photo by: Shawn Valverde

Renovation work is underway at David Booth Kansas Memorial Stadium on Wednesday, March 20, 2024.

A plan for KU to create a “Gateway District” around its refurbished football stadium may initially include fewer retailers, restaurants and other amenities than once envisioned, KU Chancellor Douglas Girod said Wednesday.

The reason: As KU’s football stadium at 11th and Mississippi streets has been coming down bit by bit, interest rates — the type charged by lenders — have been going up. The end result is that private developers whom KU is counting on to build and operate many of the amenities have become cautious about new projects.

“Some wanted to assume zero risk,” Girod told the Journal-World of developers who have expressed an interest in working with KU on the Gateway project. Girod said that meant developers were seeking a significant financial investment from KU in order to build the 50,000 square feet of retail and restaurant space, plus other amenities like office space, student housing and a small concert and entertainment arena that KU has envisioned for the area.

“Some of this is that people will build anything if you are willing to pay for it,” Girod said. “That is not the goal. The goal is to do something that’s going to be really value added to the community.”

Girod said he remains confident that KU will find a private partner to build and operate an approximately 175-room hotel that will be connected to the refurbished David Booth Kansas Memorial Stadium. Such a hotel is considered a critical component to a conference/convention center that KU currently is building as part of its $448 million refurbishing of the football stadium. The conference center, which is expected to have seating for 1,000 people, will be part of the north end of the stadium. Plans envision a hotel also being developed next to the conference center.

“I think there is no question we will get a hotel partner out of it,” Girod said of the current request for proposals that has drawn interest from three development firms, which the university has not yet publicly identified. “The question is what else we will get.”

Girod still believes restaurants, retail and other entertainment amenities ultimately will be part of a future Gateway district, but the higher interest rates and other changes to the economy may mean that those developments will happen later than once envisioned.

“I don’t think it is a matter of if,” Girod said of future development of retail, restaurants and other amenities for the Gateway District. “I think it is a matter of when.”

Girod said a delay in those amenities isn’t fatal for the Gateway project

“It is not terrible if it doesn’t happen all at once,” Girod said. “It lets you do it a little bit more organically. A need demonstrates itself with time.”

A delay also may give interest rates a chance to go down. Commercial projects now are routinely paying more than 8% for loans. Interest rates of 3% or 4% were more common when KU first started planning the Gateway project several years ago.

At one point, KU had hoped to have a private developer selected this month for the project. Now, KU expects a private developer to be selected sometime over the summer, KU chief financial officer Jeff DeWitt said.

That likely means a hotel wouldn’t be in operation until maybe one, but more likely, two years after KU completes its stadium renovation. The stadium is scheduled to be completed in August 2025. Demolition work has been underway since November, and DeWitt said erection of steel beams and other structures should begin in about two weeks.

An operator for the refurbished stadium — a company that oversees everything from day-to-day operations to providing services for the convention/conference center — likely will be selected in the next 30 to 60 days, DeWitt said. He said having that stadium operator in place will be helpful in discussions with potential hotel developers, as those hotel operators will want to know what company will be operating the stadium and conference center.

Girod said he thinks the investment KU is making in the stadium and the conference center will provide a good incentive for interested hotel developers. Girod said it was possible that KU also would be able to guarantee a hotel developer a certain number of room nights per year that would be booked by events hosted by the university.

However, Girod said there is a limit to what KU will be willing to offer.

“I don’t want to own a hotel,” Girod said. “I know that much. I don’t want to run a hotel either. That is not what we do. I want the pros to do that.”