Aldermanic committee OK’s Kiel plan
A key Aldermanic committee this morning approved plans and financing agreements to redevelop the long-empty Kiel Opera House.
The committee’s Housing, Urban Development and Zoning Committee voted 13-1 to pass the $74 million project on to the wider Board, a week after it held the matter for further study.
In a crowded 90-minute hearing, Board members quizzed SCP Worldwide partner Ken Munoz about the project, which has met opposition from owners of the Fox Theater, who say the city would be subsidizing a new competitor in the region’s theater market.
But ultimately the committee OK’d the proposal, with a few small adjustments. It could be voted on by the full Board by mid-June. SCP has said it wants to start construction in August.
SCP agreed to several changes to protect the city in case the company – which also owns the St. Louis Blues and Scottrade Center – can not pay off $29 million in bonds that will help fund the project. It also agreed to extend limits on Broadway-style shows out to five years, from the original three, a measure designed to reduce concerns about competition with the Fox. The city will also have a 60-day exclusive negotiating period if SCP wants to sell its rights to the building.
SCP will be allowed to hold 36 traveling theatrical shows in the Kiel’s first year of operation, up to 64 in its fifth year. The Fox, by comparison, holds 100 to 110 such shows a year. Munoz said he was hopeful that they could attract enough new shows to fill both theaters, but acknowledged that was somewhat “up in the air.”
SCP also plans to run shows that it produces at the Kiel, as well as concerts and family-style shows – some of which now run at Scottrade Center, Munoz said. The first show, he hopes, would be a four-week run of How the Grinch Stole Christmas, which is produced by a subsidiary of SCP.
Munoz also addressed concerns about the high level of public subsidy – roughly $60 million of the $74 million project will come from tax credits or bonds backed by tax revenue the city now collects.
“We understand that,” he said. “But this is what it takes to get this done.”
SCP hopes for just a “modest profit” operating the building, Munoz said, and noted that it is investing $14 million and is on the hook for the $29 million bond issue, which is to be paid with amusement tax revenue now collected on Blues tickets. If there’s a shortfall, SCP will make up the difference.
“We’re on the hook for that. We’re guaranteeing that,” he said. “The risk is ours.”
Aldermen also raised concerns about the Black Repertory Theater; Munoz and partner Chris McKee said they are in talks with the Black Rep about using a smaller secondary theater at the Kiel when the Rep wants to.
Alderman Shane Cohn encouraged the Kiel and the Fox and other local theater groups to work together to boost the region’s performing arts industry. Alderman Samuel Moore raised concerns about the use of minority contractors and construction workers on the project. Alderwoman Marlene Davis apologized for the level of confusion around the project in recent days and criticized city officials who negotiated the deal for not involving the Board of Aldermen earlier.
Alderman Antonio French raised concerns about the roughly $1.5 million in amusement tax revenue the city will forgo for the bonds. Barbara Geisman, the city’s deputy mayor for development, said much of that money would be recouped in tax revenue associated with construction in the first couple of years, and that the theater itself was expected to generate at least $500,000 a year in new tax revenue once it’s up and running.
See Thursday’s Post-Dispatch for more coverage.
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While it would be nice to have Kiel Opera House rehabbed and reopened, I do not agree that St. Louis taxpayers should foot the bill. Wasn’t there a
deal in place with the original Kiel developers? Weren’t the developers supposed to rehab the Opera House in return for being allowed to build the Scottrade Center (and being given a monopoly by the city when it tore down the Arena instead of reusing it)? If it can’t be done without tax dollars then it should not be done at all. I would not be so quick to dismiss the concerns of owners of the Fox. The posters here do not know their financials…we don’t know if they are hanging on by a thread…but we do know that they successfully rehabbed the Fox, have maintained it, paid taxes, and have, with SLU, brought new life to midtown. We need to make sure that we aren’t destroying the Fox only to leave the taxpayers on the hook to forever subsidize the owners of Kiel. Why not give the Fox the same deal and see who survives with a level playing field?
I agree, RealtyCheck - the renovation of the Arcade would provide a major boost to downtown. I think St. Louis Centre should be a higher priority, but would be very happy to see either project get off the ground.
Way to go.This is another of the big projects that needed to get done as part of downtown’s revitalization. While I agree that we really want to see the Arcade and St. Louis Centre get done also, there is never just one (or two) projects that are the be all and end all of turning downtown around. Let’s not forget the $4.5 billion invested in the past 10 years, the hundred historic building that have been put back into active use, the 5,000 new residents, the 125 new shops and restaurants and major projects like Busch Stadium, Lumiere Place, City Gardens, and others. We are not yet where we need and want to be but let’s not lose sight of how far we’ve come. Reopening Kiel is another major step and will also help to spur surrounding development.
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Amen!
To Kevin Farrell - I agree, St. Louis has seen some successes…my point again was that the developer of Scottrade Center already made a commitment to rehab Kiel Opera House and they did not live up to their side of the deal…they let the building sit ideal, making minor investments in lighting and exterior upkeep…why should the taxpayers trust them now? If their business plan hinges on subsidies to succeed, then it is a bad business plan…how many failed projects has the city subsidized….we can go back to the Spanish Pavilion…the Santa Maria on the riverfront…the Admiral (where we subsidized 6 Flags to run a ridiculous floating theme park)… then of course there was St. Louis Center…and the money losing convention hotel on Washington Avenue…I think the city subsidized failures far outnumber the successes but let’s not forget about the success called the Fox Theatre…and let’s make sure that we aren’t destroying it only to forver subsidize another white elephant…what does the city or Kiel’s owners know about producing live theatre? What is their experience or track record that should convince us trust them with tax dollars?
Seeker, The group reviving the Keil revived Radio City Music Hall, I would say that was pretty successfull.
I think this metro area can easily support two live entertainment venues.
St Louis Centre needs to go, if they can turn it in to something usable at least just tear it down and turn it into green space, it’s the eyesore of all eyesores.
You’d be hard-pressed to find any projects downtown or elsewhere, for that matter, being built without some form of subsidy. Subsidy doesn’t necessarily mean that the Kiel’s owners have a bad business plan.
And SCP - Dave Checketts’ group which owns the Blues, Kiel Opera House and Scottrade - is experienced in producing shows.
I think it’s great that they’re finally going to open the Kiel again. Sure, it’s bad for the Fox, but for Mary Strauss to cry at this meeting? Oh my gosh. I understand she put all her heart and soul into rehabbing the old Fox, but re-opening the Kiel is great for the city. In her eyes she wants the Kiel to remain boarded up, dusty and decommissioned, but we already have plenty of places like that in the city. I say give it a chance and eventually the Kiel will bring life back to St. Louis.
I hope the city does better this time. If it is a repeat of the Cards/BallPark village fiasco, then it is one more example of how screwed up the government and city are. Let’s be honest folks. St. Louis gave the Cardinals and the DeWitts loads of cash and tax incentives for a “promise” to build Ballpark Village. No timetable, no milestones, no penalties. Cash is trnasferred. The hole grassed over and all this BEFORE the economy so that is not the excuse. Pitiful, and for those who support the politicians in this area, shame on you. You got what you deserve, a hole in the ground.
BTW, Dave Checkitt’s current company did not renovate Radio City Music Hall. Radio City is owned by Cablevision, which also owns Madison Square Garden. Checketts, who then was president of MSG, oversaw and ran the renovation, but it was not his own company. Then again, if all the reporters weren’t let go and those under 20 and recent hires retained, they might have been able to discover this. I believe it is even on Cablevision’s website.
I think all you need to know about Checketts is to take a look at the Knicks, Rangers and Garden after he left. Ain’t good. He oversaw RC Music Hall for Cablevision which has never been the same since they showed him the door. This is not opinion, look at the properties since Checketts was dismissed. I am so happy STL did not do the same thing today. STL is better to have him believe me, I lived in NJ while he was the man there and NY sports are a laughingstock since he left but Dolan thinks he is smarter. Good for the Kiel Opera House today. If everyone gets out of Checketts way it will thrive and the city will be alive.