We’ve argued this basic fact for years, and some of the better-known pipers have even changed their tune (but not without charging the townspeople nonetheless). According to a recent study published by SmartAsset based on Pew Research data, Kansas City, Missouri, is not in the top 25 destinations for millennials. Overland Park, Kansas, ranked 14th.

More noteworthy, SmartAsset previously released a study indicating that two Kansas City suburbs ranked in the top 25 places in the United States where millennials are buying homes. Olathe, KS ranked first (!) and Overland Park 11th in the entire country. Kansas City, Missouri—despite our entertainment district, Sprint Center, streetcar, and subsidized corporate headquarters and high-rise luxury apartment buildings—did not appear anywhere in the top 25.

None of this should be surprising. We know that millennials are looking for exactly what previous generations wanted: homes in the suburbs, cars, and good schools. Yet Kansas City leaders persist in telling us we’re a millennial magnet. We aren’t.

There is no shortcut to growing a city; no magical policy that can reverse national demographic trends. A better investment, as Show-Me Institute analysts have argued for years, is for government’s action to be broad and neutral: keep taxes low for everyone, maintain infrastructure, deliver necessary city services, and ensure quality education. Maybe those aren’t as appealing as shiny new construction projects, but they are more successful.

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For starters, the report refers to “greater downtown” Kansas City, which extends as far south as 33rd Street and includes the campus of Penn Valley Community College, two miles away from the Sprint Center. That may be a defensible standard, but I’m guessing it doesn’t fit with most Kansas Citians’ understanding. The photo above is of the KC skyline from a point within the area considered “greater downtown.”

The Downtown Council also released a chart of downtown population growth with projections for future growth, and the outlook is decidedly positive. But if you examine the x axis, you’ll see that 1990 is as far from 2000 as 2019 is from 2020. This scale makes for a misleading presentation of the data.

We took the exact same data points and spaced them more evenly on a time series chart. What you see is largely flat growth from 1990 through 2016. Then the population projection lines rocket upward. The report concedes that this is “unprecedented growth,” but does little to explain exactly why the next few years will be so radically different than the past few decades.

Is it credible that between 2010 and 2020, “greater downtown” Kansas City will see a 46% population growth? For some context, researchers at the University of Virginia project that Kansas and Missouri are only supposed to see a population growth of 4 percent and 3 percent, respectively, in the same time period.

The Downtown Council offers questionable analysis when it discusses which generations choose to live downtown. The text of the report states:

At 41%, Greater Downtown Kansas City has the highest percent of millennials in our community. As you move farther away from downtown, the percentage drops to 26% for Kansas City, MO and 22% for the regional MSA.

The report goes on to tell us:

The data demonstrates that the living, location, and employment patterns of millennials is generally consistent across the country. They are choosing downtown for all their needs.

The report seems to say that because 41 percent of greater downtown residents are millennials that 41percent of millennials live in the greater downtown area. In fact, millennials are not “choosing downtown for all their needs.” Looking at the same 2016 ACS Census data and breaking it down by age group instead of by region, we learn that there are 548,588 millennials (aged 15 to 34) in the Kansas City MO-KS regional MSA. Just over 140,000 live in the city of Kansas City, MO, and according to the Downtown Council, 9,388 live in the “greater downtown.” This means that 74 percent of millennials reside in the region outside Kansas City, MO; 24 percent live inside Kansas City, MO but outside the greater downtown area; and 2 percent live downtown. In other words, downtown may have a large percentage of millennials, but among millennials themselves, only a tiny fraction live downtown.

Everyone wants Kansas City to do well, and promoting a city requires sound policy that rests on solid research. The “State of Downtown” report seems to provide neither. In fact, by presenting population projections wildly at odds with both recent history and state trends, and by overlooking where millennials chose to live, this report appears to deliver little more than mere boosterism.

The post The Downtown Council’s Fuzzy Math appeared first on Show-Me Institute.

Overall, Kansas City redirects $100 to $110 million each year to developers for the various TIF projects in town. That doesn’t include some of the recent ones like Burns & McDonnell, the Kansas City Star, and Cerner. In fact, according to the Washington Post, Cerner is the biggest recipient of taxpayer subsidies in the state of Missouri. Their last subsidy from Kansas City may be the biggest in the city’s history.

When will city leaders decide that we’ve subsidized enough and start trying to reap the rewards of all the previous spending? Given recent news regarding Two Light and the Star, the answer appears to be no time soon.

The post Kansas City’s Debt appeared first on Show-Me Institute.

In Kansas City’s case, justification for this expense is also built upon a fiction. When the effort to bring the GOP convention to Kansas City fell apart last year, the Kansas City Star reported a local consultant urging coworkers on the convention bid to stay on message:

“Nothing negative,” one public relations consultant wrote. “The reason given for the decision should be a lack of downtown hotels. Period. Please stick to this messaging. . . . Let’s all take care of one another. We’re still a team.”

Reporter Dave Helling revisited this argument recently. In the email exchange, another person responded:

I couldn’t agree more. Thanks for reminding us all to stick together. The only thing I would add is a lack of downtown hotels IN CLOSE PROXIMITY TO THE CONVENTION SITE.

It appears everyone fell in line. In Helling’s story about Kansas City’s elimination from hosting the GOP convention, written as soon as the decision was announced and before he received the internal documents mentioned above, he wrote that there were several reasons being offered:

Kansas City’s relative lack of enough high-quality hotel rooms close to the Sprint Center.

The city’s potential struggle to raise $60 million for the event.

Poor rail transit.

That same story goes on to detail the politics included in the GOP’s decision, including this telling part:

“The competition was tough,” said Brenda Tinnen, chairwoman of the Kansas City Convention and Visitors Association. “There are politics involved in these decisions. . . . I’m not sure that there was any one thing that said, ‘OK, this city is better than that city.’”

Tinnen is likely correct. There always are many reasons a convention does not come to a city. It is rarely the case, as some in Kansas City government want us to believe, that conventions are lost because of any one thing. But that is what we hear from the “team” of consultants, government officials, and public relations professionals.

Taxpayers should be wary. Such expensive decisions should be based on sound policy and economics, not a mere fiction promulgated by some on the convention “team” who write about the need to “take care” of one another—whatever that means.

The post Convention Hotel Justification Built on Fiction appeared first on Show-Me Institute.

For those unfamiliar with the Kemper situation, the shortest of the short stories is one of a contract dispute. The American Royal—a century-old nonprofit and scholarship-granting organization focused on agriculture—has a lease with Kansas City to use Kemper but doesn’t think the city has maintained the facility at the level the city promised.

Why the city would neglect Kemper is straightforward enough; the arena has operated in the red for years now, and with the Sprint Center now online downtown, the public face of the city for many concerts and sporting events is no longer in the Bottoms, but on the Bluff. Rather than continue to operate in what it says is a poorly maintained facility, the Royal wants the arena bulldozed and replaced with a new facility that more closely accommodates the Royal’s mission and substantively fulfills the requirements of their lease, which extends amazingly until 2045.

In light of the maintenance requirements and duration of the lease, how much does the Royal say the city is liable for?

Based on the numbers that the American Royal received and validated with the city, [American Royal attorney Chase] Simmons said, the city has $150 million worth of obligations to the organization, on top of the $2.5 million it’s losing on average each year.

In other words, this was a dumb lease by the city for an older facility, whose subsidies we have criticized before. Our longstanding objections to city-ownership of sports stadiums still stands, but it’s accentuated here by what has happened in Kansas City with Kemper Arena. The city has a money pit on its hands and, on top of that, appears to have done a poor job of honoring its remaining lease obligations.

But that doesn’t make the American Royal a victim or a hero in all of this. (Disclosure: I am a Governor with the American Royal.) When the city balked at the Royal’s plan to bulldoze the arena, another group proposed turning Kemper into a multipurpose community sports facility, leveraging . . . historic preservation tax credits. Just two years ago I criticized not only Missouri’s practice of throwing historic preservation incentives around, but I was specifically critical of throwing them at Kemper Arena. The “Foutch Plan” (as it was called) was an alternative, and as a matter of policy it wasn’t “better,” but it did have the positive effect of forcing the Royal to try to make its proposal more attractive.

When it appeared the city may accept the Foutch Plan over the Royal’s, the Royal did something really, really sad—it floated the possibility that it would move out of Kansas City entirely, a nuclear option presumably intended to shock the city back to the Royal’s side. In my view, an American Royal outside the West Bottoms is not the American Royal, and I think most civic leaders would agree with that view. In any case, such a move by the Royal would almost certainly rely on subsidies provided by someone else in the region, probably in Kansas, which would  run afoul of Show-Me’s longstanding opposition to border war incentives.

Ultimately the idea of moving didn’t tip the scale to the Royal, but litigation threatened by the organization against Foutch did, and Foutch dropped its proposal. That threat, while effective in pushing out the competing plan, exacerbated the PR nightmare that got rolling after the Royal’s leadership threatened it could move. But that’s where things stand today: The Royal’s plan appears on track to prevail, and Kemper appears on track to be bulldozed.

The most basic reaction we would offer here is that Kansas City shouldn’t have been in the arena business anyway. Moreover, the overly generous terms of the lease goes to show that trusting government to act as a fiduciary for taxpayers in financial matters is hardly ever prudent. We rejected historic preservation tax credits to save Kemper and also reject border war incentives that would subsidize the Royal so that it could possibly move out of Kansas City.

However, we support contract rights, and to the extent that an agreement was made between the Royal and the city, the terms of that agreement have to be substantively performed. Taxpayers deserved a better deal than the one the city made, but they got a lot of bull instead. And like the city’s predicament with the money-hemorrhaging Power & Light District, what taxpayers deserve does not change what taxpayers are on the hook for. Yes, the Royal may eventually “win” the question of what happens to the Kemper Arena property, but that win will have come at a price—for the organization, and for the city.

There has to be a fundamental shift in the political and policy culture of Kansas City if we are to avoid debacles like this in the future, and that means fighting bad ideas before they are implemented and educating taxpayers about better development strategies that will make them, their families, and their communities better off by empowering them, not the government.

The post The Beef With Kemper Arena appeared first on Show-Me Institute.

We know from previous studies that rail transit does not remove cars from the road. And we know that it is not the rail lines themselves that drive economic development but rather the additional tax incentives that governments hand out along rail lines.

Kansas City Star editorial board member Yael Abouhalkah interrupted Woody Cozad’s comments on the quote to ask, “Proved by what?” For that, we refer him to the links above. Abouhalkah went on to say, “They just had two downtown without incentives.” He never explained what he was referring to, but we suspect it refers to two hotels that Abouhalkah wrote about in August:

Yes, it can be done: Someone can build a hotel in the Kansas City area without a taxpayer subsidy.

Hallelujah.

…It puts new development along the planned two-mile streetcar line, near the Kauffman Center for the Performing Arts, and near the Power Light District and Sprint Center.

First, we at the Show-Me Institute share Abouhalkah’s enthusiasm for anything built in Kansas City without taxpayer subsidies and we are pleased he is highlighting the matter. The problem in the piece is that this development has nothing to do with the streetcar, aside from possibly diverting it from another location in Kansas City. According to Abouhalkah’s own newspaper, the developers’ interest predated the streetcar (emphasis added):

Rob Schaedle said the firm’s first interest in Kansas City was in 2009 when it considered redeveloping the old 21-story Federal Reserve Bank of Kansas City building at 925 Grand Blvd. Though it admired the historic structure, the firm decided to pass on converting it into a hotel.

“But we liked the market,” Schaedle noted and in August of this year bought the property of its new project for $4.5 million.

Abouhalkah and other streetcar boosters are simply claiming credit for any development that occurs after plans to build a streetcar. This is the most basic of logical fallacies: post hoc ergo propter hoc. But this is not uncommon. In a study of economic development programs across Missouri, my colleague, David Stokes, quoted researchers who wrote:

“The best case is that incentives work about 10 percent of the time and are simply a waste of money the other 90 percent.” The authors then relate that, in their experience, “it is not unusual for public officials to attribute all new employment to incentive programs.”

Streetcars will not improve the economy of Kansas City. The economic development handouts, amounting to corporate welfare, will be the engine that drives any development, and even nine times out of 10, that is  “simply a waste.” As time goes on, it will be increasingly difficult to determine exactly what prompted development, but rest assured that everything will be credited to the streetcar.

The post Streetcars Are Not Economic Development appeared first on Show-Me Institute.

Now in its twelfth year, the program has sought to bring statewide attention to endangered places through a media campaign and offers support services to the properties on the list.

The list is a good one overall, calling attention to some notable structures that with some love and money — emphasis on money — could be saved.

But there seems to me to be one significant outlier in the mix: Kemper Arena, Kansas City’s 1970s-era predecessor to the new Sprint Center downtown. The cavernous space hosts few events these days since Sprint opened, and even the family of the arena’s namesake is calling for the place to be torn down. (It is worth noting that our Chairman of the Board (who also is a Show-Me co-founder) is a Kemper, although I have not discussed this issue with him.)

Is Kemper Arena historic? Sure. It housed the 1976 Republican National Convention, countless sporting events, and served as the backdrop of some of the greatest rodeos and barbecues in the country. But does that, therefore, mean it is off limits for demolition, if it comes to that? No.

State-underwritten historic preservation efforts, particularly in and around Saint Louis, have been operating with an open throttle for more than a decade now, with the state issuing more than $1 billion in tax credits for preservation since 1999. As obvious preservation projects have dwindled, the preservation net has widened in some cases to simply keep the subsidies pumping. But are we saving historic buildings, or just saving — and oftentimes subsidizing — aging properties under the pretext of historic preservation? Shouldn’t that blurring distinction bother preservationists?

As a born-and-bred Kansas Citian, a movement to save Kemper absent a plan the private market would embrace would be mystifying to me. There is a difference between advocating for ingenious uses of old properties and trying to force old and obsolete properties on the community for all time. I support the former. I am not keen on the latter. Indispensable history is all around us, but not every building is indispensable.

Kemper Arena has certainly had some fine days, and to the extent Missouri Preservation is highlighting that history, the organization should be applauded. But while Kemper has had historic days, much like so many buildings of its kind, that does not mean it should stand until the end of days.

Preservation has a place. It’s just not every place.

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