Royals mega-TIF could see Missouri taxpayers covering John Sherman’s entire $1.9B stadium tab

Also on Friday, the Kansas City TIF Commission issued its Downtown Stadium TIF Plan, spelling out in a bit more detail — though still far from complete detail — what public money will be going to a new Royals stadium if and when it gets final approval following the city council’s yes vote on Thursday. Having to dig through two separate financial documents in one day seems like it should be an OSHA violation; fortunately, veteran K.C. journalist Dave Helling has done a lot of the summing up already on his Substack, so we can use that as a jumping-off point.

• Before we get to Helling’s analysis, one technical point: Though the funding plan is described throughout as “tax increment financing,” it’s not a traditional TIF plan, which involves redirecting increased property taxes from in and around a development to help pay the developer’s costs. Since the Royals stadium will already be publicly owned and thus owe no property taxes, what Kansas City is instead looking at is diverting city sales, income, hotel, food and beverage, and other taxes from in and around the stadium district — making this a STIF (sales tax increment financing), or really a mega-TIF.
• The stadium will cost $2,051,249,065 to build, of which Royals owner John Sherman will provide $911,249,065. This leaves precisely $1.14 billion for the city and state to cover; it was thoughtful of Sherman not to force taxpayers to have to dig around for exact change.
• As discussed last week, the city will spend $90 million on infrastructure, with no specific funding source spelled out. Another $510 million will come from city mega-TIF tax money, a proposed 1% sales tax hike in a “community improvement district” of undetermined size — though as Helling calculates, all these combined are projected to “yield about $12.7 million annually, not nearly enough to cover yearly payments on a $510 million dollar debt.” (KCTV reports that an additional $128 million would come from raiding other city revenues, including restaurant taxes, gaming revenues, and parking revenues.)
• The state of Missouri will provide $254 million from the Show Me Sports Investment Act — an amount equal to all state tax revenue already being paid by the Royals — $50 million in tax credits, $35 million in “infrastructure contributions,” and $100 million in transportation spending.
• That leaves $101 million unaccounted for, which is listed in the TIF Commission spreadsheet as being from “other public sources.” As Helling writes, this “could be Missouri — the state already provides Jackson County $3 million a year for the Truman Complex; perhaps that’s part of where the money is coming from. Or it could be from Jackson County. Or some combination. Or not. It isn’t clear.”
• None of this counts: property tax breaks, which as previously noted could add half a billion dollars or more to the city’s cost [UPDATE: Geoffrey Propheter projects $325-375 million]; or the steeply discounted rent (just $1 a year) that Sherman would pay; or the cost of giving up all stadium revenues to the city’s billionaire tenant, including naming rights for a building that he wouldn’t own.
• Helling also mentions “undefined ‘redirections’ of $710.3 million from the ‘stadium impact area’ and another $259.5 million in ‘city funds,’ defined as the restaurant and gaming tax, on-street parking revenues, and revenue from ‘ancillary’ development.” Given that this is only mentioned in a chart showing “downtown stadium revenue projections, I think this isn’t additional public spending, but rather an attempt to make the taxpayer tab look better on the balance sheet by saying, “But the city will get to keep all the money we make from parking meters!” But, like Helling, I’m not 100% confident of anything here.
• Unlike in Tampa, there’s no “waterfall” fund; the TIF district dissolves once the stadium is paid off. Unless the city decides to extend it, obviously, which is a thing that tends to happen once team owners start sniffing around for additional upgrades down the line.
• Like the proposed stadium in Tampa, this one could be intentionally on the small side: the minimum number of actual seats is 30,000, with additional standing room. That could come as an unpleasant surprise to Royals fans, who turned out at an average of more than 30,000 a game as recently as 2016, and who have crossed that mark at three home games this year despite a last-place team. Expect higher prices at a new Royals stadium than at 38,000-capacity Kauffman Stadium, especially for big games or when the team doesn’t suck.

With all that in mind, it seems fair to conclude that the total public cost of the Royals deal is much likely to be closer to $2 billion than the reported $1.14 billion — making the $1.9 billion stadium effectively a free gift to Sherman. And, much like the Chiefs deal across state lines in Kansas, it’s a cost that K.C. and Missouri taxpayers can never hope to recoup just from whatever additional spending results from moving the Royals from one part of town to another. This race for most taxpayer-soaking MLB stadium deal to date is going to go down to the wire.