With the Milwaukee Bucks owners proposing a $1 billion arena-plus-entertainment-district that could be partly funded by kicked-back property taxes on the entertainment district part — a TIF, in other words, with the arena only excluded because it wouldn’t pay property taxes at all — the Milwaukee Journal Sentinel’s Don Walker took a look on Saturday at Kansas City’s Power & Light District, which has a somewhat similar funding scheme. And he found good news and bad news:
Today, the eight-block Power & Light District is a destination for Kansas City residents with themed bars, fine-food restaurants, shopping, a live outdoor entertainment area and a huge high-definition television that broadcasts sports to passers-by. The half-million-square-foot district is anchored by the world headquarters of H&R Block and the Sprint Center, the city’s multipurpose arena that opened in October 2007.
City manager Troy Schulte said that, in the first few years, the district was generating about $5 million in tax revenue, leaving a $15 million gap that had to be filled from the city’s general fund.
That’s way less good!
Now, you can make a case that even if it’s costing the city some money, it could be worth it in order to revitalize Kansas City’s downtown, give locals some more entertainment options, and the like. (In fact, K.C. councilmember Ed Ford makes exactly this case, telling Walker that “if I could go back and someone had told me at the time this would transform downtown but it will cost $15 million more a year on top of the super tax-incremental financing district we had, I would support it.”) But $15 million a year is a lot of money: That’s enough to finance maybe $225 million in improvements, meaning the city is forgoing that much in other spending in order to pay off the Power & Light District — and that other spending could be on things that were even more beneficial to city residents and their economy. Plus, even a good chunk of that $5 million a year that the district is providing in TIF taxes is likely being redirected from spending elsewhere in town, so some of that is a loss for the city as well. And if the entertainment district is this successful, it’s possible that a developer would have been willing to do it for a lesser subsidy — meaning K.C. could potentially have had its downtown destination and eaten its tax revenue, too.
Finally, all this leaves out the Sprint Center itself, which is losing about another $12 million a year for the city, and which never lured a pro NBA or NHL team as it was promised it would do. All in all, that’s a pretty expensive way to turn your downtown into a nightlife district — I’d love to see the cost-per-job numbers, but Walker doesn’t provide those — and a cautionary tale about how expensive subsidized developments can be, if anything. Hopefully Milwaukee residents and newspaper editors understand that —
If the $500 million arena came as a part of an overall downtown development deal – one which benefited the city and Milwaukee County as a whole, not just the Bucks — we’d be much more amenable to state taxpayer money going toward this initiative.