In what has been a contentious, high-profile back and forth between city leaders, workers groups and residents, the Kansas City Council passed 165 pages of stadium agreements by an 11-2 vote Thursday afternoon, pushing the new downtown stadium one stop closer to opening in 2030.
The project would reconfigure the iconic Crown Center neighborhood, including Hallmark’s corporate headquarters, into what supporters hope will be a hub of entertainment, retail and tourist activity anchored by a state-of-the-art stadium for the Kansas City Royals.
In celebrating the move, Royals Chairman and CEO John Sherman said Thursday's vote signaled the largest public-private economic development project in Kansas City history.
"It will bring Royals baseball to the center of the city, creating jobs, housing and year-round economic activity, advancing Kansas City's terrific momentum," Sherman said.
Funding agreement
Kansas City Council's finance committee earlier this week approved two ordinances, promising $600 million in city funds toward the $1.9 billion stadium project.
According to the agreement, public funds from city and state sources would contribute $1.14 billion of the project, or 60% of the cost, possibly through selling one or more series of tax-exempt bonds. Private sources accumulated by the Royals would fund the remaining costs at $760 million.
The Show-Me-Sports Investment Act would help Missouri repay debt service from the project over 30 years. This would be done on revenue bonds of $15.3 million annually, or $459 million over 30 years, as well as up to $148 million in infrastructure funding and tax credits.
The agreement also says the Royals would “have no obligation to repay or otherwise support payment of” city-backed bonds, leaving the city to cover any annual shortfalls.
They also give the Royals flexibility to seek other incentives, such as property-tax breaks in the ballpark district. If pursued, any revenue needed to make the related development financially viable would stay with that development instead of toward paying the debt.
Lease agreement
Earlier this month, the Kansas City Plan Commission unanimously approved rezoning of Crown Center for the future 85-acre Royals ballpark district, as long as the Royals and Hallmark Cards maintain the same parking arrangements for the residents of San Francisco Tower and provide a visual noise and light study that would be made publicly available.
For the new stadium, the proposed lease agreement states that the Royals would assume maintenance and insurance costs for the new stadium in addition to $1 in annual rent to the city.
The lease agreement also proposes an "end-of-term period," where the Royals could pay less on stadium maintenance in the last five years of the team’s 30-year term if they choose not to renew the lease and relocate or move elsewhere. Such allowance would require a written notice to the city or during the last year of any of five two-year extensions.
According to the agreement, the Royals would have to make stadium repairs up to $1 million. This excludes work to uphold safety and structural integrity or upgrades for the stadium, with a “useful life” of three or fewer years.
In each end-of-year term, the Royals would not have to spend more than 50% of its average annual maintenance costs from the preceding five years. They could instead turn to more public funding in the future if they wanted to undergo any major renovations.
Councilman Johnathan Duncan of the 6th District, one of two members who voted against the proposal, said the deal was not fair to ordinary Kansas Citians.
"It is my sentiment that the negotiations have benefited the Royals and not the residents of Kansas City,"Duncan said, "that we have treated the Royals with kids' gloves because we've been negotiating out of fear rather than courage. The city has all of the leverage."
Duncan went on to say he believed officials were deluding themselves to think there would be any changes to the agreements before they are finalized now that it has the city's rubber stamp. He criticized the $55 million in community benefits as too little: "We're talking about a multibillion dollar deal." He said tht the 5% of non-bseball revenue the proposal allocates to the city "is nothing."
Community impact partnership agreement
The community impact partnership agreement commits the Royals to a minimum of $55 million over the next 30 years to community improvements which would foster “connectivity with downtown Kansas City and the broader Kansas City region.”
The agreement states that a fraction of the money would be split and contributed towards the Negro Leagues Baseball Museum ($5 million), the Housing Gateway program ($5 million) and the One Percent for the Arts program ($14 million).
The remaining $31 million would then be distributed annually over the term of the lease, or roughly $1 million per year. If they choose to extend the 30-term lease, the annual amount could be less.
Community response
Public comment has flooded council debate for months, both supporting and protesting the plan for the Royals stadium and district.
“As a resident of downtown for over 20 years … I ask the council to fully support these ordinances,” wrote Cody Hickman of the Downtown Neighborhood Association in a public comment email. “It will help our neighborhood grow and prosper as well as give life to Crown Center.”
But opposition has been fierce, with the council chambers Thursday filled with workers' rights advocates who held up signs calling for a public vote on the funding. Residents of nearby San Francisco Tower condominiums said they’d never have purchased property in the luxury building if they knew they’d have a baseball park in their front yard.
