In September of last year, ground broke on the Kalamazoo Event Center — a new arena being built in downtown Kalamazoo with a whopping $515 million dollar price tag.
Kalamazoo resident Julie Kelemen had been hearing a lot of talk about the cost and wrote into Why’s That with a question: What really is the most expensive building ever built in Kalamazoo?
“I was seeing in online local discussions and hearing on the radio and sometimes seeing on television people complaining that the new downtown arena is the most expensive building ever built in Kalamazoo history. And I thought — 'Well, yeah, if you don't count inflation,'" Kelemen said.
Costly buildings of Kalamazoo
To compare costs, Ryan Gage and Keith Howard of the Kalamazoo Public Library’s local history room compiled a list of some of the city's most expensive buildings of their time.
“The one building that kind of leapt out at us as we were doing the research was the American National Bank building, which for today's audience would know that building by the Fifth Third Bank moniker. And that was built in 1929 on the eve of the Great Depression,” Gage said.
He said that building cost around $24 million when you adjust for inflation — pricey, but less than five percent of the projected cost of the arena. The closest to the arena was Bronson Methodist Hospital at a cost of over $340 million in today’s dollars.
“The building projects — it’s just not a compare, contrast. It’s not really even. The arena is way ahead of anything that we could find at least historically that would be comparable," Gage said.
He said older buildings used materials like brick, stone and wood, while modern buildings use more expensive materials like steel that also require more specialized skills like welding. And when comparing other buildings to the Kalamazoo Event Center, those details matter. The projected $515 million cost isn’t just for the structure itself; it includes modern plumbing and wiring and even interior design features like screens and sound systems.
"Maybe a few decades more recent would be the Kalamazoo Center or the, what's now known as the Radisson Hotel. That was built, opened in 1975 at a cost of then $15 million, which translated to today's dollars would be a little over $90 million," Howard said.
And that building was a huge project for its time — but still only a fraction of the cost of the arena.
Gage and Howard said there are other factors that can impact the value of older buildings.
“A lot of historical buildings were added onto or modified over time, whether they were school buildings that needed to accommodate for more students or commercial buildings were often added onto. And certainly the cost, the original cost would definitely shift over time," Gage said.
But details on those costs were hard for them to find.
Building cost vs. value
The numbers we’ve been talking about so far were just building costs adjusted for inflation. But determining the true value of a building goes far beyond just the cost of building it.
In search of the bigger picture, we sat down with Assistant Professor of Economics, Rodrigo Aranda at Western Michigan University. Aranda said in fact, the building costs are only one small part of the total value.
“Something that you would have to take into account to make the decision of how much it’s valuated is not only the building itself, the land, but it’s also the revenue it gets,” Aranda said.
In addition to the land costs and money it brings in, Aranda said other factors that can impact value are renovations that aren’t included in original building costs, how much value a building adds to the community, and any value that has been lost over the years due to damage, aging or other factors.
“If you were to value an older building, it’s the depreciation of the building," Aranda said.
Those are just some of the things that can impact value – and on top of all of this, you also have to evaluate what’s inside the building.
Take our earlier example, Bronson Hospital. The building costs adjusted for inflation are $340 million. Then, add in the price of everything inside Bronson — from all of the expensive medical equipment like CT scanners, MRIs and surgical robots to the technology infrastructure and even the decorations inside patient rooms. Now, you’ve got a way bigger number than $340 million, and that doesn’t even include land costs, revenue, community value, depreciation, et cetera.
So, is the arena the most expensive building in Kalamazoo?
The short answer is that no other city of Kalamazoo building seems to match the Kalamazoo Event Center’s $515 million price tag on building costs alone. But when you factor in all of the things that add to a building’s value, it’s possible there are several buildings in Kalamazoo that are equally or more valuable than the event center.
We circled back with Julie to hear what she thought of our not-so-black-and-white answer to her question.
“For me, it's helpful to know even though it's complicated, it's not a yes-or-no answer. That's okay. You know, life is not yes-or-no in black and white all the time, especially when it comes to controversial subjects,” Kelemen said.
Tell us what in Southwest Michigan makes you curious here.
