Wednesday, March 28, 2012

If You Build It, They Will Come

Kansas City is a classic example of a modern Midwestern city that aspires to be oh so much more than it is.  Not content to remain a quaint little place with the nickname of "City of Fountains", they want to be a player. Like many of these urban 'wanna be's', it seeks to do so through massive infrastructure projects; hoping that by building them, something (or someone) will come.  All of these projects of course, come with a price tag, but what are such costs to a city attempting to make a name for itself.

Like many before them, KC encouraged the building of condos, and provided lavish property tax incentives in the hopes of luring young urban professionals to move downtown.  Unfortunately, they weren't smart enough to realize that they couldn't create real and sustainable neighborhoods if they couldn't force retailers necessary to creating such an atmosphere to move with them, providing everything from groceries to shoelaces (and they couldn't).  

Not dismayed by this apparent lack of urban planning success, someone in the city determined that their failure was merely one of scope and scale, and that to address this what they needed was a grander plan, including perhaps a shining glass bowl of a arena.  So they built the "Sprint Center" as a state-of-the-art facility with some private investment, but also over $200 million financed by the city through future hotel tax revenue.  When completed, they had indeed provided a superior downtown entertainment experience ... but unfortunately it sat empty most nights because the city had no professional sports franchise to anchor or support this rather pricey venue (and still doesn't) (As a side note, not having such an entertainment venue in use didn't help the hotel tax revenues much either.)

No matter.  If they couldn't get entertainment to come to the arena, they'd build some around it.  So the next thing you know, taxpayer money was being invested in what would come to be known as the "Power and Light District".  This area would provide shops, clubs, and restaurants that would bring people downtown when nothing was happening at the Sprint Center; and add to the entertainment value of downtown when there was.  Of course nothing in life's free, and like it's predecessor, entertainment venues can be rather expensive.  The Power and Light District was expected to be a investment development of some $850 million dollars.  The city however, found itself financing some $180 million of it in loans as part of the deal.

But as Nobel prize winning economist Paul Krugman will tell you, the only reason that government investment fails in its efforts to stimulate the economy is because they fail to spend enough, or double down every time that there's an opportunity.  Kansas City was listening.

A group of city officials is now scrambling to put together paperwork in time to meet the application deadline for a Federal DOT grant of $25 million for ... (wait for it) ... a downtown street car system.  Obviously the city needs a new specialized transportation system to allow the few people who got suckered into the downtown condos (and who are now broke on these pricey units with their mortgages upside down), along with those who aren't going to the Sprint Center (because there's no game going on), and those not going to the Power and Light District (because the venues aren't enough to attract enough people to make this a break even proposition) to get from point to point within a very limited area of downtown. 

Besides, if they can get the Federal funding (Which is free after all, having fallen off the federal money tree, right?) the city will then only have to finance another $75 million of a transportation system that will go into an area already serviced more than adequately by buses.  Of course tearing up streets to put in tracks will probably have a deleterious effect on the businesses that this system is designed to serve until it's completed, perhaps even bankrupting them in this already lousy economy; but when it's done, there will be a beautiful (at least for a while) system to serve the businesses that will no longer need it.

You know, looking back in history, we like to throw stones at the 'robber-barons' of last couple of centuries, but at least they didn't ask for government bailouts when things failed to pan out.  Oh sure, many of them, like their more modern counterparts, got their share of government subsidies (in land, if not in cash); but they ended up being some of the most generous people in this nation's history.  Sure they were 'evil capitalists and shameless profiteers', but a lot of their ill gotten gains later went into the building schools, libraries, museums, and theaters to promote education and the arts in projects that didn't cost the city a cent.

Say what you will about sports owners of the past: that they abused "The Reserve Clause", failed to pay players their fair market value, and waited far too long to allow African-Americans into professional sports; but at least they built their own stadiums.  They may have bought and sold player contracts like they were trading in the futures market, but they didn't ask fans and non-fans alike to risk municipal and state funds on monuments to their own egos.

Kansas City has I fear, become the rule rather than the exception with its machinations, and few such projects here or anywhere else would even be attempted these days without a federal grant, state assistance, and municipal bonds to offset actual costs that will inevitably reach 100% budget overruns (if you're lucky).

In the end, what do any of these cities have to show for such city largess.  The average stadium or dome is lucky to last 30 years without demolition and replacement, often long before the last of the debt is paid off. Kemper Arena for example, once the shining jewel of Kansas City, now sits on demolition row as planners seek a smaller, friendlier, and more intimate venue to replace it.  The fact that KC can't support two such arenas only points to how fickle our civic leaders can be when there's a shiny new toy to play with. The disrepair and shabby condition in which Kemper is currently kept only heralds its doom and reincarnation.

But in the end, neighborhoods will rise and fall on the fickle nature of real estate investors as they always have; and even tax incentives won't produce a viable neighborhood, only a speculative one.  Entertainment Districts will go in and out of fashion with the regularity of women's hemlines,  and the latest craze (or taxpayer-backed project) will be hyped as the next salvation of the city while the plywood gets nailed over the windows of its predecessor.  Current public servants meanwhile, will merely hope that no one will notice that the last one is far from paid off while touting the benefits of the next.  The newest arenas become old quickly, and less attractive to fickle sports team owners who want a better scoreboard, owner's box, or more clever naming rights.  Before we know it, Kansas City will soon find itself doing urban renewal on what now are its two great attractions.  

Spring training is all but over and the baseball season is upon us.  Soon the Royals (who along with the Chiefs, got $575 million in taxpayer-funded stadium upgrades) will once more be seeking a prize that has eluded them since 1985.  City officials will likewise be misguidedly hoping that their investment will in some way be paid off by those coming for this year's All Star game, hoping the notoriety will likewise make them a winner.  

As it often does every baseball season,  hope spring eternal that such winners will come their way (being a Cubs fan, I ought to know).  For city officials however, real hope will undoubtedly be saved for the next city financed project; a dream that it will be the one that finally brings them a winner and makes a name for Kansas City.  Well, surprise gentlemen: I've got a new one for you already.  I vote that we rename KC from the 'City of Fountains' to the 'Field of Dreams', for it's obvious that its leaders are overcome with the spirit of the Kevin Costner film, "if you build it, they will come".

(For my friends in Toledo chuckling at the pratfalls of my current place of residence.  Don't laugh too quickly.  Instead, take this as the cautionary tale it was meant to be.)

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