At the start of the season, I was hopeful that in August that the Royals would be in the playoff picture and that we would know where they are planning to build a new stadium. We\u2019ve made it to August, and the Royals do remain in the playoff picture, although they are on the outside looking in. It\u2019s been all quiet on the stadium front, despite Royals owner John Sherman\u2019s earlier statement that the team had a \u201cstated objective\u201d to talk about a specific location in the \u201cJune-July period.\u201d<\/p>\n<\/div>\n
Sherman made the statement in a press conference on March 26th in response to a question from Kansas City Star columnist Vahe Gregorian. Here\u2019s a video of the press conference<\/a> if you want to listen yourself; Sherman\u2019s comments about the stadium start around the 8 minute mark. Listening back, I think you can tell that the Royals owner is careful to not use the word \u201cdeadline;\u201d the team has set deadlines previously in this process that were subsequently missed<\/a>. Still, it seems fair to say the Royals had an internal goal of talking about a specific location already and did not reach that goal.<\/p>\n<\/div>\n I reached out to Royals Vice President of Communications Sam Mellinger to ask about the missed objective and to see if there is a new goal to publicly discuss a specific location, and he declined to comment for this story. This is just my guess, but I think the team is going to be wary about discussing anything publicly until they are ready to announce a specific site – the team didn\u2019t have much to say to reporter Josh Merchant<\/a> when he asked about a decision at the end of June.<\/p>\n<\/div>\n So that leaves us to sort out the following on our own; what happened that led to this delay, and when can we expect a decision by? Also, is there anything in the tea leaves that gives us any clues as to where the stadium will ultimately end up residing?<\/p>\n<\/div>\n There are certainly things happening behind the scenes that we don\u2019t know about and only get occasional glances at that likely contributed to this delay. One example is just slow communication, which the Kansas City Chiefs expressed frustration about in a letter<\/a> to Kansas House Speaker Dan Hawkins. In general, this entire process has taken longer than everyone wanted it to, so it\u2019s not shocking that it continues to be slow moving and that parties outside the Royals control contributed to that delay.<\/p>\n<\/div>\n Missouri passing a bill in June <\/a>that allows for stadium funding seems likely to have contributed to the stated objective being missed as well. My assumption is that the Royals and Chiefs had an inkling that something would be coming from Missouri, but you can\u2019t bank on it happening until a bill actually passes. Jefferson City passing legislation and giving Missouri a competitive offer against Kansas probably put multiple spots back into play that need to be reevaluated given the changes in the landscape.<\/p>\n<\/div>\n Kansas then extended the deadline <\/a>to claim the STAR bonds until the end of the calendar year. Originally, the deadline was at the end of June, which conveniently lined up with the Royals stated objective of their own timeline. With Topeka extending the deadline, there was less pressure for the Royals to make a specific site decision now, and gave them more time to keep exploring all options.<\/p>\n<\/div>\n I\u2019m somewhat sympathetic to the Royals in this specific situation. If I was a decision maker and Missouri passed the law in June, I would want more time to explore my options. When Missouri passed the stadium law, I figured if the Washington Square Park site was all but done and just waiting on the state, then we would have seen an announcement quickly. Since that didn\u2019t happen, they are clearly still figuring things out, and it hasn\u2019t been much time at all in terms of gigantic real estate projects since Missouri passed their funding bill.<\/p>\n<\/div>\n Still, this missed objective does not come in a vacuum. The process as a whole has been slow, confusing and previous deadlines have been missed. Most people in my life who I talk about this with express frustration and a lack of trust in the Royals because of everything that has happened previously, particularly around how haphazard the process felt before the Jackson County vote. Even if this moment looks different to my eyes, it\u2019s contributing to the general malaise and exhaustion people feel about the new stadium.<\/p>\n<\/div>\n There have been some interesting stories that give us some clues about what locations the Royals have been looking at and which ones remain realistic. If I had stock in the three locations that seem like the frontrunners, Downtown, Clay County and Overland Park, there is one that I would buy more stock in, one that I would hold and one that I would sell.<\/p>\n<\/div>\n This is just one man\u2019s predictions based on what\u2019s publicly available, but I would be selling my stock in the Downtown Stadium location. There\u2019s been plenty of time to work on that spot, and if the Missouri bill was the only holdup we could have had an announcement by now. Instead, Thomas Friestad of the Kansas City Business Journal <\/a>reported that the old Blue Cross and Blue Shield of Kansas City headquarters are under contract to an apartment developer and investment firm. Those offices were once under contract by 3-D Development, who were holding them for a potential ballpark district around Washington Square Park.<\/p>\n<\/div>\n Kansas City Mayor Quinton Lucas downplayed the development in his comments to the KCBJ, but I can\u2019t imagine it\u2019s a good sign that someone else has a contract for that area and presumably has different plans for it. Contracts can change and maybe the Wichita firm would work with the Royals, but it just adds another wrinkle to a complicated process and possibly indicates that the Royals aren\u2019t that serious about the spot if someone else can come in and purchase the contract.<\/p>\n<\/div>\n Progress in Clay County seems to be plugging along, so I would hold my stock in that location. We know that the Royals have sent a term sheet <\/a>to Clay County and that the County has approval for a Sports Authority<\/a> like Jackson County has. We don\u2019t have much more information than that; this presumably needs to come together quickly if it\u2019s going to come together at all.<\/p>\n<\/div>\n The stock I would be buying is the Aspiria location in Overland Park. The Royals purchased the mortgage of the old Sprint Campus back in May. We know that current property owner Occidental Management has to make a $232 million loan payment by August 9th, or the Royals could foreclose on the property.<\/p>\n<\/div>\n Real Estate Attorney Tracey Steele explained the situation to Jonathan Ketz of Fox4 back in May<\/a>:<\/p>\n<\/div>\n \u201cThe Royals\u2019 affiliated entity, they\u2019re not a bank, but they are the lender,\u201d Steele said. \u201cThey\u2019re the holder of the mortgage. They\u2019re the entity that has security interest in this piece of property, so if they foreclose, they will get the deed.\u201d<\/p>\n<\/blockquote>\n<\/div>\n Occidental have twice secured an extension on the loan<\/a>, which might be a sign that they haven\u2019t had the money to make the payment in the past. The Royals affiliate bought the loan for a reported $183.5 million, so the previous loan holder was willing to accept a discounted payoff amount rather than wait around to try to collect the full $232 million. This all makes me think that Occidental is not going to make the payment, and I doubt the Royals are going to give them another extension.<\/p>\n<\/div>\n According to the KCBJ<\/a>, the Royals don\u2019t have to move immediately to foreclose on the property if Occidental doesn\u2019t make the payment, giving them time to continue exploring their other stadium options. We should find out soon whether Occidental makes the payment, works out a deal with the Royals, or the Royals affiliate has the option to foreclose on the property and secure the deed to the Aspiria Campus, regardless of whether they exercise that option right away.<\/p>\n<\/div>\n So what are we to make of all this? If you want a TL;DR version of this article – the Royals missed their stated objective for a timeline on a public announcement for understandable reasons, but this is just one more thing that contributes to the public\u2019s frustration with the entire situation. There seems to be more complications with the Washington Square Park location, while we should find out soon what is happening next with the Aspiria location.<\/p>\n<\/div>\n When do we think any of this will get settled? It\u2019s difficult to say, and my personal guess is that we get no more comments on a specific timeframe for when a decision will be made and announced from the team. So we continue the search for clues.<\/p>\n<\/div>\n Chiefs owner Clark Hunt talked the media about this recently, and he had a few interesting comments that I think we can glean some information from. Hunt also declined to give specifics on a timeline, but did say they are feeling a sense of urgency. He told the media:<\/a><\/p>\n<\/div>\n \u201cThe urgency for us really comes from the timeframe of our existing lease, which expires in the spring of 2031. So we\u2019re coming up on 5.5 years left on the lease. Stadium projects generally are 4.5 to five years from the time you start designing, getting the entitlements, and then building whatever you\u2019re building. They\u2019re not short-term projects. So it\u2019s important for us to be able to make a decision somewhat in the near-term to be able to be on schedule to have the renovated or new building open in \u201931.\u201d<\/p>\n<\/blockquote>\n<\/div>\n While the two teams are each going their own way, they are fellow travelers with a similar timeline on when this needs to get done for logistical purposes. So I feel like it\u2019s safe to assume that the Royals are also operating under a sense of urgency, particularly since they wanted this to be announced already this year.<\/p>\n<\/div>\n With the Kansas STAR bonds deadline now set for the end of year, with no guarantee that it would get extended again (although if the two sides were close you have to think it would get extended), I expect the Royals to announce a new stadium site by the end of this year. At this point, however, I wouldn\u2019t blame anyone for adopting the (unofficial) slogan of Missouri, \u201cShow Me.\u201d<\/p>\n<\/div>\nWhy did the Royals miss their \u201cstated objective?\u201d<\/strong><\/h2>\n<\/p>\n<\/div>\n
Buy, Hold, Sell the three frontrunners <\/strong><\/h2>\n<\/p>\n<\/div>\n
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When will we finally know the stadium site?<\/strong><\/h2>\n<\/p>\n<\/div>\n
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