Johnson County Community College, it was clear the team needs a venue that provides fans with the amenities of a new suburban arena. The construction of a mid-size arena in Independence, Missouri may improve the likelihood of resurrecting the Knights franchise. Concerts As a concert venue, only Verizon Wireless Amphitheater poses as direct competition to a mid-size arena, however, it operates only as a partial year facility. Other entertainment such as family shows would be attracted to a mid-size suburban arena. The construction of a mid-size arena in Independence, Missouri would provide an alternative venue for musical acts now bypassing Kansas City. Based on a new mid-size arena and the size of the Kansas City metropolitan area, the opportunity exists to attract a minor league hockey team. The potential also may exist to resurrect defunct Major Indoor Soccer League and American Basketball Association teams with the construction of a mid-size arena. Kemper Arena and the future Sprint Center are too large to house such minor league franchises. MILS, CHL, and af2 leagues prefer operating in new mid-size arenas ranging in size from 6,000 to 12,000 seats. Strong urban growth has been an integral component in the feasibility of new arenas. A growing number of expanding Sunbelt cities have attracted new sports franchises and supported the construction of new arenas. Strong suburban growth has also prompted accelerated new arena construction outside of the urban core. The greater Kansas City area has experienced steady population growth over the past two decades. By 2000, the metropolitan population reached 1.78 million, increasing to nearly 1.9 million by 2005. According to Claritas, Inc. the Kansas City area


population is forecast to reach 2.0 million by 2010. The proposed arena is located in eastern Jackson County, Missouri which is one of the Kansas City area’s premier suburban growth areas. According to Claritas, Inc. the primary trade area population within a 15-mile radius of the proposed Independence arena site in Independence, Missouri totaled 706,148 in 2000, increasing to 715,202 by 2006. The secondary trade area population within a 30-mile radius now totals nearly 1.7 million. This trade area population base is sufficient to support a minor league hockey, soccer and basketball team franchises. By the year 2011, the 15-mile radius population is forecast to reach 723,600, or approximately 36 percent of the metropolitan total. Households with an annual income of $150,000 or more generally spend an above average amount on entertainment. These households also have a greater ability to afford season tickets and premium seats. Markets with large numbers of high-income households have a greater ability to support sports franchises. According to Claritas, Inc. the primary trade area currently has 43,915 households with an annual income of $150,000 or more, translating into 5.99 percent of all households. Meanwhile, 43,712 households within a 30-mile radius of the proposed Independence arena site possess an annual income of $150,000 or more, translating into 14.9 percent of all households. Important to the feasibility of supporting a mid-size arena, the 15-mile primary trade area includes 28.5 percent of all Kansas City area households with an annual income of $150,000 or more. Furthermore, the 15-mile primary trade area supports a large population of young families with children, which bodes well for the demand for sporting events, family events and concerts. The proposed Independence arena is anticipated to serve as the home for one or more minor league sports teams with a CHL team the most likely anchor tenant. The proposed 6,000-seat arena is conservatively forecast to host 100 events per year and a total attendance of 387,500 spectators. These demand forecasts assume that the arena houses at least one anchor tenant, is managed by a national sports facility management company, and hosts such special events as concerts, family shows, amateur sporting events and conventions/trade shows. These event and attendance forecasts do not include such community activities as high school graduations; municipal and public meetings; and state basketball tournaments.



Totals 100 3,826 387,500


15-Mile Radius Demographic Trends

2000 2006 2011 Demographic Characteristic Census Estimate Forecast

Population 706,148 715,202 723,600 Households 286,761 292,776 297,475

Income Per Capita $21,018 $24,529 $27,313 Average Household $51,156 $59,412 $65,936 Median Household $40,045 $45,892 $49,886

Household Income Distribution Less than $15,000 16.05% 13.65% 12.34% $15,000 - $24,999 13.55% 11.31% 10.10% $25,000 - $34,999 14.44% 12.57% 11.29% $35,000 - $49,999 17.72% 17.18% 16.40% $50,000 - $74,999 19.79% 20.04% 19.89% $75,000 - $99,999 9.52% 11.30% 12.11% $100,000 - $149,999 6.02% 9.68% 11.92% $150,000 - $249,999 2.12% 3.00% 4.26% $250,000 - $499,999 0.57% 0.91% 1.18% $500,000+ 0.22% 0.36% 0.52%

Population Age Distribution 0-4 Years 49,683 52,791 51,221 5-9 Years 51,311 48,838 51,886 10-17 Years 81,671 79,192 77,864 18-24 Years 64,414 64,622 64,491 25-34 Years 106,456 97,693 90,943 35-44 Years 115,740 107,741 100,614 45-54 Years 93,089 104,880 107,575 55-64 Years 58,630 73,567 85,618 65+ Years 85,131 85,877 93,386

Median Age 34.96 36.34 37.52 Average Age 36.01 36.90 37.73

Source: Claritas, Inc.


Conclusions The Kansas City area has a number of event facilities that serve the sports and entertainment markets. A major market like Kansas City is generally able to support at least one major arena facility and one minor venue. Growing markets are developing modern mid-size facilities in addition to large, primary facilities. Kansas City’s convention and baseball markets have supported recent new development with the opening of the Overland Park Convention Center in 2002, the Community America Ballpark during 2003 in Kansas City, Kansas and the scheduled opening of the Sprint Center in November 2007. However, Kansas City’s sports market doesn’t offer a modern mid-size arena. The 30-year old Kemper Arena in downtown Kansas City, Missouri is functionally obsolete when compared to new, modern arenas. To fill this void, the 18,500-seat Sprint Arena is now under construction in downtown Kansas City, Missouri. Completion of this major arena is not expected to have a significant impact on the feasibility of a mid-size suburban arena, as they would cater to distinctly different sports and entertainment markets. The new downtown arena is too large to house such sports franchises as minor league hockey, MILS, and ABA teams. Also, smaller family events and concerts would be more prone to seek a mid-size arena. The proposed Independence multi-use arena would be designed to support these minor league sports franchises and special events. Kansas City’s existing demographics and inventory of sports venues suggests a mid-size arena is supportable. To support feasible development the proposed Independence arena must capture one or more primary sports tenants as well as a sufficient number of annual event dates. The Kansas City sports market appears to be large enough to lure a minor league hockey team franchise. The potential may also exist to attract MISL and ABA franchises. The 6,000-seat arena proposed at Interstate 70 and Little Blue Parkway in Independence, Missouri is forecast to host 100 events per year and a total attendance of 387,500 spectators. These demand forecasts assume that the arena houses at least one anchor tenant with a CHL team the most likely anchor tenant. The arena must be designed as a multi-use facility capable of hosting such special events as concerts, family shows, amateur sporting events and conventions/trade shows. A national sports management company must also manage the facility. These event and attendance forecasts do not include such community activities as high school graduations; municipal and public meetings; and state basketball tournaments. Competitive advantages for the Independence arena site include its proximity to the Independence Center retail hub, favorable primary trade area population and income levels, direct access and visibility via Interstate 70, and location within growing eastern Jackson County. Similar efforts to develop mid-size arenas in the Kansas City area communities of Overland Park and Olathe using public assistance have failed. Public assistance will likely be required to fund both capital and operating costs. Potential public financing tools include tax increment financing, transportation development district and STAR bond financing. Several recently constructed mid-sized arenas throughout the country have incorporated retail and entertainment districts. The construction of retail space adjacent to the proposed arena would enhance the potential to support feasible public assistance.


RETAIL MARKET FEASIBILITY ANALYSIS

This section of the report evaluates the market viability of developing an entertainment district in conjunction with the sports arena proposed at Interstate 70 and Little Blue Parkway in Independence, Missouri.

Entertainment District Concept The retail space to accompany the sports arena will be designed as an entertainment district. An entertainment district was defined based on information provided by the Urban Land Institute and International Council of Shopping Centers. Lifestyle centers and entertainment districts represent the latest evolution of the regional mall. During the past several years, the lifestyle center has provided a new type of business locale for fashion department stores and high-end specialty retailers who traditionally operated the majority of their stores in regional malls. Lifestyle centers generally occupy 150,000 to 1.0 million square feet of retail space in an outdoor setting. Components of a lifestyle center include at least one fashion department store, high-end specialty stores, restaurants, and entertainment venues. Lifestyle centers maintain several clusters of similar retailers such as entertainment (i.e., movie theatre and restaurants); home furnishings (i.e., furniture and linens); and fashion (i.e., apparel and cosmetics). According to the International Council of Shopping Centers (ICSC), lifestyle centers possess the following characteristics:

• Lifestyle centers have an open-air configuration and include at least 150,000 square feet of

shop space occupied by department stores and upscale national chain specialty stores. Retail categories most commonly represented are apparel, home goods, and books and music. Entertainment retailers such as a multiplex cinema and a large concentration of table-service restaurants are common; and

• Design ambience is critically important. Lifestyle centers invariably have amenities such as fountains and street furniture conducive to leisure-time visits and casual browsing. The retail layout and street pattern often reflect a “Main Street” type ambience, allowing parking directly in front of the stores.

Lifestyle centers have increasingly evolved into entertainment destinations, incorporating restaurant and nightclub clusters, cinemas, arcades, amusement centers, fun places, and entertainment spaces and streets. Irvine Spectrum Center and The Block at Orange in California and the Fashion Show Mall in Las Vegas are examples of lifestyle centers built as entertainment destinations. A key element of entertainment districts is the incorporation of “one-of-a-kind” retailers, which create a unique retail and entertainment environment. Throughout the country entertainment retail districts have developed adjacent to newly constructed sporting venues, serving as a complementary use and attracting the large volumes of spectators attending arena events. Arena-based entertainment centers themselves have developed onto major entertainment and tourist destinations by incorporating a wide range of retail and amusement facilities.


Metropolitan Kansas City Retail Market Overview

Historical Market Trends According to the Kansas City Metropolitan Shopping Center Report 2006 published by R.H. Johnson Company, by January 2006 the metropolitan Kansas City area maintained over 35.8 million square feet of shopping center space. The suburban sub-markets of Shawnee Mission, Kansas (4.7 million square feet) and Independence/Raytown (4.7 million square feet) in eastern Jackson County, Missouri possess the largest inventories of shopping center space. Given the size of the Kansas City MSA (1.93 million residents), many national big-box retailers maintain a presence. National retailers operating stores in the Kansas City area are listed in the table below.

National Retailers Operating in Kansas City

Discount Department Stores Electronics Auto Supply Kmart/Sears Grand Best Buy Auto Zone Target Circuit City O’Reilly Auto Parts Wal-Mart Ultimate Electronics Advanced Auto Parts Department Stores Office Supply Sporting Goods Dillard’s Office Depot Dick’s Sporting Goods J. C. Penney Office Max MC Sports Kohl’s Cabela’s Nordstroms Linens/Home Store Sears Bed, Bath & Beyond Hobby/Craft Macy’s Linens & Things Hobby Lobby Michaels Home Improvement Book Stores Home Depot Barnes & Noble Clothing Lowe’s Borders Old Navy Gap Warehouse Clubs Pet Supply The Limited Costco Petco TJ Maxx Sam’s Club PetsMart Stein Mart Men’s Warehouse National retailers aggressively expanding in the Kansas City area include Target, Wal-Mart, Home Depot, Lowe’s, Sam’s Club and Kohl’s. Retailers either closing operations or contracting include Montgomery Ward, Home Quarters, Payless Cashways and Kmart. During 2006 several Kmart stores were converted into the new Sears Grand format. By 2005, the Kansas City metropolitan area population reached 1.93 million with a median household income of $52,026. These favorable demographics have fueled escalating retail sales volumes and aggressive shopping center development. For 2005, retail sales within the metropolitan Kansas City area were reported at over $26 billion, led by Jackson County, Missouri and Johnson County, Kansas. Leading sectors for retail sales included automobile dealerships, food, general merchandise, food stores, and eating/drinking establishments.


From 1992 through 2005 the inventory of retail space in the Kansas City region nearly doubled. After peaking in 1995 at 4.57 million square feet of new space, retail construction gradually declined to a level of 1.92 million square feet in 1999. From 2000 to 2004 new construction rebounded with over 12.1 million square feet of space built as several national retailers both entered the market and expanded. New retail construction was particularly active within the growing suburban markets of Overland Park, Kansas; the Northland region of Kansas City, Missouri; and Independence and Lee’s Summit, Missouri. During 2005, over 1.2 million square feet of new space was completed with 2.15 million square feet under construction at the close of the year.

Much of the driving force behind recent retail construction trends in the Kansas City area stems from the aggressive expansion of such national retailers as Costco, Home Depot, Kohl’s, Lowe’s, Wal-Mart, Sam’s Club and Target. Several supermarket and drug store chains have also implemented aggressive expansion plans. These retailers and others are attempting to capitalize on the Kansas City area’s high-income levels as well as strong population growth at the urban fringe. From 2000 through 2003, the construction of 10.9 million square feet of new shopping center space within the Kansas City area yielded overall vacancies above market equilibrium ranging 8.6 to 10.2 percent. Over the past two years continued new construction has pushed vacancies higher. By January 2006, the metro-wide vacancy rate for shopping center space was reported at 10.29 percent, up from 8.04 percent from January 2004. In January 2006 big-box space of 25,000 square feet and larger accounted for 57 percent of the vacant space with 34 vacant spaces totaling 2.1 million square feet. Small shop space accounted for approximately 1.6 million square feet of unoccupied space.

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

4,500,000

5,000,000

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Kansas City Retail Construction Trends (Sq. Ft.)


Eleven regional malls operate within the metropolitan Kansas City area, totaling 10.2 million square feet of retail space. Department store chains anchoring regional malls in Kansas City include Dillard’s, J.C. Penney, The Jones Store, Nordstrom and Sears. Plans are in the works to redevelop Antioch Center and Blue Ridge Mall into power/lifestyle centers. In fact, on August 19, 2005 Blue Ridge Mall officially closed with the departure of Applebee’s. The 61-acre mall site has been razed and a 568,450 square foot power center referred to as Blue Ridge Crossing is being developed. Phase 1 is now under construction consisting of a 203,000 square foot Wal-Mart Supercenter. Tax Increment Financing (TIF) is being used to assist in redevelopment of Blue Ridge Mall. During 2005, the average shopping center lease rate for the metropolitan Kansas City area amounted to $13.81 per square foot triple-net for Class “B” space and $19.02 per square foot for Class “A” space. Rental rates for shop space within new neighborhood shopping centers generally ranged from $18.00 to $22.00 per square foot triple-net. Even older neighborhood shopping centers have reported rental rate escalations, now garnering $12.00 to $16.00 per square foot, up from $10.00 per square foot five years ago. High-end lifestyle centers rent for $25.00 to $35.00 per square foot while specialty centers garner $45+ per square foot. The Johnson County ($20.97 per square foot); Northland ($19.78 per square foot); and Independence/Raytown ($19.16 per square foot) sub-markets maintain the metropolitan area’s highest lease rates for Class “A” space.

Metro Kansas City Retail Vacancy Rate Trends

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

2000 2001 2002 2003 2004 2005 2006


Retail Sub-markets The R.H. Johnson Company Kansas City Metropolitan Shopping Center Report 2006 divides the Kansas City area into 13 sub-markets. The map on page 24 depicts the geographic boundaries for each sub-market. January 2006 retail market operating results are outlined in the table below.

Kansas City Metropolitan Area Retail Market Operating Results by Sub-market; January 2006

Map Total Space Vacant Vacancy Under Ref. # Sub-market Sq. Ft. Space Rate Construction

1 Blue Valley/South Leawood 4,348,540 120,729 2.78% 120,0002 Olathe 2,865,640 167,825 5.86% 390,0003 Lenexa/Shawnee 2,596,270 292,250 11.26% 04 Shawnee Mission 4,652,202 472,048 10.15% 135,0005 Wyandotte County 2,248,835 78,586 3.49% 756,0006 Platte County 2,019,584 179,434 8.88% 07 Northland 2,303,554 300,654 13.05% 08 Liberty 1,109,746 0 0.00% 20,0009 City/Midtown/Brookside 1,986,286 228,100 11.48% 0

10 Independence/Raytown 4,694,377 620,931 13.23% 705,00011 Lee’s Summit 1,739,298 56,891 3.27% 25,00012 Blue Springs 639,940 265,400 41.47% 013 Southland, MO 4,623,003 903,095 19.53% 0

TOTALS 35,827,275 3,685,943 10.29% 2,151,000Source: R.H. Johnson Company. Much of the recent new retail construction in Kansas City has concentrated within the outlying suburbs to capitalize on steady population and income growth. Emerging retail destinations include 135th Street in Overland Park, Kansas; State Route 58 in Belton, Missouri; Highway 152 in north Kansas City, Missouri; the and Interstate 470 and Highway 50 in Lee’s Summit, Missouri. A growing number of national big-box retailers have been attracted to these retail hubs. Together, the Platte County and Northland sub-markets that occupy the northern portion of the Kansas City area support a total inventory of 4.32 million square feet of shopping center space. The January 2006 vacancy rate of 11.1 percent increased considerably from the 6.63 percent reported two years earlier as over 500,000 square feet of new space was completed. Highway 152 serves as the primary growth corridor with retail hubs at Interstate 29, Interstate 35 and Highway 169. During 2004, Steiner + Associates opened Zona Rosa at Interstate 29 and Highway 152, a 486,066 square foot lifestyle and destination entertainment center. The intersection of Interstate 35 and Missouri 152 represents the Northland’s newest retail destination with the recent completion of the 424,292 square foot Liberty Town Center anchored by Super Target, Kohl’s, The Home Depot, Michaels, Office Depot, Petsmart, TJ Maxx, and Bed Bath & Beyond.


The southern Johnson County, Kansas sub-market of Blue Valley/South Leawood represents the Kansas City area’s hottest retail location supporting the highest land values, lease rates and levels of new construction. The 119th Street corridor now serves as the primary retail destination with new retail construction now focusing on the 135th Street corridor. By January 2006, the Blue Valley/South Leawood sub-market maintained 4.35 million square feet of shopping center space operating at a healthy 2.78 percent vacancy rate. Shawnee Mission Parkway serves as an emerging retail location within western Johnson County, Kansas. The primary concentration of new development has occurred just east of the Interstate 435 interchange. Major retailers at this location include Lowe’s, Home Depot, Kohl’s, Target, Wal-Mart, Petsmart, and Michael’s. By January 2006, the Lenexa/Shawnee sub-market maintained 2.6 million square feet of shopping center space operating at an 11.26 percent vacancy rate. The eastern Jackson County, Missouri communities of Independence, Lee’s Summit and Blue Springs now account for 20 percent of the Kansas City area’s total inventory of shopping center space, or 7.1 million square feet. The Independence Center hub at Interstates 70 and 470 represents eastern Jackson County’s primary retail destination, supporting 2.7 million square feet of retail space. Construction of the 735,000 square foot SummitWoods Crossings has provided Lee’s Summit with a major cluster of big-box retailers. By January 2006, the Independence/Raytown sub-market maintained 4.7 million square feet of retail space operating at a vacancy rate of 13.23 percent. The inventory of shopping center space in Lee’s Summit totals 1.74 million square feet, operating at a healthy vacancy rate of 3.27 percent. Blue Springs maintains an inventory of 639,940 square feet of retail space operating at a 41.47 percent vacancy rate. The Southland (Grandview, Belton and Raymore) retail sub-market is located at the southern edge of the metropolitan Kansas City area. By January 2006, this sub-market maintained 4.6 million square feet of shopping center space. The bulk of existing space is located within the Highway 71 corridor. Belton Town Center anchored by Home Depot, Target, and Kohl’s represents the latest new construction. The sub-market’s vacancy rate rose from 15.87 percent in January 2004 to 21.42 percent by January 2005 due primarily to several big-box vacancies. Market conditions improved slightly in 2005 marked by a reduction in the overall vacancy rate to 19.53 percent by January 2006. The Wyandotte County, Kansas retail sub-market occupies the western portion of the metropolitan Kansas City area. The completion of over 400,000 square feet of new space in 2005 increased the total inventory of shopping center space in Wyandotte County to 2.25 million square feet by January 2005. The vacancy rate has improved from 17.13 percent in January 2003 to 3.49 percent by January 2006. The 400-acre Village West Tourism District at the intersection of Interstates 70 and 435 now houses an 186,000 square foot Cabela’s and a 712,000 square foot Nebraska Furniture Mart. In October 2005, RED Development opened the initial phase of The Legends at Village West, a 949,524 square foot lifestyle and entertainment center. The center’s grand opening was held in April 2006 with new tenants continuing to occupy space. The Village West Tourism District has changed the face of Wyandotte County’s retail market.


Conclusions During the past five years a strong local economy fueled a growing and prosperous retail market in the Kansas City area marked by accelerated new retail construction activity and the entry of new retailers to the market. The current construction boom has produced three significant retail development trends. First, growing income and tourism levels has contributed to the proliferation of new destination lifestyle and entertainment centers such as Zona Rosa, The Legends at Village West and the Kansas City Power & Electric District now under construction. Second, new shopping center construction has been led by power centers and big-box retailers concentrating within high-growth suburban locations. Third, the decline of first-ring malls has provided the opportunity for big-box retailers to penetrate mature urban markets. Malls in the process of being redeveloped include Mission Center, Blue Ridge Mall and Antioch Center. By 2010, Claritas, Inc. forecasts the Kansas City area population to increase by 5.3 percent to 2.04 million and the median household income to rise by 12.8 percent to $58,696. The net effect will be an estimated increase in annual retail sales of $4.4 billion. These new retail sales will fuel continued retail development opportunities throughout the Kansas City market. Areas expected to capture the bulk of near-term retail construction include southern Johnson County, northern Kansas City, western Wyandotte County and eastern Jackson County.


Competitive Retail Market Conditions

This section of the report evaluates competitive retail market conditions directly impacting the potential to support a retail and entertainment district adjacent to the proposed multi-use arena at Interstate 70 and Little Blue Parkway in Independence, Missouri. The competitive market analysis included a discussion of the Independence Center retail hub as well as active and proposed lifestyle centers and retail entertainment districts within the metropolitan Kansas City area.

Independence Center Retail Hub The intersection of Interstate 70 and MO 291 in Independence, Missouri serves as the primary retail destination for eastern Jackson County. The 850,000 square foot Independence Center regional mall is the focal point and has been the catalyst for considerable retail development. Since 1999, over 1.0 million square feet of shopping center space has been constructed surrounding Independence Center. The Independence Center retail hub now maintains the largest concentration of shopping center space in eastern Jackson County with the 2.7 million square feet of space accounting for approximately 38 percent of the total inventory. Over the past several years, with the opening of the Eastland Center and Hartman Heritage Center, the Independence Center retail hub has evolved into a mixed-use urban center now supporting retail, office, hotel and high-density residential uses. The pending completion of the 250-bed HCA Hospital and 160,000 square foot Bass Pro Shops Outdoor World will further diversify and strengthen Independence Center as a mixed-use urban center. Hartman Heritage Center is located at the northwest corner of Interstate 70 and Little Blue Parkway directly west of the proposed arena. Dial Realty of Overland Park, Kansas is the master developer. Existing development includes the 100,000 square foot Landmark Office Building, 20,000 square foot Realty Executives office building, 203-room Hilton Garden Inn and 15,000 square foot Hartman Heritage Center Conference Center. Five freestanding restaurants have also been constructed, including Hereford House, Macaroni Grill, On the Border, Joe’s Crab Shack and O’Charley’s. The 223,000 square foot Pavilions Shopping Center is anchored by Stein Mart, Dress Barn, Linens ‘n Things, World Market, Pier 1 Imports, Thomasville Furniture and Bassett. The 211-acre Eastland Business Park is being developed along the south side of Interstate 70 between Interstate 470 and Little Blue Parkway. Existing retail development includes a 148,000 square foot Costco, 136,000 square foot Lowe’s Home Improvement Center, 32,000 square foot Comp USA and three strip centers. Freestanding restaurants include Panera Bread Company, Red Robin, Chipotle Mexican Grill, Rib Crib Barbecue, db’s Mongolian Barbecue, Kobe Steakhouse & Sushi Bar, Hooters, Carraba’s Italian Grill, Outback Steakhouse, IHOP, and Wendy’s. An estimated 365,800 square feet of retail space has been built to date. A survey of anchored shopping centers within the Independence Center retail hub was conducted in an effort to gauge the level of direct competition to the entertainment retail proposed to accompany the arena. As the table on page 28 indicates, nine anchored shopping centers surround Independence Center, including six power centers. The total inventory of 1.8 million square feet of shop space is operating at a healthy 95.5 percent occupancy rate. No destination entertainment or lifestyle centers are present within the Independence Center retail hub. Independence Center does house several specialty retailers such as Abercrombie & Fitch, Aeropostale, Gap and Banana Republic.


Independence Center Retail Hub Shopping Centers

Center Name/ Year Building Area Location Built Sq. Ft. Anchor Tenants Eastland Center 2002 316,000 Lowe’s, Costco NEC I-470 & Hwy 40 Comp USA

Shops at Eastland 2002 19,180 Northstar Bank 18931 E. Valley View Parkway

Eastland Retail Center 2003 20,000 Subway 18921 E. Valley View Parkway The UPS Store

Pavilions Shopping Center 2003 223,000 Steinmart, World Market NWC Little Blue Pkwy & Jackson Drive Linens N Things

Independence Commons 1995 399,930 Kohl’s, AMC 20 Theatre NEC 39th Street & Arrowhead Avenue 1999 Marshalls, Office Max

Independence Plaza 29,720 Famous Footwear 18675 E. 39th Street Brook Mays Music

Bolger Square 1999 337,500 Target Greatland NEC 39th Street & Crackerneck JC Penney

Bolger Square West 2001 111,500 24 Hour Fitness Sport NWC 39th Street & Crackerneck Jo-Ann Etc.

Crossroads Center 357,853 Wal-Mart, Sam’s Club SWC 39th Street & Hwy 291 Petsmart

Totals 1,800,580Source: Canyon Research Southwest, Inc.


Big-box retailers dominate the Independence Center area’s retail base. The primary trade area for most big-box retailers encompasses a 3- to 5-mile radius. The table below provides a list of discount department store, warehouse club, home improvement and other big-box retailers operating within the Independence Center retail hub. Recent retailer closings include Brandsmart, Garden Ridge, Rhodes Furniture and Ultimate Electronics. The Independence Center retail hub houses the largest concentration of big-box retailers in eastern Jackson County. Because of the large retail trade area supported by big-box retailers the Independence Center retail hub draws shoppers from outside of the City of Independence.

Independence Center Retail Hub Big-Box Retailers

Discount Department Store Target Greatland NEC 39th Street & Crackerneck Road Wal-Mart Supercenter SWC 39th Street & MO 291 Kohl's NEC 39th Street & Arrowhead Avenue

Warehouse Club Stores Costco NEC I-470 & Hwy 40 Sam's Club SWC 39th Street & MO 291

Home Improvement Lowe's NEC I-470 & Hwy 40

Home Electronics Best Buy NEC 39th Street & Arrowhead Avenue Circuit City SEC 39th Street & MO 291 Comp USA NEC I-470 & Hwy 40

Movie Theatre AMC 20 Theatres NEC 39th Street & Arrowhead Avenue

Clothing & Accessories Dress Barn NWC Jackson Drive & Little Blue Parkway Marshalls NEC 39th Street & Arrowhead Avenue SteinMart NWC Jackson Drive & Little Blue Parkway

Housewares & Linens Bed Bath & Beyond NEC 39th Street & Arrowhead Avenue Linens 'N Things NWC Jackson Drive & Little Blue Parkway

Other Big-Box Retailers Barnes & Noble NEC 39th Street & Arrowhead Avenue Dick's Sporting Goods NWC 39th Street & Crackerneck Road Office Max NEC 39th Street & Arrowhead Avenue JC Penney NEC 39th Street & Crackerneck Road Petsmart SWC 39th Street & MO 291


A 180-acre redevelopment project is currently underway at the southwest corner of Interstates 70 and 470 in Independence, Missouri featuring a city park, a Bass Pro Shops Outdoor World store and hotel, and The Falls at Crackerneck retail development. The project is located one mile west of the proposed arena site. Tax Increment Financing (TIF) is being used to assist in the redevelopment efforts. Mass grading and infrastructure improvements are being completed to the site. A 160,000 square foot Bass Pro Shops Outdoor World store and a 200-room hotel will anchor the 180-acre Redevelopment Project planned for the southwest corner of Interstates 70 and 470. The Outdoor World store will exhibit an Adirondack lodge-style with the hotel incorporating a lodge-theme. Surrounding the Outdoor World store and hotel will be an 82.6-acre city park and open space area designed for a 18-acre lake for fishing, a 60-foot waterfall, an extensive walking trail system, wetland and prairie restoration areas, interpretive areas, and outdoor demonstration and meeting areas. Crackerneck Creek, LLC has plans to develop The Falls at Crackerneck located on 90.4 acres located east, west and south of the Bass Pro Shops Outdoor World store. Three retail “villages” are designed for 537,000 square feet of retail space. The retail “villages” are planned to support a diverse mix of businesses. The East Retail Village is designed for a lifestyle center and a large cluster of freestanding sit-down restaurants. This project component could potentially compete directly with the destination entertainment and retail space proposed adjacent to the planned arena one mile to the east. The West Retail Village is planned for a traditional power center with big-box retailers, inline shops and out parcels. The South Retail Village is designed as an upscale neighborhood center anchored by a specialty grocery store. To conclude, with 1.8 million square feet of peripheral retail space the Independence Center retail hub now serves as eastern Jackson County’s primary retail destination. Power centers and big-box retailers account for the bulk of peripheral retail space. No lifestyle centers are located within the Independence Center retail hub with upscale retailers limited to a handful of stores within the mall such as Abercrombie & Fitch, Aeropostale, Ann Taylor Loft, Buckle, Gap, Hollister & Co., The Limited and Victoria’s Secret. With the possible exceptions of several existing freestanding restaurants and the lifestyle center planned for The Falls at Crackerneck, the destination entertainment and retail space proposed to accompany the arena wouldn’t compete directly with current retailers within the Independence Center retail hub.


Kansas City Area Entertainment Retail Districts To capitalize on spectator levels and improve the capacity of public assistance the proposed arena in Independence, Missouri would be designed to incorporate the development of a destination entertainment and lifestyle center. Four comparable destination entertainment and lifestyle centers/districts currently operate within the metropolitan Kansas City area, including Country Club Plaza, Town Center Plaza, Zona Rosa and The Legends at Village West. The Kansas City Power & Light District is now under construction in downtown Kansas City, Missouri adjacent to the new Sprint Center. A description of each comparable entertainment and lifestyle center follows below. Country Club Plaza The Country Club Plaza serves as the Kansas City area’s premier specialty shopping, dining and entertainment destination. Occupying 55 acres at 47th Street west of Main Street, in Kansas City, Missouri, Country Club Plaza is designed as a pedestrian-friendly urban center featuring a mixed of retail, office, lodging, and residential uses. Retail space totals approximately 900,000 square feet. Design elements include landscaped boulevards, public art, outdoor cafes, a wide mix of building facades, and 14 parking garages occupying 7,100 spaces. Anchor tenants include Mark Shale, Halls, Restoration Hardware, and Cinemark Palace. Dining (36 restaurants), women’s and men’s apparel (37 businesses), gifts/specialty shops (14 businesses) and home/art/antiques (10 businesses) dominate the retail tenant mix. Recent store openings at Country Club Plaza include Aldo, American Eagle Outfitters, Blonde, Max Studio, Urban Outfitters, Brio Tuscan Grille, M&S Grill, Cold Stone Creamery, Lillibelle, Brookstone and Gayle’s on the Plaza. Notable upscale retailers operating within the Country Club Plaza are listed in the table below.

Country Club Plaza List of Retailers

Restaurants Women's Apparel Men's Apparel

Baja 600 Adrienne Vittadini Brooks Brothers Buca di Beppa American Eagle Outfitters Harold's California Pizza Kitchen Ann Taylor & Ann Taylor Loft Jack Henry Cheesecake Factory A/X Armani Exchange Pinstripes Houston's Banana Republic N. Valentino Kona Grill bebe McCormick & Schmick's Chico's P.F. Chang's China Bistro J. Crew Plaza III The Steakhouse J. Jill Ruth's Chris Steakhouse Talbots Tomfooleries Victoria's Secret

Home/Art/Antiques Shoes Gifts & Specialty Shops

Pottery Barn Aldo Bang & Olufsen Restoration Hardware E.G. Geller Barnes & Noble Scandia Down Enzo Angiolini Discovery Channel Williams Sonoma Johnstone & Murphy Paper Source Z Gallerie Steve's Shoes Sharper Image


Town Center Plaza Town Center Plaza is a 610,287 square foot upscale retail center located at 119th Street and Nall Avenue within southern Johnson County, Kansas. Demographics within a 10-mile radius are impressive, including a population of 646,208 people and an average household income of $77,124. Town Center Plaza houses nearly 90 national and specialty shops, 15 restaurants, and the AMC 20 Theatres. Anchor tenants include The Jones Store (121,233 square feet); Dick’s Sporting Goods (100,000 sq. ft.); Barnes & Noble (30,000 sq. ft.); Pottery Barn (12,000 sq. ft.); Gap/Gap Body (10,000 sq. ft.); Restoration Hardware; and William Sonoma. A partial tenant list is outlined in the table below.

Town Center Plaza List of Retailers

Restaurants Apparel & Accessories Miscellaneous

Baja Fresh Abercrombie & Fitch AMC 20 Theatres Bravo Cucina Italiana American Eagle Outfitters Barnes & Noble Bristol Bar & Grill Ann Taylor & Ann Taylor Loft Bath & Body Works Dean & Deluca The Buckle Bose Fenton's Cache' Dick's Sporting Goods Hereford House Chico's EB Games Houlihan's Claire's Kirkland's La Doice Vita Coldwater Creek Pottery Barn On the Border Mexican Café Gap/Gap Body Restoration Hardware Panera Bread J. Jill Sharper Image Sushi House Limited & Limited Too Things Remembered Blue Chip Cookies Victoria's Secret Thomas Kinkade Gallery Cold Stone Creamery White House Black Market Williams Sonoma

Hawthorne Plaza is located immediately south of Town Center Plaza and houses such upscale retailers as Tivol Fine Jewelers, Talbots, Jos. A. Bank Clothiers, Steve’s Shoes, Casa Bonita Home, Rumors Salon, and 40 Sardines Restaurant. Together, Town Center Plaza and Hawthorne Plaza form southern Johnson County’s premiere upscale retail destination.


Zona Rosa Steiner + Associates, Inc., is developing Zona Rosa, a 93-acre mixed-use project located at Interstate 29 and Barry Road within the Northlands region of Kansas City, Missouri. Zona Rosa is designed as an urban village with pedestrian promenades and public plazas supporting nearly 1.0 million square feet of specialty retail, restaurants, entertainment, office, and residential space and 330 hotel rooms. At build-out Zona Rosa will support 648,030 square feet of specialty retail and restaurant space. The initial phase opened in mid-2004 designed with 468,681 square feet of specialty retail space and fourteen out parcels supporting up to 129,610 square feet of restaurant and retail space. Over 95 percent of the shop space is now leased to a wide variety of national specialty retailers designed to create a unique and upscale shopping experience. Anchor tenants include Dick’s Sporting Goods, Marshalls Megastore, Barnes & Noble, DSW Shoes, and Majestic Theatre and Comedy Club. Dining (19 restaurants), apparel & accessories (22 stores), and entertainment venues highlight Zona Rosa’s tenant mix.

Zona Rosa List of Retail Tenants

Restaurants Apparel & Accessories

Abuelo's Mexican Food New York NY Fresh Deli Abercrombie & Fitch Gap Kids/baby Gap Auntie Anne's Pretzels O'Dowd's Irish Pub Aeropostale Hollister Co. Bo Lings Chinese Please Qdoba Mexican Grill American Eagle Hot Topic Bravo Cucina Italiana Quizno's Subs Ann Taylor Loft Lane Bryant Cold Stone Creamery Rib Crib The Buckle Lids The Cookie Factory Smokehouse Barbeque Cache' Limited Too Granite City Food & Brewery Swagat Fine Indian Cuisine Claire's Men's Wearhouse Hereford House Ted's Montana Grill Dress Barn New York & Company Kelso's Pizza Tomfooleries Express Pacific Sunwear The Majestic Café Forever 21 Perfume Pizazz Mimi's Café Gap Victoria's Secret

Entertainment Anchor Tenants Health & Beauty Jewelry

GameStop Marshalls MegaStore Avalon Salon & Spa Balano Jewelry The Majestic Theatres Dick's Sporting Goods Bath & Body Works Helzberg Diamonds The Improv Comedy Club Barnes & Noble Beauty Express Kay Jewelers

Nail EnVogue Zales Jewelers

Home Furnishings Shoes Optical Misc.

Ethan Allen DSW Lenscrafters Build-a-Bear Workshop Norwalk Furniture Stride Rite Sunglass Hut The Children's Place The Sharper Image Disney Store


Legends at Village West RED Development is underway on The Legends at Village West, a 949,524 square foot destination lifestyle and entertainment center located within the 400-acre Village West Tourism District. The Unified Government of Wyandotte County and Kansas City, Kansas is developing The Village West Tourism District is designed as a retail and entertainment destination supporting retail, entertainment, and hotel development. A 712,000 square foot Nebraska Furniture Mart and 186,000 square foot Cabela’s anchor the Village West Tourism District. These one-of-kind retail concepts and exceptional regional transportation access allows the Village West Tourism District to penetrate a trade area consisting of over 8.7 million people within a 4-hour drive time. Attracted by the expanded regional draw such complementary retail and entertainment venues as the Community America Ballpark, The Legends at Village West, four hotels totaling 515 rooms, and 20 restaurants and retailers have opened at the Village West Tourism District. Development at The Legends at Village West has progressed in phases. The 14-screen, 86,916 square foot Legends 14 Theatres opened in November 2005. Grand opening for the balance of the destination development occurred on April 22, 2006. Major retailers now open for business include Dave & Busters, TJ Maxx, Linens ‘N Things, T-Rex, Off Broadway Shoes, Home Decorators Collection, Books-a-Million, and Old Navy. Specialty retailers include Aeropostale, American Eagle Outfitters, Banana Republic, Brooks Bros., Hot Topic, Osh Kosh, Timberline, and Tommy Hilfiger. A 126,800 square foot Target and 97,440 square feet JC Penney are built on out lots. Completion of The Legends at Village West will further strengthen the position of the Village West Tourism District as a regional shopping and entertainment destination. Kansas City Power & Light District The Kansas City Power & Light District now under construction in downtown Kansas City, Missouri by Baltimore-based Cordish Company. Located between the Bartle Hall Convention Center expansion and the $250 million Sprint Center Arena now under construction, the Kansas City Power & Light District will cover nine city blocks. The $850 million mixed-use development is planned for over 3.0 million square feet of destination entertainment and shopping, office, and residential space. The Kansas City Power & Light District will feature 450,000 square feet of upscale shopping and entertainment, including boutiques, art galleries, bookstores, unique concept shops, a health club, a gourmet supermarket, restaurants, clubs, lounges, live music venues, comedy clubs, cafes, and one-of-kind entertainment attractions. The heart of the District will be Power & Light Live, a collection of nighttime venues focused around a covered outdoor plaza designed for major concerts. Anchored by the 700,000 square foot H&R Block Headquarters, the District will also include 1.3 million square feet of office space in three buildings. To create a 24-hour environment, the District will incorporate 1,500 residential units. As part of the Kansas City Power & Light District, AMC Entertainment, Inc. has agreed to revitalize the historic Midland and Empire Theaters. The Midland Theater will be revitalized into a live performance theater, restaurant and bar, and will anchor the northwest corner of the Kansas City Power & Light District. The Empire Theater will serve as the District’s southwest corner anchor and will be restored to operate as a unique AMC movie theater complex.


The first phase of the Kansas City Power & Light District is scheduled to open by Fall 2007 consisting of approximately 450,000 square feet of retail and entertainment space. Phase 2 is planned for 1,500 residential units and approximately 1.0 million square feet of office space. A major component of the Power & Light District will be the world headquarters for H&R Block now under construction. The 19-story, 700,000 square foot office tower is designed with a 2-story glass lobby featuring a 20-foot tall natural stone “water wall” and a European-inspired piazza. Announced tenants of the Kansas City Power & Light District include Cosentino’s Downtown Gourmet Market, AMC Theatres, Bristol Seafood Grill, ChinaBar and Vivino V. Conclusions The table on page 36 provides a matrix comparing the tenant mix of the four destination retail and entertainment centers in the metropolitan Kansas City area. The purpose of this comparative analysis is to identify a potential market niche and retail mix for the destination entertainment and retail planned to accompany the proposed arena in Independence, Missouri. Zona Rosa, Country Club Plaza, and Town Center Plaza maintain a similar tenant mix highlighted by apparel stores, dining establishments, specialty stores, and entertainment venues. In fact, these destination retail and entertainment centers share many of the same retailers (i.e., American Eagle Outfitters, Ann Taylor, Express, The Gap, Barnes & Noble, and Sharper Image) due to similar market positioning, high trade area income levels, and their distance apart which allows for the operating of “sister” stores. Both Zona Rosa and Town Center Plaza service primarily the local market, whereas Country Club Plaza maintains a much larger tourist and visitor draw. Given the presence of Nebraska Furniture Mart, Cabela’s and the Kansas Speedway, the Village West Tourism District enjoys a regional trade area draw much larger than that of the three other destination entertainment and lifestyle centers/districts operating in the Kansas City area. Theme restaurants and one-of-a-kind entertainment venues (i.e., Dave & Busters and T-Rex) account for a higher percentage of the Legends at Village West’s tenant mix. While Kansas City’s existing destination entertainment and lifestyle centers would appear to create formidable competition, given its association with a 6,000-seat multi-purpose arena the envisioned tenant mix of the destination entertainment and retail component is envisioned to emphasize restaurants, nightclubs and entertainment. The tenant mix of Zona Rosa, Country Club Plaza, and Town Center Plaza heavily favor soft goods retailers and restaurants, with nightclubs and entertainment playing much lesser of a role. The Legends at Village West is deemed the primary competitor having placed much more emphasis on creating a distinctive retail environment through the tenancy of “one-of-a-kind” retailers, restaurants, and entertainment venues not currently operating in the Kansas City market. This market positioning has attracted local residents, tourists, and area visitors as well as generated above-average retail sales volumes. The Kansas City Power & Light District currently under construction in downtown Kansas City, Missouri is being developed using the proximity and synergy of the neighboring Sprint Center. While the development concept of the Kansas City Power & Light District is similar to that of the proposed arena and associated retail in Independence, Missouri, the large scale, mixed-use design and downtown location will minimize the extent of direct competition.


Kansas City Area Entertainment & Lifestyle Centers – Tenant Mix

Country Town Zona Legends at Retailer Club Plaza Center Rosa Village West

Dining

Abuelo's Mexican Food Embassy X Applebee's X Arthur Bryants X Bo Ling's Chinese Restaurant X X Bravo Italiana X X Bristol X Buca di Beppo X California Pizza Kitchen X The Capital Grill X The Cheesecake Factory X Caliente Cuban X Cantina Corona X Johnny Carino's X Cheeseburger in Paradise X Chili's X Claddagh Irish Pub X Coyote Ugly X Bob Evans X Granite City X X Hereford House X Hooters X Houlihan's X Houston's X IHOP X Kona Grill X Margarita Mama's X McCormick & Schmick's X O'Dowd's Little Dublin X X Outback Steakhouse X P.F. Chang's China Bistro X Red Lobster X Ruth's Chris Steakhouse X Ted's Montana Grill X X Tomfooleries Restaurant & Bar X X Yardhouse X

Apparel & Accessories

Adidas X Aeropostale X X Ambercrombie & Fitch X American Eagle Outfitters X X X X Ann Taylor/Loft X X X X Banana Republic X X X bebe X Brooks Brothers X Buckle X X X


Kansas City Area Entertainment & Lifestyle Centers (Continued)

Country Town Zona Legends at Retailer Club Plaza Center Rosa Village West

Cache X X Cavender's Western Outfitter X Chico's X X Coldwater Creek X Express X X X Forever 21 X X Gap X X X X H&M X Harolds X X Hollister Co. X J. Crew X J. Jill X X Jockey X Lane Bryant X Limited X X Off Broadway Shoes X Old Navy X Orvis X Rack Room X Talbots X X Timberline X Victoria's Secret X X X White House/Black Market X X

Specialty Retailers

Books-A-Million X Barnes & Noble X X X Border's Books Cold Stone Creamery X X X X Dick's Sporting Goods X X Discovery Channel X X Godiva Chocolaties X X Home Decorators Collection X Pottery Barn X X Restoration Hardware X X Sharper Image X X X The Children's Place X X X Williams-Sonoma X X

Entertainment

Cinemark Theaters X Majestic Theatres & Comedy Club X AMC 20 Theaters X Dave & Buster's X Legends 14 Theatres X Pin-Up Bowl X T-Rex X


Two lifestyle centers are proposed for future development in Lee’s Summit, Missouri that will compete for tenants with the proposed arena’s destination entertainment and retail component. These proposed lifestyle centers include Summit Fair by RED Development and City Walk by Coventry and Developers Diversified Realty Corporation. These proposed lifestyle centers benefit from a considerable lead time in planning and marketing as well as being located within the growing affluent community of Lee’s Summit. RED Development, the developer of The Legends at Village West, has plans to construct an open-air lifestyle shopping center located at the northeast corner of Chipman Road and U.S. Highway 50. Referred to as Summit Fair, the preliminary site plan calls for a 548,186 square foot lifestyle center and five out parcels designed for 39,080 square feet of retail space. The lifestyle center possesses a “Main Street” design featuring 19 individual retail buildings. The preliminary site plan includes one anchor department store of 142,000 square feet, ten medium sized retailers ranging in size from 18,000 to 25,000 square feet, and 87,284 square feet of shop space. The shop space is being marketed to upscale specialty retailers and restaurants. The 58.74-acre parcel requires the realignment of Blue Parkway and the purchase of the western portion of the Summit Technology Center campus. A Tax Increment Financing Plan was approved to fund transportation and infrastructure improvements to the Summit Fair site. Greenpoint Development, LLC in conjunction with Coventry and Developers Diversified Realty Corporation is planning CityWalk at the intersection of U.S. Highway 50 and MO 291. The developer is seeking financial incentives in the form of a Super TIF. The preliminary site plan calls for a 639,024 square foot lifestyle center at the southwest corner of U.S. Highway 50 and MO 291, plus a 200,000 square foot “big-box” retailer and freestanding out parcel designed for a 12,000 square foot restaurant at the southeast corner.


Forecast Retail Space Demand Given its unique market positioning and prospective tenant mix, the proposed arena’s destination entertainment and retail component will attract customers from throughout the greater metropolitan Kansas City area. However, primary trade area for the arena’s destination entertainment and retail component is defined as the geographic region within a 15-mile radius (includes the adjoining communities of Kansas City, Lee’s Summit and Blue Springs) with the secondary trade area encompassing a 30-mile radius. Retail space demand for the primary trade area through 2011 has been forecast to provide insight into future competitive market conditions. Net demand for retail floor space is a direct function of consumer population and income levels. According to data published Claritas, Inc. the 2006 population for the primary area of 715,202 residents is forecast to reach 723,600 by 2011, a gain of 8,398 residents. Claritas Inc. estimates the per capita income level for the primary trade area to increase from $24,529 in 2006 to $27,313 by 2011. Based on the composition of retail sales within the metropolitan Kansas City area, expenditures on goods and services (excluding automobile sales) amount to approximately 45 percent of total personal income. Based on per capita retail sales (excludes automobile sales) of $12,396 for 2005, the primary trade area’s retail pull factor has been estimated at 1.18. The retail pull factor measures the relative strength of a city’s retail trade and is measured as a ratio of city over state per capita sales tax collections. A pull factor value exceeding 1.00 indicates that the community is attracting an above average rate of retail sales. Based on Dollars & Cents of Shopping Centers, an average retail sales rate of $250 per square foot was used to quantify future demand for retail space.

Projected Primary Trade Area Retail Space Demand: 2006 – 2011

2006 2011 Gains Population 715,202 8,398Per Capita Income $24,529 $27,313 Total Personal Income $17,543,189,858 $229,374,574 % Income Spent on Goods & Services (excluding automobiles) 45% 45% Retail Pull Factor 1.18 1.18Total Potential Non-Automotive Retail Sales $9,315,433,837 $121,797,899 Less: 2005 Non-Automotive Retail Sales $8,865,809,630 Potential Capture of Additional Non-Automotive Retail Sales $449,624,207 $121,797,899Average Retail Sales Per Square Foot $230 $250 Supportable Additional Retail Space (Sq. Ft.) 1,954,888 487,192 Source: Canyon Research Southwest, Inc.; January 2007.

The 2006 primary trade area population of 715,202 residents is estimated to generate demand for an additional 1.95 million square feet of occupied retail space. By 2011, the 8,398 new residents are forecast to generate demand for an additional 487,192 square feet of occupied retail space. In total, over the next five years the opportunity exists for the primary trade area to support an additional 2.44 million square feet of occupied retail space.


The metropolitan Kansas City area supports an estimated 3.4 million square feet of existing and under construction lifestyle and destination retail and entertainment space, accounting for 8.9 percent of the metro-wide retail inventory. The inventory of lifestyle and destination retail and entertainment space is estimated to capture approximately 5.1 percent of total retail sales in the metropolitan Kansas City area. At a capture rate of 5.1 percent of total retail sales by 2011 and average sales of $300 per square foot, the primary trade area is forecast to support approximately 1.78 million square feet of upscale retail space. Lifestyle and destination retail and entertainment districts operating within the primary trade area include Country Club Plaza and the Kansas City Power & Light District totaling 1.35 million square feet of retail space. Assuming these centers operate at an average occupancy rate of 95 percent, by the year 2011 the primary trade area is forecast to support an estimated 500,000 square feet of occupied destination retail and entertainment space. The proposed arena’s retail component will be competing against Summit Fair, CityWalk and other projects to capture this unmet demand for destination retail and entertainment space.

Entertainment District Site Evaluation

Shopping center developers and major retailers evaluate potential sites based on a series of site specific criteria. Common selection criteria when evaluating an arena-based destination entertainment and retail development site include visibility and exposure, accessibility, compatibility of adjacent land uses, trade area demographics, the level of direct competition and synergy with arena development. Using these site selection criteria the proposed arena site was evaluated as a potential destination entertainment and retail development location. Visibility Visibility has a significant influence on retail sales volumes. The proposed arena site is situated adjacent to Little Blue Parkway (a 4-lane major arterial street) and Interstate 70 (6 lanes), providing sufficient visibility and exposure to support destination entertainment and retail development. Accessibility Regional, local and on-site accessibility is critical for successful destination entertainment and retail center development. Site accessibility criteria include: 1) hierarchy of streets; 2) the vehicular speed and traffic counts past the site; 3) a traffic signal within 500 feet of the site and 4) the ability to make a left turn as ingress into the site. Using these criteria the proposed arena site was evaluated as a potential destination entertainment and retail site.

1. The term “hierarchy of streets” refers to the character of the surrounding area’s vehicular transportation network. The roadway network in and around eastern Jackson County includes major arterials following a grid pattern, highways and freeways. Interstate 70 adjacent to the site serves as Jackson County’s primary east-west transportation corridor. Interstate 470 approximately one mile west of the proposed arena site is part of a beltway system that provides direct access to the entire Kansas City metropolitan area. The proposed arena site is located at the intersection of Interstate 70 and Little Blue Parkway,


providing efficient neighborhood and regional access as well as an expanded retail trade area. Direct on-site access will be provided from Little Blue Parkway.

2. The posted speed limits past the site on Little Blue Parkway allows for

convenient on-site ingress and egress. 3. A signalized intersection at Little Blue Parkway and Jackson Street provides

the proposed arena site with convenient on-site ingress and egress.

4. The signalized intersection at Little Blue Parkway and Jackson Street provides the proposed arena site with convenient left turn site ingress.

The proposed arena site possesses adequate vehicular accessibility to support destination entertainment and retail development. Compatibility of Adjacent Land Uses The proposed arena site is located within the Independence Center urban core whose 2.7 million square feet of retail space is accompanied hotels, office buildings, restaurants and the 250-bed HCA Hospital now under construction. Hartman Heritage Center is located immediately west of the arena site. This major mixed-use development consists of 120,000 square feet of office space, 203-room Hilton Garden Inn and 15,000 square foot Hartman Heritage Center Conference Center, five freestanding restaurants (Hereford House, Macaroni Grill, On the Border, Joe’s Crab Shack and O’Charley’s) and the 223,000 square foot Pavilions Shopping Center. Location within the Independence Center urban core will generate on-site demand for dining, entertainment, and shopping. Therefore, existing area development is compatible with the proposed arena site and will assist in establishing an entertainment and retail destination. Trade Area Demographics The population within a 15-mile radius of the proposed site is young, educated, affluent, and growing. Claritas, Inc. estimated the 2006 population at 715,202, possessing a median age of 36.34 years, and an average household income of $59,412. One-quarter of households maintain an annual income of $75,000 or more. By the year 2011, the population within a 15-mile radius is forecast to increase to 723,600 residents with the average household income reaching $65,936. Nearly 29 percent of the population is aged between 25 and 44 years. This age group is a large consumer of entertainment, specialty and boutique retail, and sit-down restaurants. The demographic characteristics within a 15-mile radius of the proposed arena site bode well for the opportunity to support destination entertainment and retail development. Competition Four destination entertainment and retail centers currently operate within the metropolitan Kansas City area, including the Country Club Plaza at Main Street and Ward Parkway in central Kansas City; Zona Rosa in the Northlands; Town Center Plaza at 119th Street and Roe Avenue in Leawood and The Legends at Village West at Interstates 435 and 70 in Kansas City, Kansas.


While Kansas City’s existing destination entertainment and lifestyle centers would appear to create formidable competition, given its association with a 6,000-seat multi-purpose arena the envisioned tenant mix of the destination entertainment and retail component is envisioned to emphasize restaurants, nightclubs and entertainment. The tenant mix of Zona Rosa, Country Club Plaza, and Town Center Plaza heavily favor soft goods retailers and restaurants, with nightclubs and entertainment playing much lesser of a role. The Legends at Village West is deemed the primary competitor having placed much more emphasis on creating a distinctive retail environment through the tenancy of “one-of-a-kind” retailers, restaurants, and entertainment venues not currently operating in the Kansas City market. The Legends at Village West is located approximately 25 miles west of the proposed arena site in Independence, Missouri, greatly minimizing the extent of direct competition. The Kansas City Power & Light District currently under construction in downtown Kansas City, Missouri is being developed using the proximity and synergy of the neighboring Sprint Center. While the development concept of the Kansas City Power & Light District is similar to that of the proposed arena and associated retail in Independence, Missouri, the large scale, mixed-use design and downtown location will minimize the extent of direct competition. The proposed arena site is located within the Independence Center retail hub. No lifestyle centers are located within the Independence Center retail hub with upscale retailers limited to a handful of stores within the mall such as Abercrombie & Fitch, Aeropostale, Ann Taylor Loft, Buckle, Gap, Hollister & Co., The Limited and Victoria’s Secret. The AMC 20 Theatres is the only entertainment venue operating within the Independence Center retail hub. Future competition may result from the lifestyle center planned for The Falls at Crackerneck. The proposed arena site is envisioned to support considerable restaurant development. Major sit-down restaurant chains operating within the Independence Center retail hub are identified in the table below. A total of 25 sit-down restaurants operate within the Independence Center retail hub. Notable restaurants include Carrabba’s Italian Grill, Chili’s, Macaroni Grill and Outback Steakhouse. Restaurant chains with restaurants in the Kansas City area but not operating in the Independence Center retail hub include Bravo Italiana, California Pizza Kitchen, Cheesecake Factory, Johnny Carino’s, Granite City, Kona Grill and many more.

Independence Center Sit-down Restaurants

Restaurant Restaurant Restaurant

bd's Mongolian Barbecue Hooters Outback Steakhouse Bob Evans IHOP Panera Bread Buffalo Wild Wings Joe's Crab Shack Red Robin Carrabba's Italian Grill Kobe Steakhouse & Sushi Bar Rib Cribb Barbecue Chili's Lone Star Steakhouse Smokehouse Barbecue Chipotle Mexican Grill Longhorn Steakhouse TGI Fridays Fazoli's Macaroni Grill Zio's Italian Kitchen 54th Street Grill O'Charley's Hereford House On the Border Mexican Grill


Synergy with Arena Development The multi-use arena proposed in Independence, Missouri is forecast to host 100 events per year with a combined attendance of 387,500 spectators. Throughout the country destination entertainment and retail districts have been developed in conjunction with newly constructed multi-purpose arenas, capitalizing on the large event attendance throughout the year. Recent examples include three arenas that opened in 2006 for Central Hockey League franchises. These new arenas include the Broomfield Event Center home to the Rocky Mountain Rage, Prescott Valley Convention and Events Center home to the Arizona Sundogs, and the Santa Ana Star Center home to the New Mexico Scorpions. Each multi-use arena features a suburban location and is integrated into a large-scale, mixed-use urban center featuring restaurants, nightclubs, shopping and entertainment venues. These recent arena development trends suggest that retail space accompany the arena proposed in Independence, Missouri. This report concludes that the proposed arena site in Independence, Missouri is a feasible destination entertainment and retail site, possessing the necessary access, visibility, exposure, trade area demographics, and location within a major retail hub. A growing trade area population and business community, limited presence of upscale retailers and pent-up upscale retail space demand provides the opportunity to attract destination and specialty retailers and support feasible development. The multi-use arena provides retailers and restaurants with a large and captive customer base.

Conclusions A 6,000-seat sports arena and associated entertainment and retail district is being proposed for development at the northeast corner of Interstate 70 and Little Blue Parkway in suburban Independence, Missouri. Throughout the country destination entertainment and retail districts are being developed in conjunction with newly constructed multi-purpose arenas, capitalizing on the large event attendance throughout the year. Arena-based destination entertainment and retail districts are generally positioned to support a vibrant day and nightlife through the tenancy of theme restaurants, nightclubs, specialty retailers and entertainment venues. Three multi-use arenas anchored by new Central Hockey League franchises opened for the 2006-07 season. Each multi-use arena features a suburban location and is integrated into a large-scale, mixed-use urban center featuring restaurants, nightclubs, shopping and entertainment venues. These recent arena development trends suggest that retail space accompany the arena proposed in Independence, Missouri. The proposed arena site is located within eastern Jackson County’s primary retail destination anchored by the 850,000 square foot Independence Center regional mall. The Independence Center retail hub maintains 2.7 million square feet of space. Over the past several years, with the opening of the Eastland Center and Hartman Heritage Center, the Independence Center retail hub has evolved into a mixed-use urban center now supporting retail, office, hotel and high-density residential uses. The pending completion of the 250-bed HCA Hospital and 160,000 square foot


Bass Pro Shops Outdoor World will further diversify and strengthen Independence Center as a mixed-use urban center. No lifestyle centers are located within the Independence Center retail hub with upscale retailers limited to a handful of stores within the mall such as Abercrombie & Fitch, Aeropostale, Ann Taylor Loft, Buckle, Gap, Hollister & Co., The Limited and Victoria’s Secret. The AMC 20 Theatres is the only entertainment venue operating within the Independence Center retail hub. Future competition may result from the lifestyle center planned for The Falls at Crackerneck. Kansas City’s five existing and pending destination entertainment and lifestyle centers will have varying degrees of competition on the proposed arena’s entertainment and retail district. The tenant mix of the destination entertainment and retail district is envisioned to emphasize restaurants, nightclubs and entertainment. The tenant mix of Zona Rosa, Country Club Plaza, and Town Center Plaza heavily favor soft goods retailers and restaurants, with nightclubs and entertainment playing much lesser of a role. The Legends at Village West is deemed the primary competitor having placed much more emphasis on creating a distinctive retail environment through the tenancy of “one-of-a-kind” retailers, restaurants, and entertainment venues not currently operating in the Kansas City market. The Legends at Village West is located approximately 25 miles west of the proposed arena site in Independence, Missouri, reducing the extent of direct competition. The Kansas City Power & Light District currently under construction in downtown Kansas City, Missouri is being developed using the proximity and synergy of the neighboring Sprint Center. While the development concept of the Kansas City Power & Light District is similar to that of the proposed arena and associated retail in Independence, Missouri, the large scale, mixed-use design and downtown location will minimize the extent of direct competition. The proposed arena site in Independence, Missouri is a feasible destination entertainment and retail site, possessing the necessary access, visibility, exposure, trade area demographics, and location within a major retail hub. A growing trade area population and business community, limited presence of upscale retailers and pent-up upscale retail space demand provides the opportunity to attract destination and specialty retailers and support feasible development. The multi-use arena provides retailers and restaurants with a large and captive customer base. Creating a vibrant destination entertainment and retail district requires building a sufficient critical mass of space. Most successful projects support a minimum of 200,000 square feet of retail space. The preliminary master plan for the proposed arenas in Overland Park and Olathe included 333,941 to 572,500 square feet of shops and pad space which is sufficient to create a critical mass of entertainment venues and specialty shopping. It is recommended that 200,000 to 300,000 square feet of destination entertainment and retail space accompany the multi-use arena proposed in Independence, Missouri. This inventory of space is sufficient to generate high retail sales volumes on non-event nights.


STUDY CONCLUSIONS

The City of Independence, Missouri is evaluating the viability of constructing a 6,000-seat multi-use arena accompanied by an entertainment/retail district on a vacant site located at the northeast corner of Interstate 70 and Little Blue Parkway. Canyon Research Southwest, Inc. has prepared a Sports Arena Market Feasibility Study that evaluates the short-term development potential of both the 6,000-seat sports arena and accompanied entertainment/retail district. Based on the study findings, the Sports Arena Market Feasibility Study addressed the supportable arena size and square footage of entertainment retail space and forecast both arena event demand and retail sales generated by the accompanied entertainment/retail district.

Development Plan The multi-use arena proposed for the northeast corner of Interstate 70 and Little Blue Parkway in Independence, Missouri if tentatively designed for a seat capacity for 6,000 spectators. The mid-sized multi-use arena is designed to compliment existing sports and entertainment facilities in the Kansas City area. Kansas City’s demographics and inventory of sports venues suggests a mid-size arena is supportable. To support feasible development the proposed Independence arena must capture one or more primary sports tenants as well as a sufficient number of annual event dates. The Kansas City sports market appears to be large enough to lure a minor league hockey team franchise. The potential may also exist to attract MISL and ABA franchises. CHL franchises operate in arenas ranging in size from the 4,986 to 10,400 seats. The average arena size seats 6,793 spectators. The three CHL franchises opening play during the 2006-07 season all serve as the anchor tenant of a new 5,100- to 6,200-seat multi-use facility designed with club seats, luxury suites, excellent spectator sight lines, concessions and flexibility to host a wide range of events. Each multi-use facility also features a suburban location and is integrated into a large-scale, mixed-use urban center. Therefore, the seating capacity for the proposed arena in Independence, Missouri appears to meet the requirements of minor league hockey and other sports leagues and special events. To enhance the spectators overall experience and generate additional revenues mid-sized suburban arenas now incorporate a retail component. The tenancy of these accompanied retail districts consists predominantly of restaurants, nightclubs, entertainment venues and some specialty shops. The market positioning of the retail district is to create a vibrant entertainment and retail environment that is complimentary to the events hosted by the multi-use arena. Creating a vibrant destination entertainment and retail district requires building a sufficient critical mass of space. Most successful projects support a minimum of 200,000 square feet of retail space. The preliminary master plan for the once proposed arenas in Overland Park and Olathe included 333,941 to 572,500 square feet of shops and pad space. It is recommended that 200,000 to 300,000 square feet of destination entertainment and retail space accompany the multi-use arena proposed in Independence, Missouri. This inventory of space is sufficient to generate high retail sales volumes on non-event nights.


Forecast Arena Demand The multi-use arena proposed Independence is anticipated to serve as the home for one or more minor league sports teams with a CHL team the most likely anchor tenant. The proposed 6,000-seat multi-use arena is conservatively forecast to host 100 events per year and a total attendance of 387,500 spectators. These demand forecasts assume that the arena houses at least one anchor tenant, is managed by a national sports facility management company, and hosts such special events as concerts, family shows, amateur sporting events and conventions/trade shows. These event and attendance forecasts do not include such community activities as high school graduations; municipal and public meetings; and state basketball tournaments.



Totals 100 3,826 387,500

The proposed 6,000-seat multi-use arena will have a significant economic impact on the community. Direct impacts measure the spending and job creation that occurs as a direct result of the operations and activities that occur within the arena. Indirect impacts consist of re-spending of the initial or direct expenditures, or the supply of goods or services resulting from the initial direct spending within the arena. The proposed arena is forecast to generate 90 full-time equivalent jobs and average per spectator spending of $20 for event tickets and parking and $10 on food and beverage. Operation of the proposed multi-use arena is forecast to generate a first-year direct economic impact in the form of job creation and spending estimated at approximately $13.7 million. Using a multiplier of 1.75, the direct and indirect (total) economic impact is estimated at approximately $24.0 million.


Forecast Retail Sales Revenues The proposed multi-use arena’s entertainment and retail district will be designed to attract customers on both event and non-event nights. Its location off Interstate 70 within eastern Jackson County’s largest retail hub will assist in drawing customers on non-event nights. Retail sales for the entertainment and retail district were estimated based on several sources, including:

• Dollars & Cents of Shopping Centers 2006 published by the Urban Land Institute; • Retail sales data published by the International Council of Shopping Centers;

• Financial data published in the Annual Reports of national tenants that commonly occupy

destination entertainment and retail district; and

• Consultant’s internal database on actual retail sales of similar destination entertainment and retail developments operating in the Kansas City area.

Retail sales volumes for the proposed entertainment and retail district were forecast taking into consideration both competitive retail market forces (i.e., direct competition from similar destination retail developments operating in the Kansas City) and trade area demographics (i.e., population and income levels, age distribution and educational attainment) were considered. During the first full year of operation the entertainment and retail district accompanying the proposed multi-use arena in Independence, Missouri is forecast to generate retail sales of $310 per square foot of retail floor area, equating to total sales of approximately $62 million to $93 million.


ADDENDA


EXHIBIT A Canyon Research Southwest, Inc., Client Roster


CLIENT ROSTER During its period of operation, Canyon Research Southwest, Inc. has provided real estate consulting services for a number of leading organizations including: Abigail Properties Appraisal Technology, Inc. Arizona State Land Department Aspen Group Bain & Company, Inc. (Boston, Massachusetts) Bashas' Markets, Inc. Belz-Burrow (Jonesboro, Arkansas) Brook Group Browning-Ferris Industries Burch & Cracchiolo PA CB Commercial CEI Realty Company (San Francisco, California) Cavan Real Estate Investments Church of Jesus Christ of Latter Day Saints Circle G Development City of Belton, Missouri City of Fenton, Missouri City of Glendale Economic Development Department City of Independence, Missouri City of Liberty, Missouri City of Manhattan, Kansas City of Mesa Economic Development Department City of Mesa Real Estate Services City of Osage Beach, Missouri City of Phoenix Economic Development Department City of Phoenix Real Estate Department City of Tucson Community Services Department City of Warsaw, Missouri City of Webster Groves, Missouri Danny’s Family Car Wash Diamond Ventures D.J. Christie, Inc. (Overland Park, Kansas) DMB Associates, Inc. DMJM Arizona, Inc. Dushoff & McCall Gammage & Burnham Gilded Age (St. Louis, Missouri) W.M. Grace Development Greystone Group (Newport Beach, California) Greenberg & Associates, Inc. (Tucson, Arizona)Holiday Hospitality Corporation (Atlanta, Georgia) JPI Development


Kaiser Permanente (Oakland, California) LandGrant Development (San Diego, California) Landmark Organization, Inc. (Austin, Texas) Lee’s Summit Economic Development Council (Lee’s Summit Missouri) Lerner Companies (Omaha, NE) Lewis and Roca Loftworks, LLC (St. Louis, Missouri) Lowe’s Home Centers, Inc. (North Wilkesboro, NC) Maclay Properties Company (Dallas, Texas) Marriott International, Inc. (Washington, D.C.) McGowan/Walsh (St. Louis, Missouri) MCO Properties Metropolitan Housing Corporation (Tucson, Arizona) Microtel Inns Miller, Klutznick, Davis, Gray (Denver, Colorado) Navajo Nation Division of Economic Development Northern Equities Company Northern Trust Bank Opus Northwest Opus West Corporation Pederson Group, Inc. Phelps Dodge Corporation Pivotal Group Pulte Home Corporation (Phoenix, Arizona) Pulte Home of Greater Kansas City Ralph J. Brekan & Company RED Capital Development (Kansas City, Missouri and Phoenix, Arizona) River Run Development (Boise, Idaho) Royal Properties (Champaign, Illinois Steiner + Associates (Columbus, Ohio) SWD Holdings, Inc. (San Francisco, California) Tetra Tech, Inc. (Tucson, Arizona) The Innova Group Tucson The University of Arizona Department of Economic Development The University of Arizona Medical Center Tucson Realty (Tucson, Arizona) Union Homes (Salt Lake City, Utah) United Properties USbancorp Piper Jaffray (Kansas City, Missouri) Wal-Mart, Inc. (Bentonville, Arkansas) Wells Fargo Bank Corporate Properties Group Westinghouse Communities Wolfswinkel Group Yavapai-Apache Nation (Camp Verde, Arizona)


EXHIBIT B Resume of Eric S. Lander, Principal Canyon Research Southwest, Inc.


ERIC S. LANDER EDUCATION In May, 1981, Mr. Lander received a B.S. in Marketing from the Arizona State University College of Business Administration. He attended Arizona State University from September 1977 to May 1981, and received honors status for his superior cumulative grade point average. During this time, he was an active member of the Marketing Club and National AMA as well as a participant in several research projects involving both local and national firms. In May, 1992, Mr. Lander received a Masters in Real Estate Development and Investment from New York University, graduating with honors. BUSINESS EXPERIENCE Canyon Research Southwest, Inc. President (October 1984 to Present)

Established Canyon Research Southwest, Inc. as a multi-disciplined real estate consulting firm designed to provide comprehensive research and analysis to the development, financial, investment, and municipal communities. Responsibilities include direct marketing, project management, staffing, and client relations. The firm has performed in excess of 400 major consulting assignments with over 75 local and national clients. Fields of expertise include market and feasibility analysis of large-scale master planned communities, freeway oriented mixed-use projects, retail centers, office complexes, business parks, and hotels. Additional services include fiscal impact studies, property valuation, and development plan analysis.

Mountain West Research Associate (December 1988 to January 1990) Senior Consultant (October 1983 to October 1984)

Mr. Lander assisted in managing the Commercial Real Estate Services Division of Mountain West, Arizona's largest real estate and economic development consulting firm. Responsibilities included direct marketing, personnel management, client relations, and consulting on large-scale commercial, office, industrial, and hotel projects. Also contributed to several real estate publications and assisted in the management and marketing of the firm's commercial, office, and industrial (COI) data base.

Iliff, Thorn & Company Marketing Assistant (January 1982 to December 1983)

Joined Iliff, Thorn & Company during its infancy and became solely responsible for providing in-house marketing support services to its commercial real estate brokers. These services included demographic research, office/industrial/retail market studies, raw land sales packages, site selection analysis, client relations, and property research. Major accomplishments included establishing and implementing office and industrial absorption studies, devised central office market and available raw land files, and organized the development of an industrial/retail map. Also, during this time, Mr. Lander obtained a real estate sales license and became involved in commercial brokerage activities.


ERIC S. LANDER Page 2 RANGE OF EXPERIENCE In 1987, Mr. Lander, in cooperation with the Drachman Institute of Regional Land Planning, published a working paper titled "Land Development as Value Added in the Development Process and Appropriate Criteria to Rank Sites for Selection of Master Planned Satellite Communities." Since the publication of this working paper, Mr. Lander has conducted numerous market feasibility studies on existing and proposed, large-scale, master planned communities in the Southwestern United States, totaling over 80,000 acres. The working paper was also evaluated and utilized by such prestigious universities as Harvard, M.I.T. and the University of North Carolina as part of their Masters program in Real Estate, City and Regional Planning, and Business. Mr. Lander is an instructor with the Commercial Real Estate Institute, teaching classes in Market Analysis, Commercial Property Valuation and Land Valuation. Developed a model designed to evaluate and rank the development potential of freeway interchanges. The methodology for ranking freeway properties is based on a list of 25 criteria which provide a framework to efficiently compare the strengths and weaknesses of various freeway sites. Seven (7) criteria have been established which apply to metropolitan area economic base and real estate market, five (5) criteria evaluate the region influenced by the presence of the freeway in question, and thirteen (13) interchange and site-specific criteria are aimed at determining future real estate development opportunities. This model has been utilized in evaluating freeway-oriented, mixed-use projects anchored by regional malls, business parks, office complexes, and hotels. Mr. Lander has provided consulting services on downtown redevelopment and historic preservation efforts. Recent examples include a heritage tourism study for the Erie Canal terminus in Buffalo, New York; evaluation of potential office, retail, hotel and arena development in the downtown areas of Glendale and Mesa, Arizona; retail market evaluation and redevelopment plan for downtown Warsaw, Missouri; a downtown master plan for downtown Lee’s Summit, Missouri; and a redevelopment plan for the 24 Highway Corridor in Independence, Missouri. Mr. Lander has conducted TIF and TDD Revenue Projections for a variety of large-scale retail projects in Missouri and Kansas. Tax Increment Financing and Transportation Development Districts are government-backed funding mechanisms designed to finance project-specific public infrastructure improvement. Funded is provided via the issue and sale of bonds. In the case of Tax Increment Financing the bonds are repaid with incremental increases in property tax and sales tax revenue generated by the designated redevelopment area. Transportation Development Districts involve the levy of an additional sales tax on businesses operating within the redevelopment area. Mr. Lander has conducted STAR Bond Feasibility and Market Studies on several proposed developments in Kansas, including the Kansas City Tourism District, Legends at Village West, Kansas City Research & Medical Campus, and Rosedale Station Shopping Center. The Market Study evaluates the market positioning, market demand, short-term development potential, and economic impact for the proposed Redevelopment District. Meanwhile, the Feasibility Study provides a STAR Bond revenue vs. costs comparison to determine the ability of the Redevelopment District to cover debt service for the projected STAR Bond obligations throughout the bond maturity period.

multi-use arena market feasibility study interstate 70 ... · january 2007 prepared for: city of...

Documents