County advances plan for multiuse event center; first reading sets April 1 public hearing

Discover Kalamazoo on March 4 presented a detailed financial and market case for a proposed multiuse event center and youth sports facility, and the Kalamazoo County Board of Commissioners approved a first reading of an ordinance establishing an event-center financing program and countywide assessment district. The board directed the clerk to publish notice and scheduled a public hearing for April 1 at 6:35 p.m.

The proposed financing model would rely on a 4% incremental assessment on hotel revenue from stays of fewer than 30 nights across Kalamazoo County to secure debt for construction. Jane Gauche, president and CEO of Discover Kalamazoo, summarized the demand analysis and conservative revenue assumptions, saying the plan is based on STR market data, county accommodations-tax reports and a consultant study that estimated up to 36,000 incremental room nights associated with the project over multiple years. She said independent municipal advisers and PNC’s preliminary bond work indicated the project was “in the hunt” for feasibility under those assumptions.

The nut graf: Commissioners cited a fiduciary duty to vet site, bond and legal structures, but several also said the assessment model — used elsewhere in the U.S. and enabled in Michigan by the Event Center Financing Act (2020) — is a standard industry approach to fund tourism and sports venues without using general-fund taxes.

In presentations, Discover and its consultants described the revenue model: modest growth assumptions for room-night demand (1.5% annually) and average daily rate (1% annually), an adjustment for STR overstatement, exclusion of hotels under 35 rooms, and incremental room-night estimates tied to CSL’s event-demand study. The presenters said the assessment revenue would be dedicated to debt service; operating deficits would be covered by operating income or excess assessment revenue, not by general fund sources. PNC and the county’s municipal adviser said more detailed bonding analysis was required and under way.

Public comment at the start of the meeting largely favored the project. Hoteliers and local sports program leaders — including representatives of the Delta Hotel, Next Level Sports Center, Dome, and youth teams — told commissioners a local, dedicated sports facility would reduce travel costs for families, increase weekday economic activity and attract multi-day tournaments that support hotels, restaurants and retailers. Youth athletes also spoke, describing early starts and travel burdens and saying a nearby facility would reduce those hardships.

Commission discussion focused on the legal structure, geographic scope of the assessment district and protections for bondholders. Outside counsel Roxanne Steinhoff explained the Event Center Facilities Financing Act and noted the ordinance allows some future adjustments to the assessment district but also includes language to prevent changes that would impair outstanding bonds. Commissioners asked county administration and bond counsel to obtain a credit rating and updated cost/interest scenarios before final approvals.

The board took formal action on the first reading: Commissioner Wheeler moved, supported by Vice Chair Pro Tem (Kepler), that the ordinance be laid on the table as read and that notice of a public hearing be posted and published; the motion passed on voice vote. A second reading and final action will follow after the public hearing and additional financial analysis.

Community and county staff next steps identified in the meeting: continued detailed bond analysis with the county’s municipal advisor, final selection of a site (Discover said three sites remained under consideration), a hotel referendum (hotels in the district must ratify the assessment under the statute), and preparation of operating and management agreements should the district and bonds move forward.