Star file photo
The Power & Light District didn’t create new economic activity. It just cannibalized it from elsewhere in the city.
Kansas City makes a lot of big bets with our money. But as anyone who’s been to the riverboats knows, it’s not how much you bet – it’s how much you take home.
As leaders try to make the sale for a new downtown stadium, it’s fair to ask: How have past bets paid off?
As it turns out — not good.
Downtown’s biggest bet is the Power & Light District. Former Mayor Kay Barnes and the City Council agreed to return property, sales and income taxes from the district to the developer, paying the debt on the loans they took out to build the development. When that isn’t enough — and it hasn’t been enough in all but one of the 16 years since the place opened — taxpayers make up the rest.
So far, that’s cost us more than $170 million.
The district didn’t add new jobs or businesses in Kansas City. According to the city itself, the number of liquor licenses and employee cards for restaurant workers remained flat citywide for years after the project opened. It didn’t create new economic activity. It just cannibalized it, taking it from elsewhere in the city to downtown.
Maybe it was worthwhile to redirect business downtown. But claiming any economic benefit is wrong. Some may argue, “At least it spurred other development!” Nope. Every project downtown — from H&R Block to the many hotels — cut similar sweetheart deals.
The city went all in, and developers took the pot.
Years later, Mayor Sly James and the council bowed and scraped to offer Cerner Corporation what was at the time the largest package of state and local subsidies in the history of the state: $1.6 billion worth of giveaways and tax credits. Cerner promised to revitalize the former site of Bannister Mall, create thousands of new jobs and contribute millions to the local school district.
Taxpayers delivered, but Cerner failed on every promise. There were few if any new jobs and no new economic activity. The school district has received only a small fraction of its promised funds and is bulldozing classrooms because it doesn’t have the money to maintain them.
Like a hick tourist suckered in a street corner three-card monte game, the city thought it looked easy and got taken.
There’s always the next big bet. And the prospect of a new stadium in the downtown area has leaders itching to wager again with your money.
Taxpayers are being asked to approve a new 40-year sales tax, replacing the current shorter-term tax, because Royals owner John Sherman wants a new stadium. That tax is in addition to the abatements, tax credits and financing they will seek (and likely get) from Mayor Quinton Lucas, the City Council and agencies such as PortKC, whose sole reason for existence is to give away tax money.
Oh, and Sherman also wants to add retail and commercial space to the stadium to make the development more profitable. That’s great for him but only strengthens the case that public funds aren’t necessary.
And by the way, the overwhelming majority of research on publicly-funded stadiums indicates that they do not generate enough economic activity to be worth the public investment. Kansas City’s effort wouldn’t be any different. Sherman says the new deal will include all sorts of community benefits. Just like Cerner’s deal did.
Cerner’s deal didn’t include much to hold them accountable. Even some south Kansas City leaders who supported it admit more transparency and accountability was necessary.
Yet the measure before voters on April 2 is somehow even worse. There are no details. Important commitments haven’t been spelled out, and the Royals and Chiefs haven’t even signed lease extensions.
The city is doubling down — without seeing any of the dealer’s cards.
The best bet for Kansas City? John Sherman should run his business on his own dime. And the Royals and Chiefs should pay their taxes. All of them.
Patrick Tuohey is co-founder of Better Cities Project, a 501(c)(3) nonprofit focused on municipal policy solutions, and a senior fellow at the Show-Me Institute, a 501(c)(3) nonprofit dedicated to Missouri state policy work.