Feb
18
Written by:
Brian
2/18/2010 6:32 AM
Study validates downtown's renaissance and its value to Kansas City
By KEVIN COLLISON
The Kansas City Star
The substantial reinvestment that’s occurred downtown since 2002 has benefited the city budget as well as civic pride — despite the financial struggles of the Power & Light District.
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.
City tax revenues overall rose 32.2 percent during the same period.
The revenue increase occurred over a period when large sections of downtown were rebuilt with projects including the Sprint Center, Power & Light District, Internal Revenue Service processing center and Federal Reserve Bank headquarters. Meanwhile, many older office and industrial buildings were being renovated into housing.
“I’m not surprised a bit,” said John Laney, who led the Downtown Council and city Economic Development Corp. when many of the projects were being planned. “We realized that prospect of economic growth and tried to use it as a selling point to get people to work together.
“We were guessing at the time, we didn’t have the figures we should have, but we believed it would work.”
Using data from the city and county, the Downtown Council thinks it now has a better handle on just how much the city’s bottom line has benefited.
“We wanted to get an empirical base of where we were in 2002,” said Bill Dietrich, the organization’s president and CEO. “We wanted to measure the change. How did we move the needle?”
Dietrich also said the report was helpful in rebutting critics of the tax breaks and other public assistance used to revive downtown, including the Power & Light District.
The 7½-block entertainment district, which began opening businesses in late 2007, so far has fallen far short of generating enough tax revenues to repay the bonds issued by the city, and taxpayers are likely to have to cover a $12 million shortfall this year
“When people make a snapshot of what’s happening today, these are 30-year investments,” Dietrich said. “We may have to pay $12 million into the Power & Light, but technically we made money. There’s $23.4 million more now the city has in its treasury.”
For its report, the council defined downtown as the area between the Missouri River and 31st Street, from State Line Road to the Paseo.
At the beginning of the decade, much of the south side of the central business district was deteriorated parking lots and empty buildings — a couple being used as haunted houses. In other areas, older office towers, including the 35-story former Fidelity Bank & Trust Building, sat vacant.
“Downtown was in difficult shape,” Dietrich said. “There was no retail and long-neglected infrastructure issues. It was losing its tax base and business base.
“It was at a crossroads where something had to happen.”
The planning effort was guided by a downtown development strategy prepared in 2001 by Sasaki Associates on behalf of the Civic Council of Greater Kansas City. The political push was supplied by former Mayor Kay Barnes, who lobbied the state for new tax incentive programs and campaigned for the Sprint Center.
The key target was an area called the South Loop. Beginning in 2003, when two major projects were announced — the Power & Light District and the new H&R Block headquarters — and continuing with voter approval of the Sprint Center financing in 2004, more than a dozen blocks were completely rebuilt.
“The results of the Downtown Council study shows that the vision that was shared by so many people and organizations relating to downtown has paid off,” Barnes said. “Their intention to generate positive changes has been validated.”
In addition to the South Loop work, construction of the Kauffman Center for the Performing Arts at 16th and Central streets began in 2006, with completion expected next year. Other big projects included the $370 million IRS facility near Union Station that opened in 2006, and the new headquarters of the Federal Reserve Bank of Kansas City, which opened in 2008.
Housing also was a priority. Many older buildings, including the Fidelity Bank, which became the 909 Walnut apartment tower, were renovated into lofts with the help of state and federal historic tax credits. A few new projects were built as well, most notably the 323-unit Market Station apartments that opened late last year in the River Market.
Since 2002, the downtown population has grown from 11,764 to 17,120, according to the Downtown Council. The number of housing units has increased from 5,800 to 10,700 with an additional 460 under construction.
Much more housing is needed, Dietrich said, if downtown is to realize its potential.
“Downtown is very much alive — there’s no question about its viability moving forward — but we do need to keep developing new public-private partnerships,” he said.
Thomas R. “Buzz” Willard, president of Tower Properties and former chairman of the Downtown Council community improvement district, said the report bears out the extra attention given to downtown redevelopment.
“Memories are short and we forget how unpleasant our downtown used to be not that long ago when it was not deemed safe and we were picking up trash every day,” Willard said.
“There’s no question, the feeling of downtown is much better than six or seven years ago. The numbers suggest it really wasn’t that bad an investment.”
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