Hey! Hey! Hey! Hey! Pay for Your Own Stadium

Yesterday I wrote about an interview I did with KMBC 9 on the Royals’ latest announcement that they had new renderings and “economic impact” details for their new proposed stadium. What makes the subject especially contentious among civic leaders is that the Royals are debating between two sites in the region—one in downtown Kansas City in Jackson County, and one in the inner-ring suburb of North Kansas City in Clay County. The Royals didn’t announce any news on that decision this week, which will likely be made at the end of September when the season ends.

That said, I should make and reiterate a few points about the Royals’ stadium issue, now that it’s back in the news.

• The stadium renderings are cool. It’s easy to poo-poo big-dollar construction proposals as being sales jobs of dubious eventual reality, but that doesn’t make the prospect of something new any less interesting. The eventual financing plan for the stadium will likely be bad policy, but it’s understandable why people might get excited at what a future ballpark might look like. That’s obviously why they had the press conference this week: to stoke support and excitement.
• But cool renderings don’t change the fact that taxpayers shouldn’t pay for professional sports stadia. The renderings for these stadia could have put a helicopter port on the roof, a rocket ship in the parking lot, and a theme park in center field, but a cool drawing doesn’t make giving tax dollars to rich baseball tycoons an appropriate “investment” by the public. Developments like this generally do not expand the pie of disposable income in a region; instead, they tend to redirect spending that was previously being spent by consumers at other restaurants and entertainment options in the region. Ask bar owners in Westport what they think the immediate impact of the Power & Light District was on their traffic and you’ll get a sense of the potential risks of subsidizing new competition to existing businesses this time around.
• The “$2.8 billion” construction impact figure presented by the Royals is not a game changer. As I told KMBC 9, I believe that the Royals believe their numbers and that stadium construction would create “$2.8 billion” in economic activity in and around the ballpark. But what’s that really mean, other than to repeat the obvious? When the team is promising $1 billion in private financing to go along with $1 billion in public support, yeah, those are two giant wheelbarrows of cash being dumped into one spot that get you pretty close to the headline number. But that doesn’t change the fact that half of the spending would be coming from the public to create a district that would compete with other entertainment districts, including Westport and the Power & Light District.
• And speaking of the taxpayer-subsidized Power & Light District, it hasn’t and won’t ever pay for itself. One of the biggest public spending projects in the last couple of decades was the Power & Light District in Kansas City’s downtown. From the beginning, the city was on the hook to pay off the bonds for the property if tax revenue from the district wasn’t high enough. The result? Over the last 16 years, Kansas City taxpayers paid the nearly $170 million gap between what the district costs and what the district generates in tax revenue to pay the bonds. It’s easy to make promises of success when the cost of failure is borne by someone else, and there’s no guarantee taxpayers—whether in Jackson County or Clay County—won’t get soaked this go-around, too.

There is a bit of deja vu here, of course; about this time in 2022, I was talking about a potential move for the Chiefs, whose lease at the Truman Sports Complex ends when the Royals does. But the takeaway now with the Royals is the same as it was with the Chiefs—sports teams should pay for their playthings themselves. The Royals may be the kings of Kauffman, but when it comes to sovereign action in the real world, public officials should reject spending tax dollars on anything but legitimate responsibilities of government. Subsidizing sports teams isn’t one of those responsibilities.