Michael Collins, a former CEO of PortKC and the founder of Grayson Capital, which specializes in “public-private real estate development,” posted a response to my recent post “Why is PortKC Keeping Secrets?”
Mr. Collins did not appreciate my conclusion. He called it “misleading and inflammatory,” and wrote that I was dealing in “political spin.”
I welcome the opportunity to respond. Collins wrote:
The claim that PortKC’s NDA signals secrecy is misleading and inflammatory. The NDA applies only during early negotiations, and thus, to protect complex deals before terms are finalized. That is standard in any serious public-private partnership. It doesn’t block legal disclosures, doesn’t hide information from taxing jurisdictions, and doesn’t erase public accountability. It protects taxpayers from leaks that can tank deals or drive-up costs.
PortKC literally—and I am not being figurative—requires in writing that applicants sign an NDA. I do not know what the justification is for requiring secrecy, but I do know that it is not “standard in any serious public-private partnership.” The Economic Development Corporation of Kansas City (EDCKC), which also provides a raft of public subsidies, requires no such NDA. As I wrote, I can understand why a developer would want such secrecy, but it is another thing completely to have the public body handing out taxpayer subsidies to be the one demanding discretion.
If you doubt that PortKC maintains a level of secrecy throughout its deals, search online for the terms Project Mica and Project Kestrel.
Collins continues:
PortKC’s process requires more upfront disclosure from developer’s ownership, litigation history, financials, job creation, wage data, and community impact than many.
If this is the justification, it doesn’t appear to be working. It was only three years ago that PortKC failed to discover that a developer to which it was prepared to issue subsidies, Lux Living, had a few Securities and Exchange Commission violations in its past. So much for “more upfront disclosure.”
Separately, in its most recent financial audit, PortKC was faulted for failing to demonstrate that it searched federal databases to determine if any vendors were “suspended and debarred entities” prior to payment. Again, PortKC is not demonstrating that it carefully vets applicants.
Collins continues:
Critics, like this guy [that’s me!], also ignore that PortKC posts its full fee schedule, limits its own ability to rack up costs without approval, and requires developers to follow workforce, equity, and wage policies from day one.
Yes, PortKC posts an impressive fee schedule. I can’t say that it’s complete, but it does make quite a buck from issuing taxpayer subsidies. That’s part of the problem.
Most organizations that grow as quickly as PortKC face similar growing pains, and PortKC has taken action.
Has it, though? The financial audits of 2021, 2022, 2023 and 2024 all point out that PortKC failed to provide “effective internal control” of finances. One such finding may be the result of growing pains, but four consecutive findings suggest an inability or an unwillingness to right the ship.
Mr. Collins concludes:
The idea that PortKC is “insisting on secrecy” is political spin. This is about protecting sensitive financial negotiations; not hiding public subsidy. If you’re serious about transparency, deal with the facts; not headlines.
Again, it’s very clear from the PortKC application that it insists on secrecy.
I understand that Mr. Collins and others in the “public-private real estate development” industry are either happy with things just as they are or are hesitant to be critical of a scheme from which they stand to gain. But the argument that taxpayers are also benefitted by “protecting sensitive financial negotiations” from taxpayer scrutiny is just silly.
Organizations like PortKC and the groups they fund want public funds dispersed in the dark. If PortKC were serious about serving the public, its leadership would remove its NDA requirement and heed the counsel of its financial auditors. Until then, it should be viewed skeptically.
