In the beginning, western Wyandotte County was without a major economic development engine. Later, the people said, “Let there be a speedway,” and it was so.
Today, the Village West tourism district, which includes The Legends shopping center, Cabela’s, Nebraska Furniture Mart, Great Wolf Lodge and a host of other amenities, stands as the top tourism destination in all of Kansas.
The group that started it all was the International Speedway Corporation, which in 1997 said it wanted to build Kansas Speedway in Kansas City, Kan.
Eleven years later, the company is back at the table, this time with a partner - Baltimore-based Cordish Company - in proposing a $705 million destination resort and casino.
Earlier this week, the Kansan met with Speedway President Jeff Boerger, vice president Pat Warren, manager of compliance, marketing and communications Latoria Chinn, director of facility operations Darren Cook, and Cordish principal Joe Weinberg to discuss the group’s proposal.
“You couldn’t have ever convinced me ten years ago that what has gone on here would have happened,” Warren said of western Wyandotte County’s development.
Cordish and the Speedway have signed up the Hard Rock brand for the casino, which would be located on current track property, starting near Turn 2 and continuing north alongside the back straightaway. The first phase calls for 300 hotel rooms, 3,000 slot machines, 100 table games, several restaurants, a convention facility, a retail and entertainment district, nightclubs and a spa and fitness center.
“We’ve fleshed out the design of our entire project,” Weinberg said. “We’ve treated this to be in a position to roll (once selected).”
Local, state impact
Speedway officials point to their ten-year track record as a community partner in what they’d do if their casino proposal is selected - and even if it’s not.
“We’re the only (proposal) that will be here even if we lose,” Warren said. “We’re here forever.”
But no one doubts the even greater benefit the Speedway area could provide if its proposal is selected.
The group estimates its annual gross gaming revenues at $332.8 million - second highest among the four casino proposals - which would place it near the high-end of revenue projections for a casino completed by consultants working for the Kansas Lottery Gaming Facility Review Board.
Based on gaming estimates, the Hard Rock casino would send $73 million (22 percent of gross gaming revenues) to the state, with an additional $10 million to be split among KCK, Bonner Springs and Edwardsville. If revenues range from $350-$400 million, the group would send 25 percent to the state, and if revenues exceed $400 million, the state would get a 28 percent cut.
Both Boerger and Weinberg say their revenue estimates are within reason.
“We’re very confident in our estimates,” Weinberg said. “We have by far the best location in that we’re the only project located off two major highways.”
Boerger adds the combined effort of Cordish and the Speedway will be able to draw from a large database of customers to help drive revenue.
“We can hit a lot of people,” Boerger said. “It’s unparalleled - we’ll be able to draw millions of folks.”
Because of the project’s location, different groups stand to benefit on the property tax front. In total, the project would generate nearly $16 million, $5 million of which would go to the Bonner Springs-Edwardsville School District (10 percent would go toward the KCK Public Schools District).
The project’s 275,000 square-feet of dining and retail space would be among the chief driver of roughly $3 million in local sales tax revenue. An additional $11 million would be generated for KCK’s 8 percent transient guest tax.
Warren says the strength of the proposal’s revenues depend a lot on the partnerships of the project.
“You can’t over-estimate the importance and the strength of the Hard Rock brand,” he said. “The research is pretty clear that branding makes a difference.”
Community outreach
Boerger says the Speedway team has been engaged in outreach efforts as soon as the group decided it would submit a casino bid.
“We’ve worked to connect with folks who want to learn more about our project,” he said. “We’ve reached out to a lot of groups.”
Chinn says the development team has met with officials at Kansas City Kansas Community College and Donnelly College to open up lines of communication, and to let the colleges know of future employment demands created if the Speedway get the casino selection.
The group estimates the proposal will employ 1,991 workers during operations. An additional 2,272 workers would be needed during the construction phase.
“We’ll need thousands of employees,” she said of the project. “We’ve been very busy working with everyone to make sure they know everything.”
As part of a pre-development agreement with the Unified Government, the Hard Rock proposal has committed dollars to a host of funds. The group will make an annual $1.135 million contribution that would be split up into $500,000 to a charity fund, $100,000 to UG Parks and Recreation Department, $25,000 to Wyandotte County Convention and Visitor’s Bureau, $500,000 to non-host school districts and $10,000 to the Kansas City Kansas Area Chamber of Commerce.
Additionally, the group estimates a $3.5 million annual payment (based on annual gaming revenues) to the UG, to be used as the UG sees fit. That payment would rise as gaming revenues increase.
“Our (contributions) are a reflection that our group is committed to being a part of the community,” Weinberg said. “All boats will rise up.”
Boerger says the public already knows what the Speedway is all about, and that the Speedway has built up trust in the community.
“We’ve always kept Kansas’ best interests in mind,” he said. “What we say we’re going to do, we do.”
The stretch run
When the Kansas Lottery Gaming Facility Review Board kicks off presentations next Wednesday for casino proposals in Wyandotte County, the Hard Rock proposal goes first.
While going first means the group won’t see the other presentations, it does give the Hard Rock team a chance to set expectations.
“This has been a lot of fun for me,” Boerger said of working on the proposal and preparing for Wednesday’s presentation. “All groups have done an outstanding job, and at the end of the day, the Kansas taxpayer wins.”
The ability to finance the project is likely to be an issue addressed by all four Wyandotte County proposals. Weinberg said the question is important and something his group is comfortable talking about.
“We’re putting more money in the ground than any other project,” he said. “If we win, we’ll build it and get it done.”
Both Boerger and Weinberg say their two companies - International Speedway Corporation and Cordish, respectively - aren’t burdened by other massive projects that might take priority over the KCK casino.
“We already have financing commitments on the debt side, and we are both committed to providing a significant amount of equity into the project,” Weinberg said. “Both of our companies are extremely liquid and have a history of financing properties of this size.”
The group plans to dangle an additional carrot to the review board - the ability to open up an 80,000 square-foot temporary gaming facility that would house up to 2,000 slot machines and 75 gaming tables.
Weinberg says the facility would be operational within eight months of the group being selected.
“It would give us a year-and-a-half head start,” he said. “You wouldn’t know that you were in a temporary facility.”
The group didn’t give a cost to the temporary facility, other than the $705 million overall cost does not include the temporary digs. They estimate it could generate $200 million in revenues before the permanent facility opens, which could happen in the first quarter of 2011.
Warren says the Kansas Speedway has brought the entire Kansas City metropolitan area up a level that comparable cities can’t match.
“It’s almost like having another professional sports franchise,” Warren said, adding that the ability to add a destination resort casino was, “an opportunity that we couldn’t pass up.”
