The Beacon ran a long article late last week about the Kansas City Royals stadium proposal that includes a bunch of worthwhile analysis of the deal, including why using taxes from in and around the stadium isn’t really the project “paying for itself.” (“Some ballgame attendees might be going to a Crown Center restaurant instead of a Waldo restaurant that day. That shift in economic activity within Kansas City is a net neutral from a tax revenue perspective.”) But the most interesting part is buried many paragraphs down, in a discussion of the type of bonds the city plans to use to borrow $600 million for stadium costs and why:
Kansas City intends to issue these Royals bonds as “special obligation bonds,” as opposed to revenue bonds or general obligation bonds. That means that the city is essentially promising to pay back a certain amount of money every year…
If the city wanted to get a lower interest rate, it would have needed to take the stadium proposal to a public vote — either for a sales tax as Jackson County did or for general obligation bonds, using property taxes.
The going interest rate for K.C.’s special obligation bonds, reports the Beacon, is 5.725%, compared to 4.25% for general obligation bonds. Applied to a $600 million loan, this means that Kansas City is going to be spending about $7 million a year extra on stadium bond payments in order to avoid a public vote. That’s money that, if it were used to finance other city spending, could cover about $117 million in different public needs, if the city had gone the voter-approval route for the Royals project. But you can’t put a price on not letting the people vote, or rather you can, and that price is $117 million.
In other evading-democracy news, meanwhile, Mayor Quinton Lucas’s rush to get a Royals deal down on paper before anyone could try to force a public vote seems to have run afoul of another small matter: the residents of a 33-story apartment building adjacent to the stadium site who say the project would be infringe on their property rights, and who are now suing to block part of it.
According to the lawsuit filed Monday in the Jackson County Circuit Court, the [San Francisco Tower] condominium’s association is seeking a temporary restraining order and an injunction against three defendants — the city of Kansas City, the Royals and Crown Center — for protections over its longtime easements and property rights.
Some of the property rights include:
- An approximate 0.835-acre central mechanical plant and maintenance shop;
- A transformer and primary switchgear rooms;
- Utility tunnels, including a 24-foot-wide tunnel under Grand Boulevard;
- A pedestrian bridge;
- A 400-space parking garage
- A passage over San Francisco Garden.
The association states that plans for 68-acre ballpark district show the tower surrounded, as well as the stadium approximately 100 feet from the condo’s entrance.
All this building infrastructure is on Crown Center property, but the condo association says it has easements in place guaranteeing it the right to use the property for this stuff. The residents say they’ve been trying to negotiate with Royals execs, the Crown Center, and the city since May, to no avail, and so are seeking a restraining order and injunctions against the part of the project that would infringe on their rights, though they’re not seeking to stop the project overall.
This is all pretty embarrassing for Mayor Quinton Lucas not to have addressed sooner, but then, crossing all his t’s in a timely fashion doesn’t really seem like one of his core strengths. Lucas said yesterday that he “will support all parties in reaching an amicable resolution whether through the Court’s declaration of rights outside the stadium footprint, as sought here, or through alternative dispute resolution.” No word yet on whether an injunction might have any impact on the inevitable lawsuit over whether a public ballot measure will be ruled to come too late to overturn the stadium plan, assuming voters give it a thumbs-down; governance is too important to be left to the masses, which is why we instead leave it to bond financiers and city lawyers, apparently.
The condo association lawsuit is at best a negotiating tactic. No Jackson County judge will ever rule against the political class. They will not rule against those who gave them their jobs.
Agree. Their easements can be bought through eminent domain. They are just trying to make the check as large as possible
Can they? Legit question as some states don’t allow eminent domain for a project like this.
It’s a great point Jay. And even if the state/county does allow it, the amount of money needed to buy out a 33 storey apartment building and, presumably, tear it and it’s infrastructure down is not small even in context of a $2-3Bn giveaway to John Sherman.
It would be interesting to see the property tax assessment/appraisals for the dwellings and other spaces in that development. Unless Lucas included this amount under “general” in the theoretical/nonexistent budget for the stadium, this could easily add 7-10% to the total cost. And it could involve years of litigation as well.
Am I the only one who read “alternative dispute resolution” and immediately thought of firearms? Lots and lots of firearms???
I was imagining cash being rained down on someone!
This is how the state of Missouri operates. They don’t care about what the voters think or how they vote.
They will overturn or ignore the will of the people. Pathetic.