Kansas City plan to help fund Royals Crown Center ballpark heads to full city council
By Eric Graves
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KANSAS CITY, Missouri (KMBC) — A Kansas City committee on Tuesday advanced multiple ordinances concerning a financing plan for a new Royals stadium at Crown Center.
The first ordinance allows up to $560 million in revenue bonds for the stadium, team offices and supporting infrastructure.
All told, the city’s commitment could reach $600 million. That includes the bonds, $20 million previously approved from the city’s food and beverage tax, and another $20 million for road improvements.
The Royals would be responsible for at least $760 million in private funding and any cost overruns.
To help repay the bonds, Kansas City plans to use new tax revenue generated by the stadium and a larger “Stadium Impact Area” covering much of the Crossroads and parts of Midtown and the West Bottoms.
The Stadium Impact Area would capture incremental increases to public safety sales tax, parks sales tax, capital improvements sales tax, food, hotel, and utility tax.
That revenue would then be used to pay off the bonds used to pay for the city’s portion of the stadium.
Councilmember Johnathan Duncan worries about the long-term impacts this could have on city services.
“Those are now going into the baseball stadium,” Duncan said. “Rather than funding our public safety efforts. Same thing with our utility taxes. Those things are going to go into a baseball stadium, rather than going into our general revenue.”
Duncan is also skeptical that a baseball stadium in Crown Center can generate the kind of revenue needed in the surrounding impact area to pay off the bonds.
“We saw the impact of the NFL draft,” Duncan said. “We heard from restaurant owners who said, ‘We didn’t see that impact yet.’ They’re projecting that we’re going to see an increase in dining revenue based on downtown baseball. I just don’t see how the past practice price performance is going to inform this future practice.”
Mayor Quinton Lucas argues 81 nights of baseball a year should bring in more than 2 million new visitors to downtown that will spread their dollars across the area.
There will be a positive impact to the Power & Light District in areas north of our district,” Lucas said. “There will be a positive impact in Midtown. I think there will be a positive impact on the East side areas that are not in the same capture district.”
As for long-term impacts to city services, Lucas acknowledges that that establishing a baseline to collect incremental increases in tax revenues can’t account for inflation.
“Obviously, today the cost of different services increase over time,” Lucas said. “So it is fair to suggest that there can be an impact long term. But that’s why we tried to be as narrow and pinpointed to just a district of the city, as well.”
On Tuesday, the finance committee also heard from two representatives of Hunden Partners. The city paid Hunden Partners to study how much tax revenue they could expect to be generated in and around a new Royals ballpark.
The study estimates the stadium, impact area, and other revenue sources could generate roughly $1.4 billion over 30 years to support the project.
City staff said Tuesday that internal numbers suggest it will cost the city $1.393 billion to pay off the bonds.
Those numbers are projections, not guarantees.
Some economists criticize reported projections like these. Mayor Quinton Lucas said the Hunden Report lines up with city staff’s own predicted economic impact numbers.
“I think what you saw was a model that pays off, certainly, all of our debt, and we would say looks to help fund and rebuild downtown long term,” Lucas said. “There will be a positive impact to the power and light district in areas north of our district. There will be a positive impact in Midtown. I think there will be a positive impact on the East side areas that are not in the same capture district and where I think you will see increasing revenues.”
Duncan is still skeptical. He said he’s not sure if it’s a good deal for Kansas City. He called the Hunden Report “hired guns.”
“I think at the end of the day, what we’re seeing is vibes, right,” Duncan said. “The mayor provided a great pitch about why downtown baseball is a great opportunity. I won’t disagree that downtown baseball is a great opportunity, but we are executives of this corporation, and it’s our responsibility to know the details of what we’re actually pitching, what we are putting on the line, which is our general fund.”
Also on Tuesday, the finance committee amended the Stadium Impact Area not to include any of Kansas City’s third district. This excludes a previous swath of the area on the east side.
“Part of the reason I think that we made that amendment was to say, ‘Let’s actually try to make sure that we’re building more business there, rather than redirecting what might be long-term growth in that area,” Lucas said.
If the stadium impact area were to be expanded to make up for the less of the portion of the 3rd city council district, Lucas said that plan would have to come back to the city council for full approval.
Duncan believes this is another reason this ballpark plan should be slowed down.
“We don’t actually know what the impact zone’s going to be,” Duncan said. “I think that’s an important detail that this council should have before we actually move these things forward. We don’t have those details, so I can’t tell you if it’s a good deal or not.”
Royals President of Real Estate and Development Brooks Sherman, along with several other team representatives, were at the finance committee meeting. Afterward, a Royals spokesperson shared this statement.
“We are grateful to the Finance Committee for their support in another important step in our partnership with the City and Hallmark. We are appreciative of Mayor Lucas’ purposeful passion, and for the outstanding work and support from City Manager Mario Vasquez and his team.
“Our shared goal is to create a transformative project that brings both the Royals and Major League Baseball to the heart of Kansas City, lifting our community for generations to come. Enthusiasm from virtually every corner of the community has enabled us to move this project forward with a bigger vision than any one of us could have achieved on our own.
“We look forward to the important next steps ahead, and pledge to share updates as two crowns converge downtown.”
Royals Chairman and CEO John Sherman said on Monday the team wants the new stadium ready for opening day in 2030.
He also plans an additional $1 billion in private investment for a mixed-use entertainment district around the ballpark.
“I think we’ve said that the stadium is $1.9 billion for the stadium, our offices, and infrastructure,” Sherman said. “We plan to invest another $1 billion in phase one, and that will be for – we’re actually working on our master plan right now, but that’ll be kind of certainly retail and entertainment and other things.”
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