I have written extensively on how poorly conceived the Royals' efforts to build a new stadium have appeared. Recent reporting shows that they’re no longer the sole contenders for the “biggest impediment to the development of a new stadium in Kansas City” award. Frank White has definitively entered the running.
White, as you probably know, used to play for the Kansas City Royals. He was a very popular player and remains only one of only four (counting Jackie Robinson) individuals to have his number retired by the Kansas City Royals. Now, as Jackson County Executive, he’s playing hardball with the team again, this time as the lead negotiator for the county as they attempt to determine how the public might participate in the proposed construction of a new baseball stadium and surrounding real estate project.
A couple of weeks ago reporting by the Kansas City Business Journal ($) indicated that the Jackson County government was pushing back on the Royals’ desire to acquire public funding in the form of an extension on the currently existing 3/8 cent sales tax. That charge was led by Frank White.
But while the Royals privately have expressed interest in a 40-year extension of the sales tax, Jackson County’s overview does not specify a funding source for the proposed $300 million contribution. The counteroffer came days after county officials began publicly floating possible alternatives to a sales tax extension.
New reporting from the Kansas City Star this week suggests that White’s office conducted an analysis indicating that the true costs to the county might far exceed that $300M dollar number, especially if it comes in the form of the sales tax extension proposed by the team.
It’ll be more like $4.4 billion to $6.4 billion, if the stadium sales tax and other payments required by the current lease agreement extended 40 years beyond its expiration date in 2031, as the Royals have suggested.
That number is probably bogus. It’s not entirely outside the realm of possibility - the new stadium in Miami is likely to end up costing the public there four to five times the original estimated cost (and that doesn’t even include all the other, less obvious costs we’ll get into in a moment) because of the way it was funded. It should be noted that the Royals are essentially asking for the same plan where the county would sell bonds and then pay those bonds back, with interest and inflation, via the continuation of the 3/8 cents sales tax.
The Miami situation is an outlier; the timing was awful and other poor decisions were made that exacerbated the situation. Of course, looking at how things have gone to this point, I’m certainly not going to completely dismiss the possibility of worst-case scenarios coming to fruition here, too. Even so, that’s a far cry from deeming that scenario likely, which seems to be White’s stance.
As the Star article notes, the costs for these things are always greater in the end than the amount discussed because of inflation and interest. However, the biggest revelation in the memo, at least for me, is the proposed increase in insurance payments for the new stadium.
But what shocked Schulte was the $2.9 billion that the county would spend in increased insurance payments for the downtown ballpark over those four decades. “The property insurance costs are staggering,” Schulte wrote, “given that our current below market costs of property insurance (but still expensive) will need to be adjusted to actual value when a new stadium is opened.”
Not unexpectedly, there’s some question about the realism involved in determining that number, too. The memo estimates insurance costs would go up 10% a year, which seems a bit excessive. A point made by Republican legislator Sean Smith.
“I will say that some of the inflationary numbers look too high. Not even insurance goes up by 10% per year,” Smith said.
Still, while White’s numbers are almost certainly exaggerated and need to be taken with some measure of salt, the point that stadium costs will go beyond whatever up-front number the team and county ultimately agree to is quite salient. As our own Max Rieper noted during a recent episode of the Royals Rundown Podcast, infrastructure is going to need to be updated to accommodate the new project(s) as well, which likely comes with an additional cost that doesn’t seem to be explored anywhere in this memo.
In the end, while I wish White was using numbers that were more realistic, I have to admit I’m enjoying the schadenfreude of the Royals being forced to negotiate with someone who appears to still be angry at them for firing him from his broadcasting role and withholding the managerial role he similarly coveted. I also appreciate a local politician doing anything other than promptly rolling over when a sports team proposes a “public-private partnership” on a new real estate development project disguised as a stadium, even if he might not be doing it for the reasons I wish. As I always tell people who insist my position that stadiums should be constructed with as little public funding as realistically possible is unfeasible,
You gotta start somewhere.