Unified Government looks to buy T-Bones stadium, gives owner a tax rebate

The Unified Government of Wyandotte County has done the Kansas City T-Bones a solid. The UG quietly agreed to buy the semipro baseball franchise’s stadium and gave its owners a break on their delinquent taxes.

An announcement on November 18 from the UG cast its plans to buy CommunityAmerica Ballpark with $8 million of taxpayer money as a “partnership.” That’s more or less true. It was also a maneuver to rescue the T-Bones, which treads in the difficult business of independent-league baseball without a Major League
Baseball affiliation.

Despite the bailouts, T-Bones owner Adam Ehlert says his franchise is not in distress.

“No, not at all,” Ehlert tells The Pitch. “We’ve had an awfully good track record for 12 years.”

Yet, a January 9 agreement struck between County Administrator Dennis Hays and the T-Bones shows that WyCo agreed to two separate tax rebates for the T-Bones, totaling $156,763. Tax records show that the T-Bones owed delinquency fees on taxes in 2010 and 2011.

Ehlert tells The Pitch that while the baseball team itself operates in the black, its profits subsidize his separate business entity, which owns CommunityAmerica Ballpark.

The UG’s deal to buy the stadium represents another in a long list of professional sports teams turning to local and state governments for taxpayer assistance.

Government subsidies for professional sports more commonly occur at the big-league levels. Kansas City did it before with the Truman Sports Complex, which is owned by Jackson County. In fact, the T-Bones’ deal with the UG bears similarities to a previous Kansas City stadium deal. Beer baron George Muehlebach built Muehlebach Field at 18th Street and Brooklyn in 1923 and later sold his stadium to Kansas City, at which point it was renamed Municipal Stadium and served as the home of the Kansas City Royals and the Kansas City Chiefs.

“No matter how profitable a baseball team or football team is, it’s not going to support its own facility,” Ehlert says. “We are the absolute anomaly here in supporting our own facility, supporting it for 12 years. Frankly, we’re not going to support it for another 12.”

Hays’ deal in January set the groundwork for the UG to buy the stadium later in the year. The UG made two option payments in January and April, each worth $87,232. Those payments and the tax rebates were not publicly disclosed until November.

The agreement also said the bank holding CommunityAmerica Ballpark’s mortgage had agreed not to take “any adverse actions” (which probably means foreclosure) on the stadium if both the UG and the T-Bones stuck to the terms of their deal.

“The problem with the Ehlerts is, they took out a private loan to pay for that stadium,” Mike Taylor, a spokesman for the UG, tells The Pitch. “The bank note on that loan is a heavy burden.”

So the UG will use $8 million worth of sales-tax revenue (STAR) bonds from the Village West project to take ownership of the stadium, as long as UG commissioners approve the deal later this year.

STAR bonds are popular taxpayer-funded financing mechanisms in Kansas, particularly in Wyandotte County. A small part of the financing package for the Kansas Speedway involved STAR bonds. They played a bigger role in the development of Legends at Village West and Sporting Park.

STAR bonds work by plowing local and state sales taxes back into projects deemed tourist destinations, places that people will travel more than 100 miles to visit. STAR bonds were once available only to developers for project expenses like utility and infrastructure work related to big projects. Over the years, the Kansas Legislature has restructured the bonds so that today they can be used to buy a completed baseball stadium.

Of the $8 million that the UG plans to spend on the stadium purchase, $5.5 million is the actual price tag for CommunityAmerica Ballpark, and $2.5 million will be earmarked for future repairs or upgrades. That would seem to answer the question of which party (the UG) will be responsible for financing stadium improvements during the T-Bones’ planned 20-year lease. Final lease details haven’t been struck.
From the UG’s perspective, owning the stadium is a better deal than having the T-Bones move or go out of business while Ehlert still holds title to prime real estate in the middle of the county’s main destination point.

Neil deMause, a New York author who has written extensively about public financing of sports stadiums and arenas, tells The Pitch that other pro sports facilities have been built privately and then later sold to local governments, such as Nationwide Arena in Columbus, Ohio, the home of the National Hockey League’s Blue Jackets, and the Target Center in Minneapolis, where the NHL’s Wild and the NBA’s Timberwolves play.

A scenario similar to the T-Bones’ is playing out in Tennessee, where Major League Baseball’s St. Louis Cardinals bought out its minor league affiliate, the Memphis Redbirds. The club then asked the city to buy the team’s stadium.

Memphis Mayor A.C. Wharton Jr. sounded a note of caution about the team’s enthusiasm for the city’s purchase of AutoZone Park.

“I do not have a contract,” Wharton told Memphis paper The Commercial Appeal. “I do not have an agreement or even a draft of an agreement to review. What we have, I guess, is a sort of clash of business cultures in which the private sector is moving at a pace that is not exactly in sync with what I, serving the public entity, have to honor.”

The T-Bones and the UG clearly don’t have that clash of cultures. They’ve privately worked out a deal.