Kansas City Complex Becomes a Budget Hole

[M II A II R II K]

Urban Center Is Budget Hole


April 23, 2012

By ELIOT BROWN

Read More: http://online.wsj.com/article/SB1000...sj_share_tweet

The tab is mounting for this Midwestern city on a bet it made during the real-estate boom on an $850 million entertainment district meant to breathe new life into its struggling downtown. While the eight-block restaurant, nightclub and retail complex named the Power & Light District is mostly complete, traffic and sales are well below initial projections when construction started in 2006.

- Such woes are common among real-estate developers who imagined values and rents in a fast-growing U.S. economy would continue to rise for years. But the Power & Light District stands out because it was financed through a technique that seemed like it would pay for itself. Kansas City directed future sales and property taxes in the district to pay back the $295 million in bonds that the city issued for the project, which went toward infrastructure and to directly support the development. In the event there weren't enough taxes, the city agreed to pick up the difference.

- Today, the project, which sits near the onetime headquarters of Kansas City Power & Light Co., generates less than one-third of what is needed to cover the debt service on the bonds. The city is setting aside $12.8 million in its budget for the fiscal year that starts next month to cover the gap, a notable hole in a $1.3 billion budget that calls for $7.6 million in cuts to the fire department. Given the sluggish real-estate recovery, the city expects similar gaps to persist for years. "Our street maintenance has had to come down; our budget for neighborhood and community services has had to come down," says Scott Wagner, a first-term member of the city council. "You have a very large expense associated with a certain project, and that can't help but stand out."

- Some cities followed similar models, such as Rockford, Ill., which has been paying hundreds of thousands of dollars each year in debt service to cover gaps for a set of planned housing and retail-development projects that stalled with the downturn. The city expects the deficits to narrow or turn positive as the economy recovers. Other cities, such as New York, subsidized transformative projects that are now fully or partially stalled, producing few taxes while not delivering what was envisioned. These dashed hopes are contributing to broader fiscal problems. Kansas City's high debt was cited by Fitch Ratings in February when it warned of a potential downgrade. "The city's debt load has increased substantially over the past decade resulting from an aggressive infrastructure and economic development expansion plan," the ratings firm said.

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[miketoronto]

I guess thats what happens when you build a fake district with chain restaurants and entertainment venues you can find in any other American city.

[Hayward]

These complexes rarely ever work. I mean some limp by, but their speculative nature makes them risky. Better if this would have been a phased piecemeal operation, with a more thoughtful design by architects. Too coarse grain and fortress like in the street views. Salt Lake City and Indianapolis are some exceptions, but their downtowns seem to have always maintained a steady draw of metro residents.

[Centropolis]

We have a similar(ish) project on hold (mothballed?) by Cordish as well for the area around Busch stadium. I believe the city was reluctant to agree to the same terms as KC, which was reason for some of the delay in addition to the economy.

I still haven't visited KC P+L at night, KC has other areas of downtown and several other districts, eat streets, and local restaurants and venues that are far more appealing to me.

[M II A II R II K]

And crappy transit in the downtown area and being a bit too suburban doesn't help either.

[WilliamTheArtist]

From what I can see in the photos I have seen it....

A. looks like a place where people, for a good percentage of the time, gather for events and concerts, and is not so much a place "naturally" used on a daily basis.

B. seems kind of isolated and not well connected to a larger pedestrian friendly area, and contains within itself some non-pedestrian friendly elements, and in and of itself does not seem that large.

C. Doesn't look,,, comfortable and inviting.

One of the things I always look for, especially in a rendering of a new building or space, is how will this space look and feel with no people in it?

It's a common trick of the trade for architects and the like to fill an image with people to make it look more enticing. People do indeed find that attractive, but it can distract you from the real essence of the place. No matter what, sooner or later that place your looking at will have no people in it, its THEN that the real character of the place can become more apparent. I look at the space or rendering and imagine it with no people in it. Then say to myself "Would I be drawn to go there?" "Would I enjoy being in this space alone?". Just about every morning that will be the case for every space. And if that space is not attractive and welcoming, once the novelty wears off of the "new", more and more people will go on by and go to areas they like more and or that are more convenient. (unless there is an event or festival to pull them in) But if it's a welcoming, comfortable, attractive space that "catches" those first few people, which then makes it even more attractive to others, and so on, then you have got something. You can fool most people by filling a crappily designed space/rendering with people, but you won't fool me lol.

Just the other day I saw another rendering of a plaza/public space type area that was being proposed. First immediate glance, "Oh, nice", but then a moment later realized that I was reacting, not to the space itself, but to all the smiling, happy people in the rendering. The space was actually no more attractive than the local mall parking lot and wasn't too dissimilar than a dozen other, often empty and unused spaces in our city. Heck I could make those spaces look attractive by adding dozens of people walking around, chatting in little clusters (oddly often in the middle of a vast open space, like that happens a lot in the real world, if that were true our downtown with it's myriad surface parking lots would be chock full of people) children skipping, someone walking a dog, etc. etc. Sorry, not buying it. Then there was another "birds eye" rendering of a new development on a corner that had large walls at street level, and was right next to and across from other non-pedestrian friendly buildings. But somehow all the streets by this building were full of people. And everyone was like... "Oh, I like that!". We have a several areas just like that with hideous street presence all over our downtown and you NEVER see swarms of people in those areas lol, they do go to the the old, pedestrian friendly areas of downtown,,, even when nothing is open because those streets are so beautiful. People don't look at the reality of the space/rendering, they get fooled by the people placed in it by the designers and architects.

Large portions of this district do not pass that test. If you were the only one there, would you want to hang around and enjoy the space? Again, this space seems to be designed to rely more on people going there, not because of the space itself being atractive, but to go there because of some event or festival, not because it's an extension of part of a larger pedestrian friendly urban fabric, but because it's another "destination" type of thing.

[mhays]

Some of the best insights I've read in a while William.

[Reverberation]

I have seen these as well, and there need to be residents (not just people dropping half a million on fancy condos) to populate this. It's like they try to make a place where the whole is greater than the sum of all of its parts but decide to build the "whole" first and worry about the parts later. These kinds of things seem to work better in the suburbs where the majority of the population does the majority of its shopping the most frequently and when there are people living/working/going to school nearby all the time.

Big and ambitious downtown projects like these always seem to try to create activity out of thin air. I'm of the opinion that if cities want to have downtowns that are growing and dynamic and attractive to all types of people, they need to "grow-in" already desirable inner city neighborhoods gradually as opposed to trying to just plant people wherever they want them. If people are avoiding certain areas, it isn't because there aren't enough cheesy sports bars or concert venues or GAPs.

[Centropolis]

I think that the financing angle was risky from the start and KC lost the bet when the economy tanked. Now this is a somewhat busy nightlife spot on many weeknights and the weekends, I believe. It's just that it was pumped up to be more than it is, I think. Maybe if it had been much more mixed use and less of an emphasis on big, douchy stuff and (hey, come spend your money downtown, suburban people who would never dream of doing that otherwise) design and it didn't open right when the economy plowed into the ground, it would have worked out better. It's not like there are tumbleweeds blowing through on friday night because people are coming down, rather the numbers are jacked up.

[strongbad635]

I was in Kansas City last July for a convention and got to see this complex first hand. There are several reasons that it hasn't had the impact the city officials had hoped for.

1.) While they have brought a ton of retail and entertainment, there still are very few people who LIVE in downtown Kansas City. Off of the P&L District are some city streets that look right and feel right, but it's just ground-level stores and no residence above, next to, or even within proximity. Without a critical mass of residents in the area, Kansas City is never going to get the kind of patronage they're hoping for with this facility because nearly everyone who visits has to DRIVE in from the suburbs, which creates a huge parking problem.

2.) The vast majority of streets in downtown Kansas City are designed for maximum car speed and traffic flow, and are very pedestrian unfriendly. I was shocked how hard it was to walk even from the Crowne Plaza over to the Sprint Center. Several times I had to cross very wide streets with high curbs and speeding cars. I hesitate to even call them streets. They're automotive sewers.

3.) The P&L District, along with the adjoining Walnut and 14th streets, are just an island of good urban fabric within a sea of downtown Kansas City that is not pleasant to walk around. Tons of parking garages, blank concrete walls, and disorienting modern pieces of crap soaring hundreds of feet into the air. It's a good decision that I-670 was sunken down and bridges allow people to walk south to the next neighborhood, but it doesn't help matters when that neighborhood is a mish mash of building fragments and large areas of surface parking lots. The space is just not well-defined at all, and it's not pleasant to walk there, even when you know exactly where your destination is.

Kansas City seems to be a textbook example of Pensacola Parking Syndrome, where a city decides that in order to meet its parking needs, it must tear down some buildings and build lots, making the city simultaneously easier to drive to and less pleasant to be in. Eventually the urban fabric becomes so degraded that nobody wants to go there anymore, and the city can more than meet its parking needs.

If Mayor Sly James thinks that a single block of good urban fabric will magically revive Kansas City's downtown, he is in for a rude awakening. Kansas City needs a drastic, widespread makeover if it hopes to become the next San Francisco, Baltimore, or Boston in the urban renaissance movement.

[mhays]

I wouldn't say it's about downtown residents. It's about downtown residents, tourists, office workers, residents within the first ring of malls, suburbanites, etc. Each group has a different profile of the times they're there and what they buy. If you can draw from most or all of these groups you'll do well. But yes downtown residents play a key role...buying groceries, hanging out in restaurants even on slow nights and mornings, etc. They bring a vibe and variety that can help attract the other groups.

[J. Will]

Not being too familiar with downtown KC, I Google Mapped it and placed the marker randomly at about 15 different locations within the downtown. At no point did I see more than two pedestrians within a 360 degree view, and at many points I couldn't see a single pedestrian anywhere.

What are the main shopping/entertainment streets supposed to be in the downtown?

[ardecila]

My knowledge of KC is fairly limited, but downtown activity is diluted by a secondary office district at Crown Center and retail activity is diluted by The Plaza.

The very existence of Crown Center is very European... big city train station opens up in marginal location because downtown is too constrained... large-scale office district emerges near train station with poor connections to surrounding low-scale neighborhoods.

Functionally, though, Crown Center is far more like Uptown in Houston.

Power + Light failed because it's fundamentally anti-urban, by sheer force of being under the control of a single landlord. Everything about it feels artificial. Even in successful cities like Chicago and NY, festival marketplaces are destinations that cater purely to tourists. I don't even know many suburbanites that go to Navy Pier.

[Connect]

Originally Posted by mhays

Some of the best insights I've read in a while William.

Agreed. Nice commentary.

[Gerrard]

I was underwhelmed by the Power and Light district but the Kauffman Center was gorgeous.

[urbanactivist]

I lived in KC briefly and am quite familiar with it b/c my dad lives there, though he's out in the suburbs. It sprawls out to utter oblivion and is even more sparsely populated than Houston. But despite that, it's a great city with a beautiful and super historic core.

The problem with P&L is that it's a sore thumb in an otherwise great and natural development cycle. Inner KC is doing alot by itself to gentrify... The amount of new lofts going up in warehouse area is mind-boggling. P&L doesn't jive with this particular gentrification movement.

Secondly, it's a cheap, miniature knock-off of what inner KC already has... Westport and the Plaza are where you go to shop, stroll, hangout and see Christmas lights. The Plaza is the high-end shopping area. If you want less expensive mall fair, you go to Crown Center. So basically, shopping in the KC core was already "covered". With Sprint Center of course you want more retail, but it needs to be more local and organic than P&L has to offer. Why drive all the way downtown to go eat at Chipotle when there was already a Chipotle in your Suburban Lifestyle Center? If you spend all this money to head downtown for a concert, you don't want Chipotle afterward.

For 850 million, KC would have been much better off building a good rail line to connect downtown, Westport, Rockhurst/UMKC and Crown Center. Then encourage TOD around the stations. Boom, retail issues solved.

[urbanactivist]

As a general comment, downtown lifestyle centers are a hard sell, because it tries to be all things to all interested. It's the event center for those wanting that, the downtown chain lunch pad for those wanting that. The suburban mall for those wanting that. Because there's no real focus of the idea, these places typically underwhelm.

[Columbusite]

A suburban chain district: why wouldn't urban dwellers love it? These big expensive magic bullet developments have such a high failure rate and yet city "leaders" still turn up their nose at the advice of the urban enthusiast crowd. Be sure to give them a big "told you so" in person at city hall and that they clearly don't know better: we do.

[Centropolis]

Originally Posted by urbanactivist

Secondly, it's a cheap, miniature knock-off of what inner KC already has... Westport is where you go to shop, stroll, hangout and see Christmas lights. It's the high-end shopping area. If you want less expensive mall fair, you go to Crown Center. So basically, shopping in the KC core was already "covered". With Sprint Center of course you want more retail, but it needs to be more local and organic than P&L has to offer. Why drive all the way downtown to go eat at Chipotle when there was already a Chipotle in your Suburban Lifestyle Center...

I think you meant the Plaza, instead of Westport. Westport is more indie ( like a baby Logan Square in Chicago) and more bar/restaurant oriented and a mile or so north of the retail/ chain oriented Plaza.

[urbanactivist]

Originally Posted by Centropolis

I think you meant the Plaza, instead of Westport. Westport is more indie ( like a baby Logan Square in Chicago) and more bar/restaurant oriented and a mile or so north of the retail/ chain oriented Plaza.

My apologies... you are very correct. Though I always think of them together, Old Westport and The Plaza are separate entities, about a mile apart.