News The Power & White District is doing good - Page 8

Titty Meat · 07-18-2010, 01:05 PM

http://www.kansascity.com/2010/07/13...-need-big.html

Power & Light District will need big subsidies from city
By KEVIN COLLISON
The Kansas City Star

KEITH MYERS | The Kansas City Star
The Power & Light District, where restaurants were busy on Tuesday evening, is still viewed by city leaders as a long-term benefit to downtown despite Tuesday’s news.
More News
In a tangled TV market, it’s hard for rivals to uproot established cable providers Tom Bloch to leave H&R Block's board in September Facing ire of critics, Apple offers free protective case for new iPhone Online auction sells recovered items from police departments Neurosurgeons consider hospital shift Focus on business retention grows Consumer gloom weighs on markets; Dow drops 261 Insider trading | Jack Henry & Associates Business briefs: Earnings reports from Citigroup, Gannett and others Mismatch in the job market Goldman Sachs agrees to $550 million settlement Revenue at KC area casinos trails last year’s pace Jobs and consumer confidence slump while corporate profits grow Best of the blogs Cityscape | Bistro in KC to test chain’s new happy hour items Ways to save as you head off to college Missouri, Kansas see increased foreclosure activity Flash forward | The week ahead in business Anticipation of Goldman Sachs settlement turns stocks around Starwatch consumer | Children’s tents recalled In a major shift from its original financing plan, Kansas City officials now project that the Power & Light District will require a long-term $10 million to $15 million annual cash subsidy.

When the city in 2006 approved issuing $295 million in bonds for the downtown entertainment project, it was conceived as a self-sustaining venture. But a delayed opening, the economic downturn and higher-than-expected borrowing costs have meant that so far it has not generated enough revenue to cover debt payments.

“It will probably never fully cover itself,” acting City Manager Troy Schulte told The Kansas City Star in an interview. “We’ve built into all of our long-term projections the assumption of a $10 million to $15 million annual debt subsidy.”

Given Schulte’s estimate, to subsidize the district, developed by the Cordish Co. of Baltimore, city taxpayers would have to shell out at least an extra $230 million by the time the bonds are due in 2033.

Schulte said the subsidy would be built into future budgets, and he and City Councilwoman Deb Hermann said the project, which replaced acres of urban blight, was still a good investment for downtown.

The chief architects of the redevelopment plan, former Mayor Kay Barnes and former City Manager Wayne Cauthen, continue to support the project and are skeptical about the city’s new assumption.

“I would not assume that situation will continue into the future,” Barnes said. “Five or 10 years out, it may look very different and much closer to the earlier projections.”

And the Cordish executive in charge of the district said the company remains bullish on the project.

Schulte, who was not involved in the original Cordish negotiations, said that taxpayers still should be pleased with the investment.

He said much of the money went toward rebuilding crumbling downtown sewers and streets, and the project has greatly improved downtown’s reputation.

“20-20 hindsight is always good, but I’d tell taxpayers to come down and enjoy downtown, because you’re paying for it,” he said.

“The project has benefited the city enormously in a variety of ways and will continue to do so.”

Cauthen, who’s back in Colorado after losing the city manager job in November, was surprised that his successors at City Hall were calculating such dismal long-term financial returns.

“No disrespect to these guys, but I think it would be prudent to speak to the people who put the expectations together,” Cauthen said.

The former city manager said the arrival of a professional franchise at the Sprint Center, the opening of the Kauffman Center for the Performing Arts, a potential new convention hotel and several other unknown variables could mean more business at the Power & Light District and more revenues for the city.

“I agree with the assessment this project was the right thing to do,” Cauthen said. “You never would have had the NAACP in Kansas City the way downtown looked in 2003, or the Big 12 basketball tournament.”

Schulte said he hopes the project will beat the city’s latest projections.

“It’s my hope that an economic recovery and Cordish fully leasing the project will mean that subsidy number goes down,” he said.

The 511,000 square feet of retail space in the Power & Light District is now about 75 percent occupied, according to the city.

Rob Hunden, the Chicago consultant who prepared the revenue projections the city based its assumptions on in 2005, believes that big factors in the shortfall were the delayed opening and continuing vacancies.

The report by C.H. Johnson Consulting assumed that the development would be fully operational with 90 percent occupancy by March 2007 and that it would generate $17.7 million in sales-related tax revenues its first year. Instead, the first two businesses didn’t open until November 2007, and only about a dozen were open by spring 2008.

“The primary assumption going into the analysis was that it would lease up and be completed in the time we estimated, and neither of those things happened,” Hunden said. “The tenants who have opened have performed as projected; the problem is, not enough tenants have opened.”

For their part, city officials are not blaming Cordish for missing the financial projections. They assign the blame to the weak economy, higher-than-expected infrastructure costs and higher-than-expected borrowing costs, again, a factor of the national downturn.

“The deficit is not the result of Cordish,” Schulte said. “They continue to open more retail and restaurants in one of the worst economic conditions the city has ever faced.

“We simply built too much infrastructure on an uncertain revenue stream and optimistic assumptions about the global credit markets.”

Cordish estimated $212 million out of the $295 million in bond proceeds went toward rebuilding the infrastructure in the Power & Light development area. That figure, however, includes two city-owned underground parking garages specifically serving the project.

“This new public infrastructure, which traditionally would have been paid for out of public works, supports the entire downtown, and these expenditures absolutely had to be made if downtown was to continue to be viable,” Nick Benjamin, executive director of the Power & Light District, said in a statement.

The remainder of the bond proceeds went toward developing the project itself. Cordish officials have said their company has invested at least $150 million in the development.

Benjamin also said the project has generated far more tax revenues for the city than have been captured within the development itself for the purpose of repaying the bonds.

“If one includes all the incremental tax benefits that have accrued to the city from the decision to build the district … the Power & Light District is covering not only its own costs, but those of the rebuilt city infrastructure as well.”

Schulte agreed it would likely have cost the city about as much as the annual subsidy if it had issued general obligation bonds to do the infrastructure work.

But the district was touted as being a redevelopment project that would pay for itself, not a long-term obligation of the city.

“I probably would have sold it on the infrastructure component and talked about how a downtown that shut down at 5 p.m. is now almost a 24-hour operation,” Schulte observed.

The continuing subsidy should not require any future cuts in the city budget because, Schulte said, funding has been built into future budget calculations. Still, the subsidy subtracts from money that could be spent on other city needs.

“You might have $10 million or $15 million to do something else,” he said, “but then if you didn’t have the district you might continue to see businesses leave downtown, and there are costs associated with that.”

As for the Kansas City Council, the city manager believes the projected long-term subsidy should not be a surprise.

“I think they see it as an investment that will pay off, maybe not to the general fund, but from an overall community standpoint and to the benefit of downtown,” Schulte said.

Mayor Mark Funkhouser was on vacation and could not be reached for comment.

Hermann, who leads the council’s finance committee, said that while the city analyzed the original deal with “rose-colored glasses,” the project was still worthwhile.

She agreed with the city’s latest projection.

“Regardless of what the projections were, we need to make it a success,” Hermann said. “Over half of that money that was spent went to infrastructure.

“We were projecting just 100 percent coverage on the payments, and that was rose-colored glasses, but that doesn’t mean it was a bad project.

“We should have been more transparent, but then the economy went bad and we should have talked about where the money was going to come from.”

**007** · 07-19-2010, 10:33 PM

I don't even go there unless I am going to the Sprint Center for a concert. I won't even waste my money on the overpriced drinks there.

|Zach| · 07-19-2010, 11:32 PM

Quote:

Originally Posted by BWillie007

Uhh...I've seen people literally get shot at in Westport in the summer. I don't know how the violence is now, but I can tell you before PNL it was terrible. I saw cops having to break up huge fights all the time. People getting arrested all over. PNL has much more people than Westport and at least from first glance, I'm sure there is less crime per capita there.

Oh hey, a JOCO'er telling someone who lives and works at a place what that place is like.

Does random violence happen? Yes. Absolutely it does. This is an urban area. Not just a city like in Kansas where you string together a few Old Navy's and a TGI Fridays and call it a day.

A good friend of mine was the victim of random violence in KC...he was shot...miracle he lived. It does happen.

However for the most part people wind up in bad situations because they put themselves in those situations or made bad decisions being around people they shouldn't be around.

The idea that there are not as many fights in P+L is silly. There is all kinds of Ed Hardy v. Ed Hardy douche bag fights. News about violence that happens on the outer edge of P+L is usually not as widely known.

Westport is a great place to hang out and have a few drinks. Most of the loud mouth shit faced drunk drivers like yourself go to P+L now. Thanks.

Sweet Daddy Hate · 07-20-2010, 10:37 AM

If PNL cleared the mousse-headed douchebags and KU Med rejects the **** out of Westport, then all the better.
And FTR; the only time Westport was even remotely dangerous was back in the Harris House days when Dale Carter was brandishing weapons about. But even then, that did not stop ROR from rocking the stage and partying 100-times harder than you.

Thx/Bye!

Titty Meat · 07-20-2010, 12:18 PM

Quote:

Originally Posted by ROR

If PNL cleared the mousse-headed douchebags and KU Med rejects the **** out of Westport, then all the better.
And FTR; the only time Westport was even remotely dangerous was back in the Harris House days when Dale Carter was brandishing weapons about. But even then, that did not stop ROR from rocking the stage and partying 100-times harder than you.

Thx/Bye!

Extra Point · 07-21-2010, 07:00 PM

Quote:

Originally Posted by ROR

If PNL cleared the mousse-headed douchebags and KU Med rejects the **** out of Westport, then all the better.
And FTR; the only time Westport was even remotely dangerous was back in the Harris House days when Dale Carter was brandishing weapons about. But even then, that did not stop ROR from rocking the stage and partying 100-times harder than you.

Thx/Bye!

This, from a guy whose BBQ bean recipe starts with canned baked beans!

MadMax · 07-21-2010, 08:02 PM

Quote:

Originally Posted by |Zach|

Oh hey, a JOCO'er telling someone who lives and works at a place what that place is like.

Does random violence happen? Yes. Absolutely it does. This is an urban area. Not just a city like in Kansas where you string together a few Old Navy's and a TGI Fridays and call it a day.

A good friend of mine was the victim of random violence in KC...he was shot...miracle he lived. It does happen.

However for the most part people wind up in bad situations because they put themselves in those situations or made bad decisions being around people they shouldn't be around.

The idea that there are not as many fights in P+L is silly. There is all kinds of Ed Hardy v. Ed Hardy douche bag fights. News about violence that happens on the outer edge of P+L is usually not as widely known.

Westport is a great place to hang out and have a few drinks. Most of the loud mouth shit faced drunk drivers like yourself go to P+L now. Thanks.

My cousin who chose to be homeless was murdered camping below the River Quay, I know this isn't in the same area but close enough. They crushed his head with cinder blocks

KC is a lot less violent than bigger cities. I personally loved Westport as a young 20 something person

Sweet Daddy Hate · 07-22-2010, 12:53 AM

Quote:

Originally Posted by Extra Point

This, from a guy whose BBQ bean recipe starts with canned baked beans!

So you have a problem with Bobby Bell? Because this is what you're saying to me.

Sweet Daddy Hate · 07-22-2010, 12:57 AM

Quote:

Originally Posted by MadMax

My cousin who chose to be homeless was murdered camping below the River Quay, I know this isn't in the same area but close enough. They crushed his head with cinder blocks

KC is a lot less violent than bigger cities. I personally loved Westport as a young 20 something person

JFC, dude...

**DaneMcCloud** · 07-22-2010, 01:08 AM

Quote:

Originally Posted by MadMax

KC is a lot less violent than bigger cities.

Absolutely ****ing bullshit.

Kansas City is consistently in the top ten of violent crimes and murder per capita each and every year.

Kansas City is more than twice the national average in nearly every criminal and violent crime rating in America.

http://www.cityrating.com/citycrime....+City&state=MO

Sweet Daddy Hate · 07-22-2010, 01:54 PM

Quote:

Originally Posted by DaneMcCloud

Absolutely ****ing bullshit.

Kansas City is consistently in the top ten of violent crimes and murder per capita each and every year.

Kansas City is more than twice the national average in nearly every criminal and violent crime rating in America.

http://www.cityrating.com/citycrime....+City&state=MO

Phoenix is a raging cesspool of meth heads, murderers, and wife-beaters.

BWillie · 07-22-2010, 02:14 PM

Quote:

Originally Posted by DaneMcCloud

Absolutely ****ing bullshit.

Kansas City is consistently in the top ten of violent crimes and murder per capita each and every year.

Kansas City is more than twice the national average in nearly every criminal and violent crime rating in America.

http://www.cityrating.com/citycrime....+City&state=MO

Truth. I'd like to see them compare metropolitan areas as a whole though instead of just the city. Even though there is a huge huge difference depending on what part of the area you are in, it would be interesting if they judged by MSA. It may be that KC's inner city is just much more violent than some cities on the coasts inner cities. For some reason most of the most violent cities in the country are in the midwest. IE - Cleveland, Detroit, KC, Memphis (close enough), St Louis.

Mojo Jojo · 07-22-2010, 06:19 PM

Did any of you see Ruckus this evening? P&L was the lead topic...the liberals and the conservatives agreed we needed downtown development but the tax payers are getting screwed because the numbers were wrong to begin with. Someone pointed out that when the newer bonds due in 20-years, independent audits say there is a good chance the district still will not be able to pay off the debt.
Also discussed...the Funk was city auditor when this came up and he said the numbers were bad, but the city council ignored his suggestions and went with Cordish's numbers.
They also went out of the way to point out that Sprint Center and P&L are two different projects...funded two different ways. Sprint Center done right...P&L screw the tax payer.

Titty Meat · 07-22-2010, 08:05 PM

Quote:

Originally Posted by Mojo Jojo

Did any of you see Ruckus this evening? P&L was the lead topic...the liberals and the conservatives agreed we needed downtown development but the tax payers are getting screwed because the numbers were wrong to begin with. Someone pointed out that when the newer bonds due in 20-years, independent audits say there is a good chance the district still will not be able to pay off the debt.
Also discussed...the Funk was city auditor when this came up and he said the numbers were bad, but the city council ignored his suggestions and went with Cordish's numbers.
They also went out of the way to point out that Sprint Center and P&L are two different projects...funded two different ways. Sprint Center done right...P&L screw the tax payer.

No shit. How many distrcts last 20+ years? Whats Ruckus?

Mojo Jojo · 07-22-2010, 08:14 PM

Quote:

Originally Posted by billay

No shit. How many distrcts last 20+ years? Whats Ruckus?

Ruckus is a local PBS round table show that deals with current issues...most local, some regional and a few national. Think The McLaughlin Group on a local scene. The panel is two conservatives, two liberals and a moderate (swing vote).
This is one of the few times I've seen all 5 agree on a topic. Good idea...poor execution by the city.

**Saul Good** · 07-22-2010, 08:30 PM

Quote:

Originally Posted by Mojo Jojo

Ruckus is a local PBS round table show that deals with current issues...most local, some regional and a few national. Think The McLaughlin Group on a local scene. The panel is two conservatives, two liberals and a moderate (swing vote).
This is one of the few times I've seen all 5 agree on a topic. Good idea...poor execution by the city.

It's stupid to expect an entertainment venue to be self-sustaining when close to 80% of the capital is used to build infrastructure. It's not like they put it out in the middle of nowhere, either. They put it downtown. What does that say about our city planners?

This would be like Lamar Hunt and Ewing Kaufman being required to pave I-70 and Blue Ridge when the stadiums were built and then build an airport for the teams to fly in and out of.

07-18-2010, 01:05 PM
Titty Meat Inmem 2.0 Join Date: Aug 2007 Location: My house Casino cash: $-1022442	The Power & White District is doing good http://www.kansascity.com/2010/07/13...-need-big.html Power & Light District will need big subsidies from city By KEVIN COLLISON The Kansas City Star KEITH MYERS \| The Kansas City Star The Power & Light District, where restaurants were busy on Tuesday evening, is still viewed by city leaders as a long-term benefit to downtown despite Tuesday’s news. More News In a tangled TV market, it’s hard for rivals to uproot established cable providers Tom Bloch to leave H&R Block's board in September Facing ire of critics, Apple offers free protective case for new iPhone Online auction sells recovered items from police departments Neurosurgeons consider hospital shift Focus on business retention grows Consumer gloom weighs on markets; Dow drops 261 Insider trading \| Jack Henry & Associates Business briefs: Earnings reports from Citigroup, Gannett and others Mismatch in the job market Goldman Sachs agrees to $550 million settlement Revenue at KC area casinos trails last year’s pace Jobs and consumer confidence slump while corporate profits grow Best of the blogs Cityscape \| Bistro in KC to test chain’s new happy hour items Ways to save as you head off to college Missouri, Kansas see increased foreclosure activity Flash forward \| The week ahead in business Anticipation of Goldman Sachs settlement turns stocks around Starwatch consumer \| Children’s tents recalled In a major shift from its original financing plan, Kansas City officials now project that the Power & Light District will require a long-term $10 million to $15 million annual cash subsidy. When the city in 2006 approved issuing $295 million in bonds for the downtown entertainment project, it was conceived as a self-sustaining venture. But a delayed opening, the economic downturn and higher-than-expected borrowing costs have meant that so far it has not generated enough revenue to cover debt payments. “It will probably never fully cover itself,” acting City Manager Troy Schulte told The Kansas City Star in an interview. “We’ve built into all of our long-term projections the assumption of a $10 million to $15 million annual debt subsidy.” Given Schulte’s estimate, to subsidize the district, developed by the Cordish Co. of Baltimore, city taxpayers would have to shell out at least an extra $230 million by the time the bonds are due in 2033. Schulte said the subsidy would be built into future budgets, and he and City Councilwoman Deb Hermann said the project, which replaced acres of urban blight, was still a good investment for downtown. The chief architects of the redevelopment plan, former Mayor Kay Barnes and former City Manager Wayne Cauthen, continue to support the project and are skeptical about the city’s new assumption. “I would not assume that situation will continue into the future,” Barnes said. “Five or 10 years out, it may look very different and much closer to the earlier projections.” And the Cordish executive in charge of the district said the company remains bullish on the project. Schulte, who was not involved in the original Cordish negotiations, said that taxpayers still should be pleased with the investment. He said much of the money went toward rebuilding crumbling downtown sewers and streets, and the project has greatly improved downtown’s reputation. “20-20 hindsight is always good, but I’d tell taxpayers to come down and enjoy downtown, because you’re paying for it,” he said. “The project has benefited the city enormously in a variety of ways and will continue to do so.” Cauthen, who’s back in Colorado after losing the city manager job in November, was surprised that his successors at City Hall were calculating such dismal long-term financial returns. “No disrespect to these guys, but I think it would be prudent to speak to the people who put the expectations together,” Cauthen said. The former city manager said the arrival of a professional franchise at the Sprint Center, the opening of the Kauffman Center for the Performing Arts, a potential new convention hotel and several other unknown variables could mean more business at the Power & Light District and more revenues for the city. “I agree with the assessment this project was the right thing to do,” Cauthen said. “You never would have had the NAACP in Kansas City the way downtown looked in 2003, or the Big 12 basketball tournament.” Schulte said he hopes the project will beat the city’s latest projections. “It’s my hope that an economic recovery and Cordish fully leasing the project will mean that subsidy number goes down,” he said. The 511,000 square feet of retail space in the Power & Light District is now about 75 percent occupied, according to the city. Rob Hunden, the Chicago consultant who prepared the revenue projections the city based its assumptions on in 2005, believes that big factors in the shortfall were the delayed opening and continuing vacancies. The report by C.H. Johnson Consulting assumed that the development would be fully operational with 90 percent occupancy by March 2007 and that it would generate $17.7 million in sales-related tax revenues its first year. Instead, the first two businesses didn’t open until November 2007, and only about a dozen were open by spring 2008. “The primary assumption going into the analysis was that it would lease up and be completed in the time we estimated, and neither of those things happened,” Hunden said. “The tenants who have opened have performed as projected; the problem is, not enough tenants have opened.” For their part, city officials are not blaming Cordish for missing the financial projections. They assign the blame to the weak economy, higher-than-expected infrastructure costs and higher-than-expected borrowing costs, again, a factor of the national downturn. “The deficit is not the result of Cordish,” Schulte said. “They continue to open more retail and restaurants in one of the worst economic conditions the city has ever faced. “We simply built too much infrastructure on an uncertain revenue stream and optimistic assumptions about the global credit markets.” Cordish estimated $212 million out of the $295 million in bond proceeds went toward rebuilding the infrastructure in the Power & Light development area. That figure, however, includes two city-owned underground parking garages specifically serving the project. “This new public infrastructure, which traditionally would have been paid for out of public works, supports the entire downtown, and these expenditures absolutely had to be made if downtown was to continue to be viable,” Nick Benjamin, executive director of the Power & Light District, said in a statement. The remainder of the bond proceeds went toward developing the project itself. Cordish officials have said their company has invested at least $150 million in the development. Benjamin also said the project has generated far more tax revenues for the city than have been captured within the development itself for the purpose of repaying the bonds. “If one includes all the incremental tax benefits that have accrued to the city from the decision to build the district … the Power & Light District is covering not only its own costs, but those of the rebuilt city infrastructure as well.” Schulte agreed it would likely have cost the city about as much as the annual subsidy if it had issued general obligation bonds to do the infrastructure work. But the district was touted as being a redevelopment project that would pay for itself, not a long-term obligation of the city. “I probably would have sold it on the infrastructure component and talked about how a downtown that shut down at 5 p.m. is now almost a 24-hour operation,” Schulte observed. The continuing subsidy should not require any future cuts in the city budget because, Schulte said, funding has been built into future budget calculations. Still, the subsidy subtracts from money that could be spent on other city needs. “You might have $10 million or $15 million to do something else,” he said, “but then if you didn’t have the district you might continue to see businesses leave downtown, and there are costs associated with that.” As for the Kansas City Council, the city manager believes the projected long-term subsidy should not be a surprise. “I think they see it as an investment that will pay off, maybe not to the general fund, but from an overall community standpoint and to the benefit of downtown,” Schulte said. Mayor Mark Funkhouser was on vacation and could not be reached for comment. Hermann, who leads the council’s finance committee, said that while the city analyzed the original deal with “rose-colored glasses,” the project was still worthwhile. She agreed with the city’s latest projection. “Regardless of what the projections were, we need to make it a success,” Hermann said. “Over half of that money that was spent went to infrastructure. “We were projecting just 100 percent coverage on the payments, and that was rose-colored glasses, but that doesn’t mean it was a bad project. “We should have been more transparent, but then the economy went bad and we should have talked about where the money was going to come from.”
Posts: 78,092

07-19-2010, 10:33 PM	#106
007 Shaken. Not stirred. Join Date: Sep 2002 Location: London Casino cash: $12220126 VARSITY	I don't even go there unless I am going to the Sprint Center for a concert. I won't even waste my money on the overpriced drinks there. __________________ My dear girl, there are some things that just aren’t done. Such as, drinking Dom Perignon ’53 above the temperature of 38 degrees Fahrenheit. That’s just as bad as listening to the Beatles without earmuffs.
Posts: 65,734

07-20-2010, 10:37 AM	#108
Sweet Daddy Hate Unsparing Join Date: Aug 2008 Casino cash: $10004900	If PNL cleared the mousse-headed douchebags and KU Med rejects the ** out of Westport, then all the better. And FTR; the only time Westport was even remotely dangerous was back in the Harris House days when Dale Carter was brandishing weapons about. But even then, that did not stop ROR from rocking the stage and partying 100-times harder than you. Thx/Bye! __________________ 1. Merciless, severe. 2. Given freely and generously. 100% refusal to overrate 20 year Head Coaches with ZERO ing rings as a Head Coach. CP's Official Professor of 'Dem Blues for 2019/2020!**
Posts: 77,135

07-22-2010, 06:19 PM	#117
Mojo Jojo Veteran Join Date: Jun 2005 Location: Johnson County Casino cash: $10013802	Did any of you see Ruckus this evening? P&L was the lead topic...the liberals and the conservatives agreed we needed downtown development but the tax payers are getting screwed because the numbers were wrong to begin with. Someone pointed out that when the newer bonds due in 20-years, independent audits say there is a good chance the district still will not be able to pay off the debt. Also discussed...the Funk was city auditor when this came up and he said the numbers were bad, but the city council ignored his suggestions and went with Cordish's numbers. They also went out of the way to point out that Sprint Center and P&L are two different projects...funded two different ways. Sprint Center done right...P&L screw the tax payer.
Posts: 3,341