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Published in Economic Development

Despite new state law, no solid plans for Kalamazoo event center

BY Sunday, January 17, 2021 06:49pm

KALAMAZOO — A new funding tool recently signed into law is intended to help finance an event center in downtown Kalamazoo, but it’s unclear if there is a desire or solid plans to move forward with the venue.

House Bill 4816 was sponsored by former state Rep. Brandt Iden, R-Oshtemo Township, and was signed into law by Gov. Gretchen Whitmer on Dec. 30. The Regional Event Center Financing Act creates a financing program for potential venue projects in Kalamazoo, Ottawa, Muskegon, Ingham and Washtenaw counties.

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“The impetus for this legislation was basically to allow access to another economic development tool that larger communities have like Grand Rapids and Detroit,” Iden told MiBiz. “I have always supported an event center downtown because I believe that if urban core centers don’t grow, then they have a tendency to just die out.” 

Iden was term-limited out of office at the end of 2020. He served on the Kalamazoo County Board of Commissioners for two years before he was elected to the state House of Representatives in 2014. 

“The event center was only ever discussed in concept. There were never formalized plans or a formal agreement about the size and scope of the project,” Iden said. “It’s always been preliminarily discussed as a high-level concept for the community.”

The new legislation requires an event center financing program to describe the proposed size, location, cost and financing structure of the proposed facility, and to specify an assessment to be levied under the program, which can’t exceed 4 percent of county-wide hotel room charges. The assessment would effectively be a small increase to a county’s hotel lodging tax.

The financing act defines an event center as a convention hall, auditorium, stadium, music hall, arena, meeting rooms, exhibit area and related public areas owned by a municipality or related event center authority.

In order for a county to use the Regional Event Center Financing Act, 60 percent or more of the county’s hotel owners would have to vote for its approval. 

The new act mandates that 0.25 percent of the revenue from the assessment must be used for recreational services, and the rest could be used to cover costs including paying administration, enforcement of the ordinance, financing of property acquisition, construction and related maintenance costs.

“This is one of the ways I believe we can bring businesses to downtown and hopefully post-pandemic bring development to downtown Kalamazoo,” Iden said.

Other funding would likely have to be identified for an event center if the development is pursued because the assessment likely would not cover the entire cost, Iden said.

No specific plans

For at least the past two decades, there have been rumblings from different groups about constructing a downtown Kalamazoo event center. Despite discussions over the past two years, county officials have yet to see a specific proposal, said Kalamazoo County Board Chair Tracy Hall. A potential event center did not come up during the county board’s annual retreat on Jan. 8, Hall said.

Former Southwest Michigan First is the latest group in Kalamazoo to champion a downtown event center. The economic development agency has conceptually proposed a plan twice to the county board over the years for an event center ranging in cost from $80 million to $110 million, with the capacity to hold 6,800-9,000 people.

Former Southwest Michigan First CEO Ron Kitchens was most recently the spokesperson for the project. According to media reports, Kitchens last month said construction on a project could break ground in 2024. Reports also put a $110 million price tag on the project to be located between North Westnedge Avenue and North Park Street downtown.

Kitchens stepped down from his role effective Jan. 15 to accept a similar position in Alabama. Kitchens did not return repeated requests for a comment from MiBiz.

Southwest Michigan First Interim CEO Carla Sones said the organization is currently focused on COVID-19 business recovery efforts and its national search for Kitchens’ replacement.

“We are delighted that the legislation passed that would allow the community to make a decision on the future event center, but our focus right now is on COVID-19 recovery,” Sones said.

If Kalamazoo or the other four counties chose to utilize the financing tool, the next steps would require the county board of commissioners to vote on the financing act. 

While Hall said she is more favorable to this new financing act than a previously proposed food and beverage excise tax, many of her constituents were opposed to previous event center plans. She also has questions about specifics of the event center and where other funding would come from outside of the lodging assessment in the new law. 

Southwest Michigan First asked the county board in 2019 to put a food and beverage excise tax on its upcoming ballot that would fund the construction of the event venue by collecting a surcharge on 1 percent of food and beverage sales from Kalamazoo County restaurants. A similar proposal to fund the venue was proposed the year before, but it never made it onto the ballot. No community members or groups have reached out to the county about the proposed event center since Iden’s bill passed, Hall said.

According to Southwest Michigan First’s June-July 2018 edition of its publication, 269 Magazine, the idea for a downtown event center in Kalamazoo was pitched by community leaders for the first time in 2003. 

“This new financing act does provide an interesting option,” Hall said, “one that might be more palatable to some of my colleagues than the (food and beverages excise) tax that was proposed a couple years ago.”

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