Study confirms downtown renaissance and value to KC budget

Issues concerning Downtown as described by the Downtown Council. River to 31st Street, I-35 to Bruce R. Watkins.
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Study confirms downtown renaissance and value to KC budget

Post by FangKC »

A study by the Downtown Council validates downtown's renaissance has benefitted the City.

http://www.kansascity.com/business/story/1755966.html
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Re: Study confirms downtown renaissance and value to KC budget

Post by KCPowercat »

great study but given the sponsor there was little doubt of the outcome :)  I'm sure it will be invalidated by some due to this...and they won't take anything stated as truth.
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Re: Study confirms downtown renaissance and value to KC budget

Post by dangerboy »

KCPowercat wrote: great study but given the sponsor there was little doubt of the outcome
And the author of the story :)
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Re: Study confirms downtown renaissance and value to KC budget

Post by shinatoo »

Can't argue with the hard numbers of 40% tax revenue increase downtown (23 mil) and 32% increase in the overall area. That is huge! What kind of place would the city be in during the recession if we had only grow 5% over the same period?
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Re: Study confirms downtown renaissance and value to KC budget

Post by KCPowercat »

so given these numbers, one could say the city budget would be in much worse shape had the p&l not developed and kc didn't have to pay out 12M to cover the bonds this year....that should blow the hater's minds.
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Re: Study confirms downtown renaissance and value to KC budget

Post by Hurst »

"so given these numbers, one could say the city budget would be in much worse shape had the p&l not developed and kc didn't have to pay out 12M to cover the bonds this year....that should blow the hater's minds."

Exactly KCPowercat!  These are just the hard numbers too.  No credit given for the subject things like people's perception of the city, future potential for conferences, tournaments, new jobs, the earnings tax being paid and to be paid, quality of life for existing residents, etc. etc. 
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Re: Study confirms downtown renaissance and value to KC budget

Post by aknowledgeableperson »

KCPowercat wrote: great study but given the sponsor there was little doubt of the outcome :)  I'm sure it will be invalidated by some due to this...and they won't take anything stated as truth.
Thanks for the invite.  Not going to invalidate the numbers but will put them into perspective.

Given the recent debate about the northland annexation shouldn't the budget cost of this dt revenue growth be added to the numbers.  Right away, even Dietrich says the $12M payment for P&L bonds needs to be factored in the revenue growth but he forgets the other necessary TIF payments.

Not all of that reported growth is "new" growth but revenues taken from other parts of the city.  In particular the H&R Block move from midtown to dt plus IRS employees moved from other locations in KCMO.  And, of course, the restaurant and bar taxes moved dt from non-dt KC businesses.

The Sprint Center has a big effect on the numbers.  Don't forget the hotel/motel tax increases used for its construction (quite a few rooms in the dt area).  And for every $1M in ticket sales $30,000 or so flows to the city in sales taxes.  Plus there are the sales taxes on food, beveages, and other sales in the arena.

It's too bad Collison wasn't more of a reporter than a downtown pitchman.  He should have questioned the numbers in the report in order to put some insight into them.  $23.4M minus $12M minus other dt TIF payments minus H&R Block minus other revenue transfers doesn't leave much if any overall positive effect on the city's budget last year, this year, and next.
Last edited by aknowledgeableperson on Thu Feb 18, 2010 11:10 am, edited 1 time in total.
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Re: Study confirms downtown renaissance and value to KC budget

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I also noted that Collison didn't mention that the Sprint Center has brought a significant increase in the number of concerts and events that otherwise would have skipped KC.  And that those events brought in people FROM OUTSIDE OF THE REGION who ate in P&L restaurants, stayed in downtown hotels and may actually come back from time to time.  Without the P&L it's likely that the real estate values would be far less than they are now due to the jump-started developement of the area because of increased traffic in the downtown/P&L district.  Not to mention jobs for servers, alcohol/food suppliers, etc or the upgraded infrastructure because of the P&L.

And who's to say that H&R Block would've stayed in the central city or MO without P&L subsidies and the untold dollars in spinoff (gas, lunch, dinner) dollars spent by employees?  AKP mentions the Sprint Center is a large part of the tax revenue - but attendees are spending money on food/drinks before and after the show...in the P&L - something not done on the same scale at Kemper.

Damn that article in the Star for being so blantantly pro-downtown development subsidy!  What a shame it doesn't continue to ALWAYS offer the negative side of the argument.
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Re: Study confirms downtown renaissance and value to KC budget

Post by chrizow »

AKP, at a child's 10th birthday party:  "happy birthday, susie!  enjoy it while it lasts, because you're GOING TO DIE SOMEDAY!"

susie:  (cries)

AKP:  "just saying!"
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Re: Study confirms downtown renaissance and value to KC budget

Post by aknowledgeableperson »

Nope.  But hopefully you can take bad news better than a ten year old.


Given how you replied guess you can't.
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Re: Study confirms downtown renaissance and value to KC budget

Post by KCPowercat »

figure it up for us akp...what are those other tif payments?

it's still going to turn into a net gain to the income to the city....and we have a new development that brings in outside people that weren't coming before....some people just can't accept good news.
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Re: Study confirms downtown renaissance and value to KC budget

Post by shinatoo »

So AKP, if some of the tax base moved in with HR Block and IRS, how do you account for the 32% oveallr revenue gain for the entire city?

Also the numbers were for sales and e-tax, they didn't include the hotel tax, which is a wash anyway since it is dedicated to financing the sprint center. Although it's not really a wash, but a net gain, because we now have a world class arena on the positive side of the cities ledger.

But, for arguments sake, we can look at that wash of hotel tax as seed money that netted us a 32% gain in tax revenue.

Again, we can't take out the TIF money because it's not just disappearing, it's paying for building stock improvements. Just like we cant say we collected no money in taxes because we spent them all on city services. Revenue is revenue and as long as it stays in the city it stays on the positive side of the books. Capital improvements are positive revenue because they add value to the city. Your argument is "we can't count the rise in taxes that went to TIF because we spent it." That rise wouldn't have been there at all if we hadn't used TIF. More of an outrage would be money we spent on legal fees and consultants that left the community to go into someones house in LA or New York. New money that comes into KC and is spent on improvements in KC are a gain for the city. And, no, the profits of that tif that left city and went to the PnLs parent company in Baltimore is fractional and know cost that the city was willing to absorb. if counting the TIF as a loss we still are sitting on a 2:1 gain, which are odds I would take any day.

I know it sucks to be wrong, as I've been there many times, but it's time to admit your wrong, or at the minimum, stop trying to extend your failed argument. 
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Re: Study confirms downtown renaissance and value to KC budget

Post by aknowledgeableperson »

shinatoo wrote: So AKP, if some of the tax base moved in with HR Block and IRS, how do you account for the 32% oveallr revenue gain for the entire city?

Also the numbers were for sales and e-tax, they didn't include the hotel tax, which is a wash anyway since it is dedicated to financing the sprint center.  
One, look at the development at 135th and State Line plus the development north of the river.  So there is quite a increase in those locations that on a percentage basis may be greater than what happened downtown.  And given that the total downtown income to the city budget is just $80.8M and the city-wide e-tax collections is $200M it would appear that downtown is just a small piece of the city's revenue source. 

Two, according to the article the revenues were for all taxes, not just the two you listed.
A study by the Downtown Council, an association of business and property owners, reports total city tax revenues generated downtown, including the earnings and sales tax
Bold inserted by me.

So you are wrong.
but it's time to admit your wrong
And with regards to TIF's, much like for the IRS facility, a good portion of TIF costs went to parking garages, something the city needs more of.

figure it up for us akp...what are those other tif payments?
You will find those numbers in the city's budget.

And I can accept good news.  It's just that on the whole there isn't much to the good news when you look at the numbers behind the numbers.  Such as, given that the total downtown income to the city budget is just $80.8M and  the city-wide e-tax collections is $200M and property taxes is $170M and sales taxes is $150M it would appear that downtown is just a small piece of the city's revenue source.  And over half of the reported gain will go to debt service ($12M of $23.4M).  And some of that gain remaining after debt service is from the relocation of H&R Block and some IRS workers.  Wow.
Last edited by aknowledgeableperson on Thu Feb 18, 2010 6:16 pm, edited 1 time in total.
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Re: Study confirms downtown renaissance and value to KC budget

Post by FangKC »

There is also the argument to be made regarding what would have happened if nothing had been done downtown--if it would have been allowed to continue rotting.

What probably would have happened had the investment not been made in renovating old buildings into housing; the new public library, P&L, Sprint Center, PAC, Star press, IRS, new Fed, renovating Bartle, the new ballroom; reopening the President and Aladdin hotels; etc.?

It is likely that even more companies would have moved out of downtown, and many of them, probably to the Kansas side.  So it's not just an argument about new revenue gained, it's an argument that even more tax revenue would have been lost.

I'd also like to use the Country Club Plaza as an example. It has remained a draw for the region for more than 70 years. What is the lesson?  The owners, over time, have continued to make reinvestments in the District--renovating and expanding it.  One cannot remain stagnant. One cannot let the asset deteriorate. For a time, Country Club Plaza was well on its' way to replacing downtown as the center of the City. Law firms were leaving downtown for there. The Board of Trade had.

Had this happened, at what point would companies that stayed downtown have finally given up and moved? Would Great Plains Energy, KC Southern, Stinson Morrisson & Hecker, Commerce, UMB, Midwest and Missouri bank headquarters be on the Plaza now?  Would the IRS, State Street, the Federal Reserve, Barkley Evergreen & Partners, Andrews-McMeel Universal, DST, J.E. Dunn, AMC, BNIM, HNTB, and HOK be in Overland Park? Would the Kansas City Star press now be in Clay County?

In this argument, these questions have to be asked.
Last edited by FangKC on Fri Feb 19, 2010 1:05 am, edited 1 time in total.
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Re: Study confirms downtown renaissance and value to KC budget

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aknowledgeableperson wrote: You will find those numbers in the city's budget.

And I can accept good news.  It's just that on the whole there isn't much to the good news when you look at the numbers behind the numbers.  Such as, given that the total downtown income to the city budget is just $80.8M and  the city-wide e-tax collections is $200M and property taxes is $170M and sales taxes is $150M it would appear that downtown is just a small piece of the city's revenue source.  And over half of the reported gain will go to debt service ($12M of $23.4M).  And some of that gain remaining after debt service is from the relocation of H&R Block and some IRS workers.  Wow.
No you don't get off that easy.  You want to refute the study, you come up with the actual numbers from the budget from TIF, etc. to support your claim. 

FYI, 80M is not the 'total' income, just sales and e-tax, after what is paid out for TIF development and not including property taxes.  Downtown is far from a "small source" given it's small geographic area.....and it's impact to attract monies outside of the KC metro...something your neighborhood does nothing to advance.  Keep being a KCMO line item expense, some of us will continue to move this city forward.
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Re: Study confirms downtown renaissance and value to KC budget

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I wish somebody would study what KCMO would be like today had the city not invested into Downtown, or even tiffed some of the retail up north to build roads or get projects like Briarcliff done.

I am still convinced that if KCMO had just gone on like it was in 1990, the city would be in FAR worse shape and have a much bigger deficit than it does today, only it would have a horrible downtown, a rural northland etc to show for it.

If KCMO is 70 million in the red today, I think it would be 100 million in the red had the city not done what it did.  When will people in KC realize that the city needed to spend some money on itself?
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Re: Study confirms downtown renaissance and value to KC budget

Post by aknowledgeableperson »

KCPowercat wrote: FYI, 80M is not the 'total' income, just sales and e-tax, after what is paid out for TIF development and not including property taxes. 
The quote in the article
A study by the Downtown Council, an association of business and property owners, reports total city tax revenues generated downtown, including the earnings and sales tax, jumped 40.8 percent between 2002 and last year, from $57.4 million to $80.8 million.
If $80.8 is not the total income, as the article describes it, then what is the total income?  It says "total city tax revenues generated downtown, including the earnings and sales tax".  It does not say the amount is a net amount after whatever, it says it is the total amount generated.  And it says the amount "includes" sales and earnings taxes, not just those taxes.


I am not refuting the numbers but you seem to since you wish to change words contained in the quote.  I am just using the numbers in the report and how the article describes and uses them.  It is up to you to prove your stance that instead of "total" the report says "net" and "after TIF payouts".  For me "total" would also include property taxes instead of "not including" as you say.   And I am not sure how you get the word "just" instead  of "including".
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Re: Study confirms downtown renaissance and value to KC budget

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goodness...ok, yup your right.
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Re: Study confirms downtown renaissance and value to KC budget

Post by KCPowercat »

Just to remind you of everything you "dodged"
No you don't get off that easy.  You want to refute the study, you come up with the actual numbers from the budget from TIF, etc. to support your claim.

Downtown is far from a "small source" given it's small geographic area.....and it's impact to attract monies outside of the KC metro...something your neighborhood does nothing to advance.  Keep being a KCMO line item expense, some of us will continue to move this city forward.
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Re: Study confirms downtown renaissance and value to KC budget

Post by Major KC Fan »

Just want to add my own observations about the effect of the ongoing revitalization of downtown.  I live in the burbs and have always been a downtown booster as I see the core representing the entire metro.  Since the recent efforts downtown like the Sprint arena, P & L  and new housing, I continuously talk to friends, acquaintances, etc. that are now spending time and money downtown that would never have done so previous to the improvements.  As an example, I now have a large number of friends that will try to see movies at the Mainstreet first vs. other theatres.  That's money that is now going to downtown and KCMO that would have previously gone to other areas.  Likewise, visitors to the city are now spending their money at events at the Sprint arena and other improved areas downtown.  This positive word of mouth from both locals and visitors can only result in an increased visibility and utilization of the improved facilities, a good thing for the area overall.  It would behoove all of us that care about our area to both patronize and promote our new downtown to both locals and visitors--the money will follow!
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