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Presented to the Sedgwick County Commission
September 26, 2007
CORRECTING THE ARENA MISTAKE
by Karl Peterjohn
In 2004, I was the leading spokesman opposing the downtown arena and the Kansas Taxpayers Network led the organized opposition to the sales tax hike that would pay for this project. Our opposition was based upon flaws in the proposal, cost problems, difficulties with location inside the dowtown area, and the tax hike.
I am going to resist the temptation in light of the $60 million construction cost overrun to say, "I told you so."
$60 million is a lot of money. It is almost 2 ½ times the $25 million that it cost to remodel the Charles Koch Arena at WSU a few years back.
This $60 million cost overrun is more than the $56 million that was the projected cost to remodel the Kansas Coliseum. Today, Sedgwick County taxpayers still don't know what you will do about the Kansas Coliseum and how much it will cost to demolish or do whatever you intend to do with this facility.
$60 million is equal to almost 15 mills of property taxes or roughly half of the entire county property tax mill levy for one year.
Sedgwick County has a big problem with the downtown arena. The original cost estimates have grown while the benefits that were supposed to be provided have shrunk, disappeared, or in the case of parking, been shifted somehow over to the city's CIP budget to the tune of $25 million.
If that $25 million for parking was added to the current $201 million this project would be 22 percent over the $184.5 million cost estimate that the voters mistakenly believed they were actually voting upon in November 2004. I know that all of you are aware of KSA 12-6, 122 that requires the city or county to take one of three actions when costs go beyond 20 percent: to vote for the project again, vote against it, or resubmit it to the people.
The downtown arena continues to be a mistake. Costs are soaring. Anchor tenants are still MIA. A large number of the smaller events that have been at the Kansas Coliseum are likely to move to the new private arena being built in Park City.
Fortunately, a large part of the spending for the downtown arena has not occurred. Let's not throw more good money after bad. Let's admit that conditions have changed and the need for a large facility downtown does not exist today. Instead of taking the $60 million surcharge for constructing just the building that appeared when the single quotes came out, let's use it to update the KS Coliseum. Let's pay the bills that have already been incurred but let's turn around and use the balance to provide some property tax reductions for voters.
I believe that over $100 million and perhaps as much as $120 million or even $130 million could be diverted to property tax relief out of the total tax revenues taken in by the 1 cent sales tax.
The Sedgwick County Commission should place this proposal in front of voters. Let's not compound the mistake that was made when the state officials retroactively authorized the November, 2004 vote during the 2005 legislative session.
You have an important decision to make on this deeply flawed downtown arena project. You are facing a cost overrun for just the arena that is already 78 percent above the 2004 estimate and the first shovel of dirt has not been overturned. I expect more cost overruns to follow.
Let the people get to vote again, and give them a proposal that would provide them with property tax relief. That would do more to stimulate our community's economy than constructing this building. |