Meet Mike Smith, who's now going to convince you to hand over half a billion dollars for your stadiums.

The Big Sell 

Meet Mike Smith, who's now going to convince you to hand over half a billion dollars for your stadiums.

It's two days before the start of the NFL's regular season, and Chiefs fans have gathered to help kick it off.

The 12th Annual Red Friday Football Luncheon takes place inside the Pavilion, a domed banquet hall next to Arrowhead Stadium. After filling their plates from the buffet line, more than 400 red-wearing attendees take their seats. At one table, a guy wearing a Joe Montana jersey looks up from his chicken and asks his fellow diners about the difference between this luncheon, which cost $40 a plate for the general public, and the Annual Chiefs Kickoff Luncheon a few days earlier at the Hyatt Regency.

"The Kickoff Luncheon, the players come," answers a woman in her forties, her eyes widening as if she has caught sight of studly tight end Tony Gonzalez approaching her with a smile.

The woman's shirt identifies her as a member of the Red Coaters, an organization of Chiefs lovers who have formally pledged to show their enthusiasm for the team.

Another woman at the table is scanning the room for team dignitaries. She spots President and General Manager Carl Peterson standing in the back of the room.

"He's got a dago face," she says, nudging the woman seated next to her. "Tell me that's not a dago face."

As meals are consumed and ethnicities debated impolitely, Peterson finds his way to the stage for a panel discussion, the luncheon's main event. Appearing with him are former players Len Dawson and Curtis McClintock, and Clark Hunt, the son of team founder Lamar Hunt.

The younger Hunt uses the luncheon to promote an idea that fans and nonfans alike are going to hear about often in the next six months: the need for extensive renovations at Arrowhead.

For much of its history, the NFL has operated as a textbook model of socialism, with team owners more or less sharing the league's vast wealth. But, Hunt tells these fans, new stadiums in Washington, D.C., Philadelphia and New England "have really allowed those teams to jump ahead."

The Chiefs want the same spiffy suites and endless concession stands enjoyed by their rivals who play in modern stadiums. The Royals also want improvements to their home across the parking lot. And the teams want the public to pay for most of the work.

Among Chiefs lovers, worry is beginning to set in. A fan rises to ask Hunt a question: "Are the Chiefs going to stay in Kansas City?"

That's a half-billion-dollar question.

The lunchers at the Arrowhead Pavilion will do anything to keep their team in town.

But the task of convincing their more skeptical Jackson County neighbors has been taken up by Mike Smith, an insurance agent who is the chairman of the Jackson County Sports Authority. The Sports Authority manages Arrowhead and Kauffman stadiums; though Jackson County actually owns the stadiums, the Sports Authority exists as a means to operate the facilities free of politics (in theory, anyway).

So Mike Smith is technically the teams' landlord. Fortunately for his tenants, he's also a great salesman.

Public officials have already started trying to rally the public's support for stadium renovations. The plan is to hold an April election asking Jackson County voters to increase their sales tax to pay for improvements. Although no one has decided on the exact numbers, a likely scenario involves the public contributing $450 million.

Without a new revenue source, the Sports Authority, which receives funding from the county, the city of Kansas City, and the state of Missouri, will be unable to pay for scheduled improvements, causing it to default on the teams' leases. The clubs would be free to leave Kansas City after their 2007 seasons.

Negotiations between the clubs and representatives of the county and the Sports Authority are scheduled to begin to later this month, and signs point to a deal that meets most, if not all, of the teams' demands.

"If you look around the United States, when sports teams are talking to the government, it's not negotiations — it's dictation," says Jackson County Legislator Fred Arbanas, who was a Chiefs tight end in the 1960s. "They tell you what they want, and you better come across with it, as far as I'm concerned."

On September 6, Smith has to work a crowd significantly tougher than the Red Coaters.

He's the speaker at a meeting of the Pachyderm Club, two dozen or so Republicans who meet every Tuesday in a side room at Fiorella's Jack Stack Barbecue in the Freight House. A typical event consists of a buffet lunch and a guest speaker, usually a public official who shares their appreciation for the red-state life.

Smith is wearing a white dress shirt and tan slacks. He's a commanding presence at 6 feet 2 inches tall; five-day-a-week gym workouts have allowed him to drop 40 pounds in the past six months.

The Sports Authority is at its most critical point since the stadiums were built, he says.

"We are on the verge of losing two teams," he says.

Smith says he doesn't like the idea of hitting up taxpayers for money — "around $400 million," he says — but there's little choice when other cities may be willing to build new stadiums to lure the teams. "We have to play based on those rules."

Owners of sports teams have been called blackmailers for threatening to move in order to get concessions from their cities. Smith, however, calls Carl Peterson "a prince" and says Lamar Hunt and Royals owner David Glass are "good men" to deal with.

The Pachyderms aren't pushovers. Smith is a fellow Republican, but he's also advocating a tax increase — words hated by most in attendance.

During the question-and-answer period, a lawyer named Dennis Owens disputes Smith's assertion that the teams are vital to the local economy. Owens says he can name 60 obscure employers that benefit the region more than the Chiefs. "Forget trying to justify the economics," Owens says.

"That's your opinion," Smith says. "Now you're going to get my opinion."

Kansas City risks becoming Wichita if it loses its major-league sports teams, Smith says.

Bill Phelps, former Missouri lieutenant governor, asks about the possibility of using personal seat licenses (PSLs) to pay for upgrades. PSLs are essentially a one-time charge on season-ticket holders.

Smith shakes off the idea. Such a measure would generate only $3.9 million, he says.

Phelps questions that figure. "I think the ones in Houston generated about $100 million," he replies.

Phelps' number is closer. Private sources contributed $115 million toward the construction of Reliant Stadium, home of the NFL's Houston Texans. The team paid $50 million from the sale of PSLs; various rents and surcharges covered $65 million in taxable bonds.

Though the questions have been tough, the luncheon ends with friendly handshakes and pats on the back. A few days later, at his insurance office in Lee's Summit, Smith says the Pachyderm engagement felt as if someone had handed an audience member a loaded gun and said, "Shoot!"

His fellow Republicans challenged his beliefs, but his convictions remain unshaken. "He's crazy," Smith says of Owens' remarks.

One-on-one, Smith emphasizes his points with taps on the arm and swings of a bat of rolled-up paper. Like a lot of effective promoters, he has a tendency to disregard certain facts that stand in the way of his closing a deal.

But serious questions about stadium economics can't be easily dismissed. For example, a 2000 study by University of Maryland professors suggests that pro sports act more like drains than engines for local economies. Most independent analyses reach a similar conclusion.

Smith looks briefly at the Maryland study.

Sure, he'll concede a few points. But, he says, "I disagree with what some of this says." He's speaking loudly, which seems to be his usual volume. "I deal with real people every day. I deal with people who save money. Forty-three hundred customers here. We deal with them. And we talk to them. And they'll tell you, 'We don't take a vacation so we can [save up to] go to the ballgame.'" Studies don't measure that kind of economic activity, he says.

"It's fun, talking to guys like you, arguing. I like to debate, if you haven't noticed. I have no problem debating. I like to try to sell."

Smith, 41, grew up in Lee's Summit, where his family roots run deep. His grandfather attended Lee's Summit High School, and the grandparents of his wife, Tonya, taught in the district.

In high school, Smith played tackle on the football team, but those days ended prematurely when he tore his rotator cuff during the second game of his senior season.

Smith didn't go to college, but he owned a bar near one. Barely out of his teens, Smith briefly ran Bahama Mama's in Warrensburg, home of Central Missouri State University. On the first of every month, he would pay a visit to students who had run tabs, picking up the checks their parents had sent them. He'd cash them, pay himself, and then return whatever money was left. "Watching college kids was fun," he says.

Smith eventually married (he and Tonya had dated in high school) and gave up the bar business to concentrate on selling insurance.

He and his father, John, put up $2,000 apiece and started Twin Lakes Insurance Agency. Smith remembers sitting at his father's kitchen table, begging him to join the enterprise. Smith says that at one point in the discussion, his father, who served two terms on the Lee's Summit City Council, threw a phone at him.

"You've got to understand our tempers," Smith says. "We're high-strung, high-tempered people. I can't tell you how many times I've run down the hallway [of the Twin Lakes office] with shit getting thrown at me."

Insurance is only one of Smith's businesses. He and some partners also want to build City Walk, a huge retail and entertainment district near U.S. 50 and Missouri 291 highways.

Borrowing elements from Zona Rosa and other City Walk will rely heavily on government incentives. The project is expected to cost $469 million, and Smith and his partners want to capture $232 million in tax breaks. Smith hopes that City Walk will do for Lee's Summit what Village West did for Wyandotte County. "It changes Lee's Summit to a regional base city," he says.

Smith refers to himself as a "country boy," and his lack of a formal education makes his business success all the sweeter. He says he hates it when someone says there's something he can't do. "When you look at me and say, 'You can't,' that's like a dare. A double-dog dare at that."

He is a second-generation Republican. His grandmother, he says, felt "there was no prettier man in the world than Bill Clinton, the silver-tongued devil." But like his father, Smith came to believe that a man who runs a business is a man who votes Republican.

Smith's interest in politics eventually earned him the Sports Authority appointment. He donated to Bill Kenney's campaigns when the former Chiefs quarterback represented eastern Jackson County in the state Senate from 1994 to 2002. Smith says Kenney was the one who approached him about serving on the authority, which he has done since 2002.

When state lawmakers created the authority, they ostensibly designed it to resist party politics. Terms last five years. New members are appointed by the governor, who chooses from a list submitted by the county Legislature. No more than three members can belong to the same political party.

Yet over the years, Jackson County legislators have argued with one another and the county executive over new nominations. Governors have been known to dawdle over appointments.

Why the fuss? An appointment is a sweet plum, for one reason.

At Chiefs games, authority members park in marked spots just outside Arrowhead's Gate F. They and their guests watch the action from a suite on the 25-yard line. Photographs of past authority members hang from the suite's walls like mayoral portraits in a small-town city hall.

It's a high level of reverence for what is really a group of glad-handing functionaries.

Over the years, a wide range of people have enjoyed appointments to the authority. The late Mormon bishop G. Leslie De Lapp was a member in the 1960s and '70s. John Bondon, the wild-haired proprietor of the now-shuttered Italian Gardens, was a chairman. Another former chairman, lawyer Clinton Adams Jr., supported what was reported to be a $750-a-week cocaine habit during his mid-1980s tenure. (Adams was later disbarred for mishandling client money and lying to investigators. He sought treatment, and his law license was reinstated in 1993.)

Smith is a typical Sports Authority member in that he's an amiable guy and a campaign donor. His tie to Kenney, a former Chief, is not unusual. Tom Condon, the offensive guard-turned-sports agent, sat on the authority after his playing days ended in 1984. Georgia Buchanan, the widow of Hall of Fame defensive tackle Buck Buchanan, is on the authority today.

And though the Sports Authority serves as the Chiefs' and the Royals' landlord, it has always had a cozy relationship with its tenants. Back in 1968, before the stadiums were even built, the authority hired lawyer Irvin Fane to negotiate leases with the teams.

Fane was also working for Royals owner Ewing Kauffman, providing him with legal advice on incorporating his new baseball club.

Fane's obvious conflict of interest would not be the lowest point in the 40-year history of the Sports Authority.

In the early years, stadium upkeep was largely the responsibility of the Chiefs and Royals, who also paid rent. But the teams complained, so in 1990, county officials reached new agreements with them. The agreements made promises the authority can't keep.

The 1990 leases favor the teams. Under the old agreement, the Chiefs and the Royals paid rent that eventually allowed the Sports Authority to amass a surplus of $17 million. But the 1990 agreement reversed the flow. Today, the Chiefs and the Royals collect "management fees" in excess of their rents, and any repair bill over $250 is sent to the authority.

The leases also include a master plan for each stadium. The master plans are vague and extensive — a dangerous combination. A simple line item to "replace stadium seating," for example, ended up costing $14.5 million over four years.

Deadlines loom for other jobs for which the authority lacks the means to pay.

The blame for the disastrous leases falls mainly on former Jackson County Executive Bill Waris, the principal negotiator of the deals. A kind view of Waris' work takes into account the uncertain state of the Royals. (At the time, Kauffman's partner, Avron Fogelman, was teetering on the edge of bankruptcy. Signing the teams to new leases was seen as a way to keep the Royals out of the hands of auctioneers.)

Waris was also facing an election in 1990 and looking for an achievement to brag about. Alas, reaching new deals with the teams did not help his candidacy; Marsha Murphy trounced him in the Democratic primary.

But Waris continues to cause trouble.

After losing elected office, Waris worked as a lobbyist for various public entities. He was receiving $56,000 a year from Jackson County when he was indicted in November 2004 on charges of lying and obstructing justice. Waris pleaded guilty in July to lying to federal agents; an FBI agent has stated in court that his agency was investigating County Executive Katheryn Shields on suspicion of bribery ("Katheryn the Grate," April 4).

The investigation centered on an appointment to the Sports Authority.

According to grand jury testimony, Shields offered a woman named Cathy Nugent a $12,000 contract to do some fund-raising for the county's Fort Osage Historical Society. Investigators are trying to determine whether Nugent's offer constituted a bribe. When the contract offer was made, Shields reportedly asked Nugent to make sure that her husband, Dan, withdrew his name from consideration for a seat on the authority.

Instead of Dan Nugent, Shields wanted to give the seat to former Kansas City Mayor Richard Berkley, who accepted an appointment in the fall of 2003. Shields, the Pitch reported in April, was looking for a more distinguished figure than Bondon to serve as the authority's chairman during the Bistate II campaign. Bistate II, the regional sales-tax issue that failed last November, would have provided $360 million for stadium upgrades; in exchange for the work, the teams had agreed to sign new 25-year leases.

So Shields was unable to fix Waris' mistake. She also lost her influence over the Sports Authority.

Until recently, the authority had a habit of hiring Shields' supporters. Jim Shaffer, the authority's attorney, and Jack Holland, its financial adviser, have been campaign contributors.

But the authority became a less hospitable place for Shields and her friends when Berkley resigned in March, citing concern for his wife's health.

Berkley's departure paved the way for Smith, the authority's most senior member, to assume the chairmanship.

No fan of Shields, Smith quickly put his stamp on the organization. He got rid of Shaffer and hired the law firm White Goss March Schulte & Weisenfels. White Goss partner Mike White sits next to Smith during authority meetings and has assumed some of the executive duties performed previously by Mike McCormick, a consultant whose contract the authority canceled. (McCormick is contesting his termination in a lawsuit.) Holland, whom the authority had been paying $4,000 a month, is now receiving a $5,000 monthly stipend directly from the county.

Smith says he offered change. "What we're trying to do now is run that thing like, truly, guys run businesses, not like you run a public body and just blow money," he says.

As a result, Smith says, he earned the wrath of Shields and some Jackson County legislators. "They hate me because I'm trying to run it like a business. They're trying to help their friends."

But it would be a mistake to declare Smith a reformer.

For one, he's the beneficiary of blatant political patronage.

Smith, his relatives and his businesses gave $10,000 in contributions to Matt Blunt in the 2004 governor's race. Once elected, Blunt rewarded Smith with a profitable vehicle-license bureau to run (as he did for several other campaign contributors).

Blunt also extended Smith's appointment to the Sports Authority until 2010. And there are hints that Republicans have their own plans for the organization.

Earlier this year, Smith and team officials went to Jefferson City in an effort to increase the amount of state funding that goes to the Sports Authority ($3 million in 2005). The Senate endorsed their idea, passing a proposal to divert a portion of taxes paid by visiting athletes and entertainers. To get the bill through the House, the Sports Authority hired lobbyist Jewell Patek.

Patek is a former state representative who left office to work for Sam Graves after Graves' 2000 election to the U.S. Congress. He counts notorious Republican operative Jeff Roe as a buddy. As campaign manager for Graves and other Republicans, Roe has been accused of intimidation and dirty tricks ("Goon Squad," May 13, 2004).

The Sports Authority paid Patek $5,000 for his work, according to The Kansas City Star. He would have received another $7,500 if the athletes-and-entertainers bill passed, but it died in the House. Yet Patek may have another crack at his bonus.

Smith says he thinks a similar proposal will do better in a future legislative session, where lobbyists working for the Sports Authority will fall like rain. "I won't hire just one," Smith says. "We'll put 10, 12 of them down there. Makes sense. If I'm going to win, I'm going to win." The hiring spree should benefit lobbyists who identify themselves as Republicans. Patek's arrival effectively benched the less ideological lobbyists who had been working for the Sports Authority.

In one sense, the lobbying has begun already. State Rep. Brad Lager, a Maryville Republican and Chiefs season-ticket holder, visited the Sports Authority's suite at the Jets game on September 11.

Lager is another Roe-Graves ally. A political action committee that Graves funds with his excess campaign contributions paid Lager $20,000 last year for "fund-raising."

Roe, meanwhile, is helping Smith win approval of his City Walk project.

Roe handed out "I Support City Walk" buttons at a September 13 Lee's Summit Planning Commission meeting. (The commission approved Smith's City Walk plan two weeks later.) It was a small role to play for such a powerful figure in western Missouri politics. Smith downplays Roe's involvement, saying he's just working on a mailer. "He's doing it more out of friendship, you know what I'm saying?"

City Walk has raised other questions; the Star has hammered on the idea that it represents a conflict of interest for Smith. That's because City Walk's plans include a minor-league ballpark — a lower-cost alternative to the Royals. Critics have also argued that City Walk's location, 14 miles from the stadiums, may also reduce the potential for future retail and entertainment developments in and around the Sports Complex. (Developing the Sports Complex has been discussed as way to fund improvements, though no credible plan has been put forward in 40 years.)

City Walk and the Sports Complex are not competitors, Smith tells the Pitch. He does not see a Frontier League team as a threat to the Royals. "If people want to see the Yankees, they'll go to Kauffman," he says.

As for future development at the Sports Complex, Smith says City Walk is not attracting the kind of tenant that would want to be near Arrowhead. "You're not going to put a Linens 'n Things at the stadium," he says.

At Smith's request, the Missouri Ethics Commission examined the issue and concluded that no conflict existed. But the ruling didn't satisfy the Star's Yael Abouhalkah, Smith's loudest critic. In an unsigned editorial published after the Ethics Commission issued its opinion, Abouhalkah declared the matter unresolved.

Smith tells the Pitch he won't return any more of Abouhalkah's calls. "[Abouhalkah is] an unreasonable, unrationable [sic] person to deal with, and I'm moving on," he says.

He has sales to make.

New leases with the teams, which will determine the size of the sales tax on the ballot next April, will be negotiated by representatives from the county and from the Sports Authority.

Lawyer Mike White will speak for the Sports Authority. Representing the county will be financial adviser Jack Holland and attorneys from the law firm Lathrop & Gage.

"Everything's on the table," Holland tells the Pitch.

But the negotiations are off to a strange start. Lathrop & Gage attorney Thomas Stewart made the front page of the Star when he described an idea to treat the teams unequally, spending $300 million on Arrowhead and just $40 million on Kauffman. "We will take a risk that the Royals are not going to move," he said.

County officials tried to distance themselves from Stewart's comment. But in recent weeks Smith, too, has hinted at a plan that would send more assistance to Arrowhead than to Kauffman. One reason is that the Chiefs are in a better position to leave for greener pastures.

"Don't think they're not already talking to people," Smith told the Pitch last winter. "Don't think that cities haven't already sent pro formas to tell them what they would do for them. If I was Clark [Hunt], I would have to really look pretty strong at somebody sending me a brand-new stadium."

Smith often sounds as if he represents the teams instead of the public. He can rattle off the names of cities that have lost their NFL franchises. He describes how Kansas City's relatively small size forces taxpayers to assume a greater share of the construction burden. (Bistate II would have required the teams to contribute 15 percent to 20 percent of the total construction costs, which is low compared to stadium deals elsewhere.)

Smith's claim that he's taking a hard line — insisting that taxpayer dollars won't be used to finish suites and other areas closed to regular fans — is dubious.

The teams won't get one dollar of any new public subsidy, Smith likes to say.

Not directly, anyway. But overhauling the stadiums' concrete shells, which the public pays for in most proposals, would make it possible to build new suites and club areas.

Still, Smith has talked about hiring a real academic, not some propaganda outfit, to collect information about the teams' economic impact.

Even with trustworthy data, convincing voters to pass a stadium tax won't be easy.

Thousands of Missourians will lose their Medicaid benefits this year. Residents know that stadium taxes won't be used for schools or for sewers but to provide multimillionaires with grander playgrounds.

Last week, Smith and county legislators held a forum at the Bluford Public Library at 31st Street and Prospect. The event had two purposes: to give members of the public a chance to express their opinions, and to give legislators the chance to say they sought the public's opinion.

The crowd was mostly African-American and mostly opposed to a stadium tax. The people who rose to speak described feeling forgotten by the community in general and by the teams in particular. Minority hiring was also an issue. Former county Legislator Carol Coe noted the lack of minorities working at the H&R Block headquarters construction site. She complained that there aren't even enough minorities in the low-paying positions at the Sports Complex. "We can at least sell tickets," she offered.

Seated with five legislators, Smith proved to be the most responsive public official in the room.

Loudly, Smith said he had ended a short vacation (in Las Vegas) so he could be at the meeting. At one point, he skillfully rejected a suggestion to sell the stadiums to the teams by comparing them to 35-year-old cars that no one would want to buy. "The stadiums are worn-out," he said. "They're shot."

Smith even acknowledged Coe's concerns about minority hiring. "I'm going to work on it," he said. "That's the best I can do."

As he pledged his best effort, Coe sat in her chair and nodded her head in approval. Even though it was obvious that Smith wasn't going to win many votes for a future stadium tax in this room, he appeared to receive high marks for sincerity.

He's even won over some Democrats. County Legislator Arbanas thinks Smith is the right man to look out for the interests of Jackson County residents. "Mike is an aggressive guy. I think he's a straight and honest guy. We're of different political parties, and I see him as a positive influence that can really help this drive."

In football, a drive takes an offense down the field. But voters may end up wishing Smith knew how to play defense, too.


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