So you think the existing Denver light rail system had a positive NPV (lets say at a even modest 8% discount) upon completion? Huge capital investment and a very protracted return on that investment - I seriously doubt it. Does it hurt the city? Would you say it has no tangible benefit to to the city?

And please cool it with the insults.

We're not talking about the Denver light-rail system. We're talking about the P&L and in particular about the claim you and several others have made in this thread that it will turn out to be a net financial gain for the city.

I'll stop insisting that those making that argument are financial ignoramuses when they stop making that argument. I suppose I should just take the time to reconstruct the post I wrote several weeks ago (that the board ate) in which I outlined most of the calculations. ...

And let me emphasize, again, that I am peeved at the city's unusual and very unwise financial arrangement with Cordish, not at the development of P&L per se or at city-backed redevelopment in general. Like pretty much everybody on this board, I am broadly supportive of urban redevelopment projects. But I am not an "at all costs" supporter. Ignoring or, worse, consenting to stupid public finances is the worse thing you can do if you want to see the city's dollar go as far as possible to reviving our city.

2 things....p&l costs to the city are largely the garages and infrastructure...not the buildings on top. The city maintains ownership and management of that infrastructure. P&L and Cordish goes away tomorrow, the city still has capital there.

2nd, go ask downtown businesses, especially CVA and hotels how much the P&L has brought in that would have skipped KC had it not been there....those are the extras talked about that can't be "realized" when looking at P&L district tax sales.

The redevelopment of downtown has to be done in steps, and the long-term payoffs are probably years away.

The first step was to grow the downtown population, and renovate empty structures into housing.

The second step was to improve what existed. Renovate Municipal Auditorium and the Music Hall. Renovate and modernize hotel stock. Expand Bartle Hall and add the ballroom. Renovate Union Station. Renovate and expand the old Pershing Post Office, and find new use for it (IRS).

The third step was to clear all the blight, obsolete buildings (Jones Store) and lots, and build the infastructure that would support later development (new streets, sewers, water pipes, utilities, street lamps, garages). Improve 12th Street corridor, and slowly expand to improve street conditions outward.

The fourth step was the clean up downtown overall, and introduce the CID and city ambassadors (bumble bees).

The fifth step was to build P&L and introduce new buildings and retail that didn't exist before. Build a downtown grocery store.

The sixth step was to revitalize downtown as the cultural, entertainment, and performance center of the metro. Draw more people downtown. The new Central Public Library and its' regular programming of events. Repositioning the Midland as a live performance center. Renovating and opening the Mainstreet Theater. Adding the reperatory theatre and the performing arts center. Adding KC Live stage, and Sprint Center. Adding City Market concert series. Promote art events downtown. Renovate the Union Station powerhouse into ballet dance center. Expand the WWI Museum at Liberty Memorial. Build the College Basketbell Experience. Build SeaLife aquarium and Legoland at Crown Center. Kemper Museum of Contemporary Art has opened a Crossroads satellite.

The sixth step was to begin building new housing from scratch near P&L: Market Station, East Village Apartments, City Homes in the River Market, and the proposed Cordish apartment building at 13th and Walnut. And hopefully later, the other apartment buildings proposed for P&L along Truman Road.

The seventh step is building the streetcar line to enhance downtown travel and promote economic development opportunities along the corridor. The next phase will be to expand it to the Plaza.

The eighth step will probably be to being building density again inside the Loop and greater downtown, and begin to draw companies back downtown and increase the worker population. The Make Grand Grand landscaping plan is part of improving the physical infastructure and ambiance downtown. This includes the goal of doubling the downtown residential population to around 35,000, which many believe is necessary to support downtown retail. Centralize federal workers downtown. Many believe the streetcar line is essential to doubling the downtown population. The Housing Authority of KC moved from Midtown to downtown.

I think many of the steps have accomplished goals already.

People are coming back downtown in numbers one would not have thought possible 20 years ago. The Crossroads Arts District, the PAC, Sprint Center, the Copaken Stage, and Midland are drawing thousands of people back into the City. Union Station is curating events that are drawing people from outside the Metro.

All the pieces of the puzzle are slowly being put into place to make downtown Kansas City grow again.

Inside the Loop itself, there are only a few buildings remaining to be renovated: Brookfield and Argyle buildings, the former Power & Light Building, the Midland Office tower, the Lyric Theater office space, the former Federal Reserve Bank, the Pickwick Hotel, the Grand Avenue Temple office building, the former Insurance Building at 10th and Oak, the Board of Education Building, and one might even count the Savoy Hotel.

There is a long-range redevelopment plan in place for the East Village.

One boutique hotel is set to open soon. The Ambassador Hotel in the old Gate City National Bank Building. The former Federal Reserve Bank is being proposed as a second boutique hotel. Hilton has already expressed interest in expanding its' footprint in downtown if the proposed convention hotel gets built. Sporting Innovations is taking over the former Hanna Rubber Co. building and plans to add a new addition to it. The UMKC Conservatory of Music and Dance is considering creating a downtown campus. A new downtown school will open next fall on Central next to the Lyric Theater. There is talk of building a new central YMCA center downtown.

J.E. Dunn, H&R Block, the Federal Reserve Bank of Kansas City and Populous have built new headquarters buildings downtown. Boulevard Brewery and The Roasterie have expanded on the West Side.

UMKC has plans to build 300 units of on-campus housing on Hospital Hill near Troost and 24th Street, and 20 new houses in Beacon Hill.

On the periphery, Kansas City University of Medicine and Biosciences is expanding their campus. Samuel Rodger's Health Center has constructed a new clinic building nearby. UMKC has a new School of Medicine building and Health Science Center on Hospital Hill, and Children's Mercy Hospital is expanding. UMKC has also announced the goal of adding a grocery store nearby.

The demand or housing downtown is healthy, and the vacancy rate is around 5 percent. Once the last existing buildings are renovated, and the streetcar line is operating, I think you will finally see demand for new apartment, retail, and office buildings begin to emerge--especially along the streetcar line. This pattern of growth has occurred in other cities.

Everyone wants the P&L District to be successful right now. I understand the impatience. One has to remember that it took decades for the Plaza to become the successful district it is today. It was not all built at once, and was developed piece-meal slowly over time.

The KC Business Journal had their ranking of the top attractions in KC based on attendance.

On the top of the list...P&L District with 9 million visitors in 2011 almost triple the number from the number two spot, which is Ameristar at around 3.3 million.

Before the P&L District what did that area bring in? A few thousand a year? If that much. Who would have thought that the change could be so drastic and as quickly. Where would KC be if they left this area to grow organically? Most likely attracting only a few thousand a year, which is most likely people parking in the lots for conventions.



http://www.bizjournals.com/kansascity/n ... ge_gallery

That makes me wonder what the average person spent at visits to P&L and Ameristar. P&L casino? Hrmm.

A casino would be a bad idea in my opinion. I believe there is a limit in MO now on how many casinos can be allowed, but how long does the Isle of Capri have? Does it do well? I believe it's pretty much at the bottom of the list based on revenue for casinos in the area, but I could be wrong.

Yeah, and I'm pretty sure the "boats in moats" thing is still law. But if Pile of Debris were to shut down, I think a P&L casino might be a good idea. Legally impossible without going to the state, but a good idea. I bet if nothing else we could say goodbye to revenue shortfalls, heh.

Just wonder how the 9,000,000 was computed.

9,000,000 / 52 weeks = 173,077 people per week.

9,000,000 / 365 days = 24,658 people per day.

Counting people working at H&R Block? Counting employees at retail places? People just walking through going from one place outside to another place outside? Not saying it might not be #1, just questioning the count.

I only have access to the free portion of the report, which I could not see their methods of research. If someone has a subscription and has the time to post an answer to AKP's question that would be great.

I wrote a paper several years ago that cited Cordish attendance figures/estimates on attendance at P&L and it was also 9 million, so I wonder if its just an estimate they always use without really trying to figure out if it goes up or down.

Then that's some sloppy reporting from the Biz Journal if they are using an estimate that Cordish has been providing for years or whoever has provided it. I wonder if that is the estimate that was used prior to the place opening i.e. the district is estimated to bring in 9 million visitors when fully opened. However, I can believe it after visiting the place several times during the past few years.

This is both false and misleading. The city's bond issues did pay for some of the buildings that are owned by Cordish. The city's bonds funded a substantial share of the property that Cordish now owns and provided better than four of every five dollars that went into the project in total. And city taxpayers, not revenue from sales at P&L, are now paying off the bulk of those bonds, so it is enormously misleading to claim that the city only provided public infrastructure.

Let's look at the details.

Cordish contributed only 16.5% of the $321MM total cost of building the Power & Light District. The remaining 83.5%, or more than $268MM, was funded by TIF bonds and bonds authorized under the Missouri Downtown Economic Stimulus Act. The city is on the hook for both of those bond issues if the district doesn't generate enough taxable revenue to pay them off. (And of course it isn't. Not even close.)

But how can that be? Aren't city-backed bonds only supposed to pay for public improvements? Well, no. MODESA bonds can be used to fund nearly any part of a qualifying "redevelopment" project. TIF bonds are indeed supposed to pay only for "public improvements", but those improvements may include the "removal of blight" and other similarly ill-defined undertakings. This means that city-backed TIF bonds can be used to acquire "blighted" property, renovate "blighted" structures, etc., and city-backed MODESA bonds can cover nearly anything else. In the case of the P&L, the city's bond issue paid for 100% of the cost of acquiring property, 100% of the cost of demolition and prepping the sites for construction, 100% of the cost of renovating the Midland and Empire/Mainstreet theaters, and 100% of the planning, marketing, legal, and administrative costs of the project. And, yes, also 100% of the cost of building the parking garages and improving the streets and sidewalks.

You can find all of the numbers in Cordish's seventh amendment to its TIF application [PDF]. Take a look at Exhibit 5A in the appendix (about 80% of the way through the document). You see that last column, the one with all the zeroes in it? Those are Cordish's contributions to building the P&L. The lone non-zero is the $52MM Cordish paid for the above-ground construction of certain new buildings. The middle two columns totaling $269MM represent the amount covered by bonds backed by the city.

The city's general fund is now paying more than two-thirds of the interest and principle on those bonds because Cordish's revenue projections for the P&L were off by about 200%. Not that Cordish minds terribly. They had no incentive to put together meaningful revenue projections because their contribution to building the project was fixed up front and remains independent of the district's actual revenues.

Really, you have to hand it to them. Well, done, Cordish. You've put together an outstanding business model, a real only-in-America humdinger that lets you sit back and rake in the cash generated by land and buildings you own but that Kansas City paid for. Well, property that Kansas City is paying for, to the tune of $12MM a year, a bill that city officials expect to see come due every year through 2033.

If you had it all to do over again would you

A: Not do it at all

B: Find a local KC company to do it

C: Something else (explain this option)

D. Use Cordish again

Read what I wrote again...nowhere did I mislead and claim that the city ONLY provided infrastructure.

Sorry. Let me rephrase:

This is both false and misleading. The P&L's cost to the city is not largely the garages and infrastructure. ... Unless by "infrastructure" you mean "everything that constitutes the P&L District," in which case I must admit that your statement is both vacuous and correct.

Definitely hold out for a better deal. The city had just taken back redevelopment rights to the area from the longtime holder. Did the city go to Cornish or the other way around I do not know. But my impression is the city just took the first offer made without really exploring its options on the matter. Everybody under the sun knew the numbers were fixed (even though there is a refusal to acknowledge it) and there was a false urgency that it had to be done right now. Lesser development deals that don't require the city to back the bonds and other city issues generally go through a more intensive review than this project received.

They decided it was worth it and did it. Good for them. It would still be the old blight today otherwise.

Not necessarily, and that's kind of the point. This whole "urban redevelopment" thing was still red hot when the deal was inked, and remained so for several years. If the city hadn't agreed to this deal, there is a non-zero chance (the exact probability is, of course, unknowable) that another deal would have come along before the economy tanked.

So, to answer KCKev's question, I would have done C: something else. Specifically, I'd have rejected the initial Cordish proposal and shopped around for a better deal. Something may have come along, or it may not have, but not even trying is hard to swallow. If nothing else came along, I would have had to think long and hard about taking Cordish's deal, and perhaps I would have ultimately done it, warts and all, but at least I would have done it knowing that there really was no other option.

And this isn't just with the power of hindsight, mind you, because I didn't expect the economy to tank. In fact, I expected the urban redevelopment thing to continue to gain steam. With that in mind, I would have thought for sure I could do better than the deal we ended up with. And, possibly, the result would have been waiting too long and seeing the economy tank and being left with no options. But, more likely, I would have either taken a better deal or caved to Cordish long before 2007.