$5 billion in tax money for a new Royals stadium? What leaked documents reveal
The document projects huge tax collections, based on several assumptions of how sales tax revenues would grow over 40 years. But where those numbers came from — and whether voters would renew a sales tax for the Royals — is still unknown.
A recently leaked document from Jackson County is raising major questions about how much taxpayers might fork over for a new Royals Stadium in downtown Kansas City. The document has also illuminated the messy, behind-the-scenes dealing guiding negotiations between the Royals, Jackson County Executive Frank White, and Kansas City.
KCUR obtained the document, which lays out a hypothetical financing plan over nearly five decades for a Royals stadium if it’s placed in downtown Kansas City, which hasn’t yet been decided.
The calculations estimate an extraordinarily expensive project — far exceeding the Royals’ estimated cost of about $1 billion.
Here is what KCUR learned from the leaked financial details:
What’s in the financial document?
The document from the office of Jackson County Executive Frank White is a hypothetical projection of how much a downtown baseball stadium would cost Jackson County through different revenue streams. It makes several assumptions: primary among them that voters will approve extending the current three-eighths cent sales tax that funds Kauffman and Arrowhead stadiums, until 2071. Money collected from that sales tax is split evenly between the Chiefs and the Royals.
According to the document, the Royals project that collections from the sales tax will grow by 2.5% each year. If the Royals get their wish of extending the sales tax for 40 years — from 2031 to 2071 — they would receive $2 billion from their half of the tax collection. The Royals issued a statement Friday calling the numbers “erroneous.”
Jackson County, according to the document, projects that money collected from the sales tax will only grow by 1% annually. Using that metric, the county estimates that the Royals would receive $1.28 billion from 2031 to 2071.
The document also assumes continuation of the county park levy, which supports the Truman Sports Complex to the tune of $3.5 million every year. The Royals receive half of that money. If the park levy continues to 2071, the document assumes, the Royals would receive $70 million total.
The final assumption is that Missouri and Kansas City will continue giving money directly to the Royals every year. If the current amount stays the same, that’s an additional $2.5 million per year, or $100 million over 40 years, according to the document.
The document also includes projections about the Royals’ share of property insurance coverage, and assumes that the county’s payment of insurance would increase by 10% every year. From 2031 to 2071, the county would spend about $2.9 billion on insurance for a new Royals stadium.
What do those numbers mean?
If the county's financial analysis is accurate, it means a project that far exceeds $1 billion.
Using the county’s assumptions of 1% annual growth of the three-eighths sales tax, it means Jackson County taxpayers will pay $4.4 billion for a new Royals stadium over 40 years.
On the higher end, using the Royals assumptions of 2.5% annual growth of the three-eighths cent sales tax, the cost for Jackson County taxpayers comes out to $5.1 billion over four decades, KCUR has calculated.
How accurate are the numbers? Can we trust them?
The numbers are projections that rely on several assumptions being true. And the source of the projections still isn’t clear.
For one, we don’t know how the Royals calculated that the three-eighths cent sales would grow by 2.5% every year. It’s also not clear how Jackson County came to its conclusion that the same sales tax would grow by 1% every year.
Again, the Royals have called the financial figures “erroneous” and “inconsistent” with what the team has shared publicly and privately in negotiations. They maintain a renewal of the three-eights cent sales tax would net them $350 million for construction costs.
The document also relies on the assumption that Jackson County voters will approve extending the three-eighths cent sales tax. And it assumes that the city and state will continue their financial contributions to the Royals.
Also unclear is how the county estimates that its property insurance costs for the Royals stadium will grow by 10% annually. Some county officials are frustrated the numbers have been circulated publicly.
“That’s not the rate of inflation, that's not trend-based,” said Jackson County Legislator Manny Abarca IV. “It's just honestly bad math.”
The Jackson County executive’s office did not respond to a request for comment by the time of publication. KCUR cannot say where the sources of these financial assumptions are coming from.
Abarca questioned the legitimacy of the numbers.
“It is disappointing to say that (the county executive’s office) provided zero sources,” he said.
Kansas City Mayor Quinton Lucas also appeared to weigh in on the issue Friday morning, issuing a vague statement on the social media platform X insinuating the county was tanking negotiations, and may even cause the Chiefs to consider leaving the county.
Y’all gonna mess around and lose the Chiefs too.— Mayor Q (@QuintonLucasKC) October 27, 2023
"Yesterday, there was a leak which said county estimated new stadium is between $4B and $6B. Seemed unrealistic and a sign to some, me included, of bad faith negotiation," Lucas clarified on social media Friday morning. "Given the same county folks are negotiating with Chiefs, I’m concerned current tactics could lose both teams."
What role does Jackson County have in negotiations?
The county is the primary landlord of the Truman Sports Complex, which includes Kauffman and Arrowhead stadiums. Keeping the new stadium within county limits means the Royals have to negotiate a deal with Jackson County, particularly County Executive Frank White.
What do the Royals want?
The Royals want taxpayer support to help pay for a new stadium.
Specifically, if that stadium remains in Jackson County, the Royals want the three-eighths cent sales tax to be extended for 40 years to fund a new stadium. The team’s current lease on Kauffman Stadium will end in 2031, the same time the current three-eighths cent sales tax is set to expire. Royals owners have said the team will not break its lease. They’ve also said they want the new stadium, wherever it is, completed by Opening Day in 2028.
Royals owner John Sherman previously said he wants renewal of the sales tax on the April 2024 ballot for Jackson County. But as negotiations continue, the county is running up against a fast-approaching deadline — legislators must decide by January whether to put the sales tax question to voters in April.
In their statement following the release of the county’s financial document, the Royals reiterated their desire for an extension of the three-eighths cent sales tax, adding it would net the team about $350 million from the county to go toward stadium construction costs.
That still leaves a $650 million financing gap, which would come from the Royals’ private investment and other unspecified public funds. The team also said it would cover cost overruns to the stadium and the $1 billion entertainment district surrounding the stadium.
Jackson County legislator Sean Smith said even at the lower projection, the Royals are asking the county for more than it can afford.
“It’s a very very large ask, much, much more than I think the county can do and still remain financially healthy,” he said, referring to the Royals’ ask for $350 million from extending the three-eighths cent sales tax.
Where are the Royals and Jackson County in negotiations?
According to reporting from The Kansas City Business Journal, Jackson County sent a counter-offer to the Royals earlier this month. In that offer, the county would pay $15 million annually over 20 years, for a total cost of $300 million, but officials have not specified where that money would come from.
Earlier this week, the Jackson County Legislature passed a resolution saying the Royals gave the county a “reply offer term sheet” laying out how the team would finance a new baseball stadium in the East Village. In that resolution, the legislature gave Executive Frank White 48 hours to give its members recommendations on the county’s response to the Royals’ offer.
KCUR requested the term sheet, but Jackson County said the records are closed under Missouri’s Sunshine Law.
Does all this mean the stadium is going to be in the East Village?
No. The Royals will ultimately make the final decision on where to put the stadium, and they have not chosen a site yet. A site in North Kansas City in Clay County is also very much in play. That the team is negotiating with Jackson County does not guarantee the stadium will ultimately end up in the East Village. It’s also unclear when the Royals will make their final decision.
And perhaps the biggest question still remains: whether Kansas City area residents even want a new stadium at all.
Smith, who represents the southeastern part of Jackson County, said many of his constituents want the Royals to stay at Kauffman Stadium for nostalgia and cost reasons.
“The community, in my opinion, isn't even convinced that we need a new baseball stadium,” he said. “And then of course, if the costs look exorbitant, then that support’s even worse.”