Could the P+L be a flop?

[frankthetank]

I was watching a show on KCPT (Maybe Kansas City in Review) where they were discussing the possibility of the P+L District being a flop costing the city millions of dollars. With a possible downturn in the economy on the horizon (layoffs) and the real estate market coming to a screeching halt...is it a possibility?

[KCPowercat]

Sure...anything can fail.  I don't think with a developer like Cordish and their track record that it's likely.

What economic downturn?

[voltopt]

Economic downturn?
With democrats in Congress?

[markf]

I didn't see the show but they may have been referring to the margin of error on the bonds.  BlogKC spells it out.

http://blogkc.com/archives/2006/12/powe ... in-margin/

[Gretz]

Economic downturn?
With democrats in Congress?

The US economy is slowing.  2006 GDP growth was at 3.3%, 2007 forecast growth is 2.1.  It is also very possible that a faster skidding housing market could cause the economy to slow much more sharply as consumers lose value on their property and stop spending.  A greater risk is that the dollar continues losing value or accelerates even causing foreigners to lose confidence in the dollar as a reserve currency, forcing interest rates to climb significantly to attract foreign capital to finance our current-account deficit, currently at a whopping 6.8% of GDP. Furthermore, for the short and medium term certain long-standing, unsustainable imbalances suggest a period of slower, European-like growth over the next 5-10 years as our negative savings rate and current account deficit correct themselves.  The democrats coming into to congress doesn't have anything to do with this and can't stop it unless they can go back in time 15 years and stop the credit binge of the 90s and first half of this decade. 

[kard]

frankthetank, meet AKP.  AKP, frankthetank.

[MC86]

and stop the credit binge of the 90s and first half of this decade. 

That brings me to my favorite SNL skit of all time.

http://www.mypartypost.com/watchvideobi ... ying_Stuff

[WinchesterMysteryHouse]

How could the P+L flop?

[frankthetank]

Nice reiteration winchester.    I am not saying it will. On the contrary... I hope it makes downtown explode into development. I am just telling you what I saw on the tube. We have a tendency on this forum to be "ultra positive". Just letting everyone know there are naysayers out there. I think IF Cordish can't find a tenant, IF condos don't get built and there is nonone living downtown to patronize these stores other than tourists. These are big Ifs.
Now before replying....take a few deep breaths and repeat "serenity now" 10 times. 

[KCPowercat]

This forum is ultra positive?  I tend to find it to be very sensitive and negative to little things that 99% of the world would never even think about.

[ComandanteCero]

I agree with frank that regardless of quibbles we might have over relatively small stuff (i.e Gimme Sum's name) we all (except maybe for AKP) seem to be assuming that the district will in fact be a success.

Reasons i think it will work:

1) The market is there.  The original proposal for the P+L district that Stan Durwood had been pushing for was about four times the size of what is currently being built, the city was still willing to go ahead with it because of unrealistic projections at that time regarding demand.  When the city decided to do some double checking, and hired an independent retail consultant out of California, they brought back a report saying they had unrealistic retail projections, and it would need to be drastically downsized to be feasible.  The result was that the project was dead for a number of years until the present incarnation with Cordish started shaping up.  I feel a hell of a lot more confident about this because not only is it roughly a quarter of the size of the original projection (in line with the realistic projections of demand from that old retail study), but also because Cordish is an experienced operator in these kinds of districts, and seeing the success of their other development I have a relatively good amount of confidence in them that they know what they are doing in creating these districts: making sure it's the right size, the right tenant mix, and advertised to the right group.

2) Synergy.  There's a lot of peripheral activity in terms of residential and commercial redevelopment in the general downtown area, along with completely new large scale destinations (such as the Arena and PAC).  I don't necessarily think they will single handedly support the district, but they have a done a great deal in terms of making downtown as a whole a more attractive and vibrant place.  The district doesn't have to try to be a self contained world trying to stay afloat in a troubled and decrepit downtown, instead it gets to be surrounded by an area very much on the upswing, so that all the positive press that will continue to surround the area will only help make the district a success.

3) First Fridays.  This may be a more subjective argument, but i really believe there lots of people in the metro who want to come downtown, but haven't had a reason yet.  Who wouldn't want to experience a vibrant downtown?  Who wouldn't want to be able to park their car and walk around in a pleasant and urban area where there are things to do and see.  There are lots of people from all around the metro who would like to see downtown come back, and just need an excuse to visit and hang around.  I personally know that there is close to a 0% chance of getting my family to park the car downtown (in the loop) and take a walk around, and i don't blame them.  It's not an exciting or worthwhile activity right now.  I am almost 99% sure that once the P+L district opens up, my family would do it in a heart beat.  I know this because they've been happy to walk around the Crossroads on many a First Friday, even though they aren't buying or eating anything, and I've seen dozens of curious suburban families doing just the same (often awkwardly).  They just like the sense of walking about in an urban area with lots of people going about, and different activities going on. 

Reason the P+L could flop:

Basically, if the arguments above turn out to be wrong.  And/or security issues that lead to a bad reputation.

[KCMax]

I agree with CommandanteCero. That's a great point about First Friday. I think people, particularly young people, are looking for a reason to come downtown.

One worry I have is the sudden boom in entertainment districts throughout the metro. Although I don't see them as THAT big a threat and instead will create more tourists, a part of me does worry there will be a significant part of the KC population that says "why suffer the crowds and crime of P&L when I can just go to Zona Rosa/Legends/Crackerneck/etc."?

[KCPowercat]

better tenants and the arena drawing people in would be my answer Max.

Plus P&L has a built in 100,000 workers that will use the P&L during business hours.

[aknowledgeableperson]

Yes, in a poll I voted that it will be a failure but my vote was a joke that went with a joke of a poll.  Anyway, it will not be a failure or a flop but it will not be a big, great success that many think it will be.
Why?  Mainly because of the competition in the KC area marketplace.  Yes, it has a lot going for it but it also has a lot going against it.  For many it will be just one option in the retail, dining, entertainment destinations among the many options KC area residents have to choose from.  Yes, it will have the convention and arena trade but not all convention goers stay in the dt area and will choose an area closer to where they are staying for these options and even if there is a 40 game tenant in the arena it will probably be dark for two nights for every night there is an event.

KCMO went very far out on a very thin limb for this project.  It will very likely not met the revenue projections used to justify the project and the city issued bonds to help pay for it.  Therefore, the city's general fund and other funds will make up the difference.  What it costs the city for this shortfall is to be determined and will it really be worth the cost to the city?  How much business will it take from other businesses in the city that do not have the benefit of the financing used and therefore remit less taxes to the city?

[chrizow]

akp:  tell me this.  if you were a resident of any other city that has tried to revitalize their downtown via arenas, entertainment districts, etc., would you be posting the same stuff on forums discussing those cities?

let me answer:  yes you would, b/c you see yourself as the Grand Voice of [Naysaying] Reason..

nothing is guaranteed, but for the most part Cordish has delivered what it promised - a nice touristy packaged district in forlorn downtowns (baltimore, houston, louisville, etc).  those places have just as many other distractions and tourist areas as KC, probably more, and they seem to be successes.  KC has a lot of momentum going on downtown right now, and Cordish's district is a part of that.  i see no reason why it wouldn't be a success.  will it be mobbed with 100,000 people every weekend?  hell no, but it'll make money for everyone involved, all of whom know more about these things than you, me, or anyone on this site.

[aknowledgeableperson]

First, I have been a resident of the KC area my whole life.  So I will not speak of other dt areas.

Yes, Cordish has delivered most of what has been promised but each municipal area is different for each other municipal area.  Even the person opening Famous Dave's realizes he is taking a chance, just like the others moving into the area.  Success is not guaranteed.  The Plaza area is not going to close up just because the P&L district is there. JoCo is still going to do its thing and more.  VW will still fight and will be able to go 15 rounds.

About the only people guaranteed to make money will be Cordish, others realize there is a business gamble being made.  Besides success will mean different things to different people.  Will it still be open?  Yes.  If one tenant leaves will another take its place?  In time, yes. But if you measure success by bringing in more tax dollars than the cost of the bond payments to the city then I think the answer will be no.  Will it create new business and revenues to the city instead of just moving the financial pie around I think the answer will be no.

[chrizow]

i think it's really indicative of your "status quo" attitude that you feel perfectly comfortable predicting with apparent certainty how the plaza, joco, and village west will perform in the future while pooh-pooh-ing the prospects of the P+L. 

[kard]

The goal of the PnL (and the arena), besides making money, is to make Downtown a more exciting, convenient place to live for young people--who are the future of any city.

It will do that.

[LenexatoKCMO]

The democrats coming into to congress doesn't have anything to do with this and can't stop it unless they can go back in time 15 years and stop the credit binge of the 90s and first half of this decade. 

Go back and take a close look at the last 50 years worth of economic cycles and compare it to who was in office over the same span.  It may be completely illogical, but the correlation is airtight.

[Slappy the Wang]

Aside from financial flopdom, would you guys consider it a flop if it attracted the Bennigans/TGIFridays crowd?  Is there a chance it will become the CiCi's Pizza of the KC shopping scene?