Over the last two decades, we have seen some terrible stadium deals for local taxpayers. I mean, awful. But what is happening in Kansas City (well, Jackson County) is one of the first times that I can remember multiple city leaders publicly admitting to not knowing large parts of the agreement. Yet they are still pushing to finalize a deal where taxpayers give over $600M to the Kansas City Royals.
In April 2024, Jackson County residents “resoundingly voted against a sales tax extension” that would have raised $1.7B to fund a new Kansas City Royals ballpark and Kansas City Chiefs stadium. One of the biggest reasons for the result was the fact that the Royals simply ignored the public when coming up with the ballpark design/location and negotiating the finances of it. However, for the last few months, we have heard rumblings about the Royals negotiating with city officials behind closed doors about a new ballpark….again.
Then, this week, Kansas City officials passed Ordinance 260704 by an 11-2 vote. This project allows the Royals to build a $1.9B downtown ballpark that is expected to open in 2030. The city will hand over $600M to the overall $1.9 billion cost of the stadium. Of that $600M, $510M will be given as city-supported bonds. No election. No vote. As the Republic Monitor wrote in a story, Kansas City leaders did everything they could “to avoid a public vote on the city’s incentive package” for the Royals.
The rush on this deal is crazy irresponsible. Think about it like this…the City Council received the Royals proposed lease, non-relocation agreement, development agreement, community benefits agreement and funding agreement “less than 12 hours before Tuesday’s committee meeting.” This means that the public would have had just 48 hours to review the massive agreement before the 30-year deal was finalized. On top of this, the deal has changed several times behind the scenes. A month ago, the plan called for $500M in city funding and $410M that would be “repaid through stadium and area taxes.” It wasn’t until KSHB, a local news outlet, reported on city emails that the public learned the financial numbers being thrown around by the city and team were changing (from $600M to $500M, etc.).
However, when have correct numbers ever been that big of a deal? It isn’t like the city of Kansas City has been forced to pay $167M over the last 16 years from their general fund because the current Royals Ballpark District “has not earned enough revenue on its own to pay back the debt.” But current leaders in Kansas City have learned nothing and are just repeating the same mistakes. For example, the city is giving $600M because that is the city’s projections on what would be feasible. However, as Beacon News pointed out, a third-party financial analysis will not be seen by the public until after the agreements are signed and the city has legally committed to that number.
The Kansas City Stack did an amazing job going over the recently released documents about this deal. The amount of details left out of these documents is mind-boggling.
Here are just a few:
- The cost for land purchases and interest is minimized in the document. However, it does state that the total cost for land purchases and interest is $2,051,249,065. The Royals say they will provide $911,249,065. Well, that leaves $1,140,000,000 unaccounted for in the projections. I am guessing we are to assume that the city picks this up? Maybe.
- The $90M being put forward by the county for infrastructure will come from already existing funds. Anyone worried about the loss of $90M on current infrastructure around the city? Who cares if some bridge falls apart while cars are driving over it.
- Missouri was expected to provide $540M for this project. The document released shows Missouri giving just $439M from tax credits, infrastructure contributions and other places. What happened? No idea.
- $101M in the project will come from “other public sources.” What does that mean exactly? As the KC Stack wrote, “It could be Missouri. Or it could be from Jackson County. Or some combination. Or not. It isn’t clear.” I am sold.
- Kansas City is giving $600M. It will have $510M worth of debt to pay off. Where will this come from? Well, these documents give two revenue streams that would total $12.7M per year. The slight problem is that this amount of revenue is “not nearly enough to cover yearly payments on a $510 million dollar debt.” How did the documents deal with this issue? It didn’t. Hooray!
- Half of the city’s funding (or $710.3 million) is slated to be taken from a “stadium impact area.” What exactly does “stadium impact area” mean? No idea. The document never gives a definition for it. The Kansas City Business Journal calls it “vague…with unclear geographic and revenue boundaries.”
- Then we have $259M of city funds without any actual detail about what this means.
- This deal involves Hallmark Cards moving their headquarters to a nearby location. Except, that is pretty much where the facts end. Hallmark owns multiple pieces of land where the ballpark will now be located. Will Hallmark get TIF money at their new place of business? Who knows? As Dave Helling said at the KC Stack, “We’re not fully sure what the team and the city are buying, or Hallmark is selling, or what other entities may be involved.”
- I love this quote from Goldman Sachs…“debt financing is inherently subject to uncertainties and contingencies beyond our control; accordingly, there can be no assurance that any financing for the project can be accomplished.” Well hell, call me convinced!
The arguments by those politicians who support the deal are comical. Wes Rogers, the 2nd District councilman, claimed that giving the Royals this money was an “investment toward…putting Kansas City…in the big leagues.” He then claimed that this new ballpark will “activate downtown in a way that nothing else can.” He didn’t explain how this would possibly happen. Do we know how the ballpark or ballpark district’s Tax Increment Financing plan will look like? No. But so what? Have the proper applications been sent in by Missouri for this project? Who cares?
One city leader admitted that the agreement between the team and city has a number of “substitutes (meaning new language) within the plan that leaders had not yet reviewed.” What is the problem?
Thankfully, the city negotiated with the Royals that if the tax revenue from the new ballpark isn’t on par with the debt payments, the team will help fund the difference. Just kidding. The debt rests “solely with the city, not the Royals.” It is rare for a stadium TIF deal to create the revenue expected by deal supporters. In this situation, when the new ballpark fails to magically create the amount for the required debt payments, the city will be forced to go into their general fund “at the expense of services including police, fire, public transit and neighborhoods.”
The mayor of Kansas City continues to embarrass himself throughout this entire ordeal. He touted to the media that this deal getting done after many months of negotiations showed that city leaders “can walk and chew gum.” He forgot to mention that 100% of the negotiations happened behind closed doors and without any public input. Speaking of this clown mayor, when local media outlets asked why the vote for the new ballpark was delayed a week, he claimed that it was so that “the public could have more time to review the agreements.” When the local media submitted open-records requests to review these documents or emails, the city rejected all requests. The Kansas City Star is now reporting that the mayor is simply lying to everyone about the reason for the delay.
