The Royals, vying for support weeks before voters will decide whether to promise them decades of tax money, are finalizing terms to give Kansas City Public Schools money to offset the loss of property taxes.
The team’s plans for a stadium and entertainment district in the East Crossroads would swallow up six blocks of real estate that would otherwise represent nearly $1.4 billion in property taxes over 40 years, according to estimates from the Jackson County Assessor's Office.
The news of a deal between the team and the school district comes a day after the Royals promised millions in a community benefits agreement — a deal that some organizations say offers too little.
Jackson County legislators say an agreement to offset the loss of property taxes means the new stadium won’t hurt public schools or shift the district’s tax burden onto other property owners.
Yet school officials argue that the team needs to pay for other community benefits. They contend that public schools might come out even on the property tax loss, but that public schools don’t get anything out of a downtown stadium.
The Royals have yet to make similar promises to other taxing districts that support libraries and mental health care.
Is KCPS gaining anything with this deal?
In 2023, the land targeted for the stadium and entertainment district generated $1.4 million in property tax revenue. Land in the area that would generate an additional $500,000 a year already benefits from tax exemptions or abatements.
The former Kansas City Star building got tax abatements until it shut down in 2021, said Dan Moye, vice president of land development at the Economic Development Corp. of Kansas City. He said the property lost its tax abatement when it stopped functioning as a printing facility.
KCPS got $850,000 in property taxes from the six-block area in 2023, according to a statement released by the district.
At least four of the six city blocks targeted for the ballpark district would be owned by Jackson County, which doesn’t pay property taxes. If voters approve a 3/8-cents sales tax extension on April 2, the county would purchase the land and the Royals would sign a lease with the Jackson County Sports Complex Authority.
Officials involved with the project remain unsure whether the two blocks the county wouldn’t own would be assessed property taxes.
If the stadium were built on privately owned land — say, if the Royals paid for the project on their own — county records suggest it would pay KCPS $16 million in property taxes the first year and $745 million over 40 years.
In a statement on Thursday, KCPS said it landed a guarantee that the district would not lose property tax funding and that the team would give paid internships to three to five students a year for 10 years.
Yet the district wanted more. It called for the Royals to fund its literacy programs and the cost of running the DeLano Youth Housing and Supportive Services project. The DeLano project would revamp a former KCPS school building to provide shelter, transitional living and support services to youth ages 14 to 21.
“We are disappointed that we have been unable to secure any direct long-term benefits to the district,” the district’s statement said.
What will KCPS get from the county Community Benefits Agreement?
The day before this announcement to offset the loss of property taxes on a downtown stadium, the team committed to a community benefits agreement with the Jackson County-backed Community Benefits Coalition. While the coalition negotiated its own CBA with the Royals, KCPS has been advocating for a separate benefits agreement targeted at public education.
The Chiefs and Royals have committed to providing $260 million over the next 40 years to support Jackson County residents and workers. The Royals pledged $140 million over 40 years, or $3.5 million a year.
Initially, the coalition’s community benefits draft proposed both teams pay $1.4 billion in community benefits, including $120 million for education over 40 years. When their housing demands got slashed, leaders representing the Missouri Workers Center and Heartland Center for Jobs and Freedom left the coalition.
“What the Kansas City Royals released today is far from reflective of any ‘significant input’ they claim to have gathered,” the organizations said in a joint statement. “The Royals have given themselves outsized power in making appointments to the ‘CBA Board’ responsible (omitting) a clear indication that community members will have any meaningful say.”
Leaders with the Metro Organization for Racial and Economic Equity (MORE2) also left the coalition.
Lora McDonald, executive director of MORE2, said that her organization pulled out because she had to watch the negotiations on a television in a separate room.
“The people convening the table for Jackson County in this process wanted me, representing forty congregations and non-profits, to be sidelined,” she said in a statement. “I hope the Royals … can reach an agreement that somehow benefits the community. I can watch television at home.”
The terms of the official CBA haven’t been released, but Jackson County Legislator Manny Abarca said the team is offering “a historic level of benefits.”
Abarca said the school district is being promised more money than needed.
“The Royals told me they’re standing by figures I would even say are unreasonable based on incorrectly assessed values of 2023,” he said.
What about other tax jurisdictions?
Meanwhile, the Royals haven’t promised money to public libraries or mental health services that would lose revenue when more property in the proposed ballpark district becomes tax-exempt.
In 2023, Kansas City Public Library drew $90,000 in property taxes from the area. Without the existing tax abatements, the six blocks would have generated $120,000 for libraries.
“We’re talking about a 40-year agreement at a minimum of $120,000 (a year),” said Debbie Siragusa, the library district’s assistant director.
That, she said, is the equivalent of hiring two workers.
Over 40 years, the library district would receive nearly $72 million from the ballpark if it was privately owned. The libraries get 95% of their money from property taxes. Siragusa said her office has not heard anything from the Royals.
“No one has reached out to us either from the Royals or the county,” she said.
She said the library district will be reaching out to the team this week, but developers going through tax incentive agencies are typically required to approach taxing districts.
“For a significant tax incentive, this is not how it would normally happen,” Siragusa said. “We have worked very hard with the city to make sure the taxing jurisdictions, including the library, have an opportunity to talk with developers and incentive agencies so we have input early on.”
The Jackson County Community Mental Health Fund is fully funded by property taxes. Bruce Eddy, the executive director, also hasn’t heard from the team. It stands to lose $350,000 a year, or $14 million over 40 years.
“I don’t know if there’s an intention of paying all of it, some of it, or none of it,” Eddy said.
The abatement the property receives from being leased with a government entity makes the stadium deal unique, said Dan Moye with the EDCKC. Although he is not involved with the deal, he said tax incentive agencies are subject to specific rules.
“A public agency will own the new stadium,” he said, “so it won’t go through the traditional abatement process.”
This story was originally published by the Beacon Kansas City, a fellow member of the KC Media Collective.
