Should Kansas City Taxpayers Foot the Bill for a New Downtown Stadium?
Kauffman Stadium in Kansas City. (Image via Wikimedia Commons.)
In a recent staff training, every member of the Strong Towns staff had to talk off-the-cuff for three minutes about any subject on which we were experts. It was a reminder of just how interesting my colleagues are. I learned about Russian mafia tattoos, speed solving a Rubik’s cube, how to make the perfect spinach salad, and more. When my turn came, I was exceptionally nervous. Surprisingly so. Though I’ve delivered hundreds of speeches in my life, I’m apparently more comfortable giving a talk to a theater full of strangers than I am to a few work friends over Zoom. Suddenly I didn’t feel like an expert in anything.
It was here that Chuck (Marohn, the president of Strong Towns) threw me a lifeline: “Tell us why everyone should be a Kansas City Royals fan.”
I sat up straight. “Oh, that’s easy,” I said. And I was off to the races.
I believe—and this is what I told my colleagues—that it’s better to root for organizations than for teams. Teams are fickle. Over the course of a long season, and certainly from one season to the next, teams can be very good or very bad, and often both. The core group of players that achieved glory one year will break your heart the next. I don’t have to agree with every decision the organization’s front office makes, but I want to be able to trust the character and integrity of the people making those decisions, their philosophy of team-building, how they treat their fans, and how they give back to their city. This is how you can hold your head high as a fan whether your team wins a World Series (as the Royals did in 2015) or loses more than 100 games in a season (2018 and 2019).
Last year, with the pandemic running roughshod over the season, many major league teams cut hundreds of minor league players. In contrast, the Royals didn’t cut any players and in fact paid them for a full season. That’s a stand-up move.
Another way the Royals buck the trend is by refusing to “tank.” It’s common for baseball teams today to field inexpensive, non-competitive teams in order to accumulate more elite prospects through high draft picks or trade…while also padding the team’s bottom line. Dayton Moore, longtime general manager of the Royals, seems to find this boom-and-bust approach offensive, not just to the fans who pay hard-earned money to attend baseball games but to players who have only a small window of time to compete at the professional level.
I’ve also heard Moore say that he has relatively little influence over whether or not the Royals win a World Series. There are just too many things outside his control. But what he can control is whether or not people love coming to work every day. When deciding whether or not to sign a player, the Royals don’t just look at past performance and future projections. They get to know the man. They talk to his family. They talk to former teammates. What was he like on the field? What is he like in the clubhouse? My understanding is that, as a result, the Royals roster is stacked with talented athletes who are also high-character guys. He brings the same approach when hiring for off-the-field positions. Moore wrote in his book More than a Season: Building a Championship Culture that he wants to build “an organization that we’d want our own sons and families to be a part of.”
This isn’t a baseball website. So why did I just spend the better part of 600 words telling you why I not only root for the Royals, but also respect them? Three reasons.
To convince you, of course, to be a Royals supporter too. (Full disclosure: It didn’t work on Chuck, who remains a Twins fan.)
To establish my Royals fan bona fides, because I’m about to be critical of the organization.
To explain why I’m cautiously optimistic the Royals won’t make a very big, potentially very bad decision for Kansas City.
Exploring Their Options
Earlier this month, Royals primary owner John Sherman held a press conference to announce the promotion of two key personnel, including Dayton Moore to the position of team president. In that press conference, Sherman was asked, as he often is, about whether the Royals are considering building a new stadium in downtown Kansas City. Sherman confirmed that the team is exploring its options—including the possibility of a downtown stadium—and that he anticipated some level of public funding.
Almost immediately I started receiving texts from friends daring me to be inconsistent. You see, at Strong Towns we’re pretty skeptical about publicly funded stadiums. Not just because of the actual costs of such megaprojects—investments that historically haven’t paid off, as we will see—but because of the opportunity costs: What low-risk, high-return projects aren’t being pursued because taxpayers are now on the hook for a massive rail project, a highway expansion, or, in this case, a billion-dollar sports stadium?
But would I change my tune now that my own team was involved? Bless me, the first thing that came to mind as I got these texts was a lyric from a Meat Loaf song: “I would do anything for love. But I don’t do that.”
The Kansas City Royals currently play at Kauffman Stadium, located outside the city in Jackson County, Missouri. Built in 1973, Royals Stadium (as it was first called) was a rarity for its time. In an era in which many stadiums were being built to accommodate multiple sports—these were the stroads of stadiums—Royals Stadium was built just for baseball. Now approaching its 50th birthday, Kauffman is the sixth oldest ballpark in the majors. It is also consistently listed among the top ten most beautiful, most fan-friendly parks. (And rightly so. Just look at this.)
“The K,” as it is known among friends, shares the Truman Sports Complex with Arrowhead Stadium, home of the Kansas City Chiefs. Back in 2006, Jackson County voters approved a 3/8 cent sales tax ballot issue to help pay for renovations to Kauffman. The total cost of the renovations was $250 million, with taxpayers picking up $225 million of the tab. As part of that process, the Royals extended their lease at the Truman Sports Complex to 2031.
There’s been chatter about a downtown stadium since at least the early 2000s, but now the clock is ticking. With just 10 years left on their lease, the Royals have some decisions to make: build a new stadium or do another round of renovations. Ten years isn’t a long time if the Royals end up building a new home. From what I’ve read it can take five years to design and build a ballpark, and about that long to work out the financing.
The Case for a Downtown Stadium
Supporters of a move downtown can make some compelling points.
Built in the middle of nowhere, Kauffman Stadium is really only accessible by car or long bus ride. Traffic can be a nightmare getting out to the stadium, especially on weeknights.
There is also little opportunity to develop around the Truman Sports Complex. More and more, baseball teams are surrounding their urban stadiums with what I think of as fan villages. Bars and restaurants, bowling alleys, hotels, retail stores and other businesses—these places make money even when it’s not Game Day. One article I read in Ballpark Digest said that teams are becoming de facto real estate developers. Wrigleyville in Chicago is an example I know firsthand. There are similar developments in Atlanta, San Diego, and Minneapolis, and quite probably other cities as well. This kind of development just isn’t an option where The K is now, which means the Royals may be leaving on the table many millions of dollars in profits, and the city millions of dollars in tax revenue.
The Battery in Atlanta. (Image via Flickr user David Jones.)
Without the all-day experiences of, say, a Wrigleyville or The Battery (a “365-day entertainment experience” in Atlanta), what do Royals fans do before a game? They tailgate in a parking lot so large it can fit one-fifth of the population of Kansas City.
In many ways, Kauffman Stadium’s current location is an object lesson in the problems of the Suburban Experiment. It is single-use (so to speak), resistant to adaptation, auto-oriented, with a massive parking lot that sits empty most of the time. “If you build it, he will come,” says one of the greatest baseball movies ever. And the fans do come to Kauffman Stadium, but only from April through October, and only on game days, and only when the team isn’t on the road.
So boosters say a downtown stadium will be more accessible and have a greater economic impact on the city. They also point out the aesthetic possibilities. Target Field (Twins), Busch Stadium (Cardinals), Petco Park (Padres), PNC Park (Pirates), and other downtown stadiums offer stunning views of their cities. Imagine taking in a night game against the backdrop of the Kansas City skyline. I certainly can.
There’s another reason to build a new stadium in or near downtown, though, interestingly, it’s not one I’ve heard much about. And that is that there is an incredible history of baseball in the urban core of Kansas City.
When the Royals first debuted as a franchise in 1969, they played at Municipal Stadium, at the corner of 22nd and Brooklyn, about a mile-and-a-half from downtown. That stadium had been home to the Kansas City Blues, a minor league team, as well as the Kansas City Athletics. It had also been the home of the Kansas City Monarchs, a legendary Negro League team. Jackie Robinson made his professional debut at Municipal Stadium. Satchel Paige, Ernie Banks, Cool Papa Bell, and Buck O’Neil all played there, too.
Of course, one of the concerns is that a new stadium downtown would have a devastating impact on neighborhoods of color on Kansas City’s east side. It would take a special cynicism to use the legacy of those great players to justify displacing low-income people or people of color today. I want to believe the Royals wouldn’t do that. In the press conference Sherman said one of the criteria any new ballpark would have to meet is that it has “a positive impact in the quality of life for our citizens in Kansas City with a particular focus on those underrepresented parts of our community.”
Are Sports Stadiums Good for Local Economies?
When people make the case for using taxpayer money to build pro sports stadiums, they tend to talk up the economic benefits: construction jobs in the short-term, and a long-term boost to the local economy (more businesses, more jobs, more tax revenue, etc.).
But studies strongly suggest that publicly-funded stadiums don’t actually work out for taxpayers. Research from groups across the political spectrum have shown that the promised economic benefits generally don’t materialize, especially when a stadium is only going to be used periodically. (Basketball and hockey arenas can pull double duty, as venues for concerts, for example.)
Stanford economist Roger Noll has shown that the local economic impact of a professional sports team is less than we might think and that the taxpayers subsidizing new stadiums are often left holding the short end of the stick. Temple economist Michael Leeds has said that in a field (economics) rife with disagreements, the one thing his colleagues can agree upon is the economic impact of sports stadiums: To wit, there is none. In an interview with the radio show Marketplace in 2015, Leeds used Chicago as an example. “If every sports team in Chicago were to suddenly disappear, the impact on the Chicago economy would be a fraction of 1 percent. A baseball team has about the same impact on a community as a midsize department store.”
A 2015 working paper from the Mercatus Center at George Mason University stated it even more baldly: sports franchises may have an effect on the local economy…but the effect is highly limited and often a net-negative.
A concept design for a downtown Kansas City stadium. The design is by the firm Pendulum, unsolicited by the Kansas City Royals. (Image via Ballpark Digest.)
In 2016, the Brookings Institute showed that financing the construction of sports stadiums using tax-exempt municipal bonds had resulted in $3.7 billion in lost tax revenue since 2000. The report authors wrote: “Decades of academic studies consistently find no discernible positive relationship between sports facilities and local economic development, income growth, or job creation. And local benefits aside, there is clearly no economic justification for federal subsidies for sports stadiums. Residents of, say, Wyoming, Maine, or Alaska have nothing to gain from the Washington-area football team’s decision to locate in Virginia, Maryland, or the District of Columbia.”
If the economic benefits don’t materialize when a team sticks around, it’s even worse when the team pulls up stakes and leaves town. When the Rams left St. Louis for Los Angeles, the old Rams stadium still had more than $140 million in debt and maintenance costs attached to it. When the Raiders left Oakland for Las Vegas, they left behind $65 million in debt. Oh, and by the way, the new stadium the Raiders play in Las Vegas cost $1.8 billion to build, including $750 million from Clark County taxpayers. A couple months ago, Clark County had to dip into some of its reserve funds to make a debt payment, because tourism dollars had fallen due to the pandemic.
Sports Stadiums and “Cataclysmic Money”
Another concern about a downtown Royals stadium is its impact on nearby neighborhoods, especially neighborhoods that have experienced decades of disinvestment.
Last year, with the support of the Enid & Crosby Kemper Foundation, and in partnership with Urban3, Strong Towns published a long-term series on the history of Kansas City and the financial ramifications of its development pattern. As part of that series, we looked at the city’s legacy of redlining and its long-term financial impact. “By conspiring to deny capital to some neighborhoods within the city,” we wrote, “Kansas City lenders not only inflicted real financial harm on their neighbors, they undermined the well-being of the entire community.” (For example, a single one-half square mile of redlined neighborhood had cost the community over $30 million in lost tax revenue since 1937.)
We also proposed a way to put wealth back into the hands of the people who live in these redlined neighborhoods. To do that, two things have to happen:
The neighborhood must experience investment, an inflow of capital that stays within the neighborhood.
That capital must be allowed to accrue to the people who are already there; it can’t result in their displacement.
Some of the locations that have been informally proposed for a new downtown stadium—for example, these parking lots at East 12th and Cherry—are in or near historically redlined neighborhoods. At Strong Towns we believe that no neighborhood should be exempt from change. But we also believe that no neighborhood should experience sudden, radical change. My concern is that neighborhoods that received only a trickle of investment for many years will suddenly be flooded with it. This is what Jane Jacobs described as “cataclysmic money.” Not only could this lead to gentrification, there’s also a very real concern (as described by my colleague Daniel Herriges) that the waterfall of money in one neighborhood will dry up the possibility of gradual investment in many other neighborhoods.
Who Should Pay: The Princes or the (Relative) Paupers?
I’ve seen cost estimates for a new downtown stadium that range from $800 million to $1.2 billion. It’s hard for me to understand how building a publicly-funded stadium downtown is a priority for Kansas City. Especially when you consider that the city’s entire annual budget is about $1.7 billion and that earlier this year the city was already trying to plug a $70 million budget shortfall.
It doesn’t seem to be a priority for Kansas Citians either, according to polls stretching back to at least 2014. Sentiments don’t seem to have changed much in the intervening years, according to a new poll conducted last week. Two-thirds of respondents said they would oppose a new stadium if it meant the city had to pay for half the costs. Support eroded further the more money the city had to chip in. More surprising to me was that only 37% of Kansas Citians said they would support a downtown stadium even if the Royals picked up the whole tab. Back in 2019, Mayor Quinton Lucas famously said, “We need a new downtown baseball stadium like I need a new Maserati. It’d be cool to have, but I don’t have the money.” Mayor Lucas indicated on Twitter last week that he’d be open to “the free Maserati approach.”
I have a larger philosophical problem with taxpayers footing the bill for new stadiums. The Royals have a team valuation of $1.06 billion. And when he bought the team in 2019, John Sherman had a reported net worth of between $1-$1.5 billion. Professional sports teams are huge businesses owned by some of the richest people in the country. Taxpayers shouldn’t be subsidizing billionaires. And if building a new stadium is going to generate a profit, the teams can pay for it themselves. I can only assume the reason they don’t want to pick up the full bill is because new stadiums often aren’t a great investment. They’re asking taxpayers to be the backstop—pun intended—of a highly risky business decision.
The thing is, cities need to run profits too. I wrote this last year:
When [Strong Towns says] cities should be profitable, we mean, very simply, that expenses don’t exceed revenue. The way to do that is by being relentless about our current finances; by not betting our futures on huge, irreversible projects (cities shouldn’t “bounce their last check when they die”); and by being genuinely useful, meeting the actual needs of neighbors.
A city that is profitable, proficient, and useful is well on its way to being enduring...and enduring is a city’s primary goal.
Making a good decision on this issue involves doing the math. It sounds like for most Kansas Citians, the cost of a publicly-funded stadium just doesn’t add up. And it sounds like John Sherman is committed to doing the math, as well. As he said in the press conference: “Wherever we play, the criteria will be that the process will result in meaningful community impact that is real and measurable. It will result in economic growth and economic activity that benefits this region, also in a real and measurable way.”
If and when the Royals make the right decision, it will be just one more reason (among many) that you should be a Kansas City Royals fan, too. You and I, we will be #TogetherRoyal.
Cover image via Wikimedia Commons.
If you want to be a Strong Town, your community must redirect its energy to things that will make it financially better off and more prosperous.