Planned vs. Spontaneous Order in Sports/Entertainment

Eric Parsons sends me this link to an Kansas City Star article about the need for an annual subsidy on the order of $10-$15 million to keep Kansas City’s Power and Light (P&L) District financially viable.  The P&L District is a retail and entertainment area in downtown Kansas City located across the street from the gleaming Sprint Center, itself in the news at times for not having a major sports tenant.

The city first gave the OK to the P&L in 2006 with nearly $300 million in bonds floated to cover the project.  Back then, it was expected  to be financially self-sustaining within a few years.  But the recession, high debt financing costs, and a push back of the opening date cut into the project’s finances.  According to the article, it sounds as if a subsidy/bailout is a foregone conclusion.

When I read articles such as this, Wrigleyville in Chicago comes to mind.  Wrigleyville is a vibrant neighborhood of bleacher-topped buildings, bars, retail shops, and restaurants surrounding Chicago’s Wrigley Field.  But unlike the P&L, which was a planned development, Wrigleyville was something that grew up “organically” over time around the old park.  Wrigley Field itself opened and entrepreneurs discovered untapped opportunities over the years.  Wrigley blended into the neighborhood and the neighborhood blended into Wrigley.

Compare that to the P&L District which was built, along with the nearby Sprint Center, as part of a planned downtown redevelopment center.  It was built partly with public money and opened with a lot of fanfare and hope.  Now that the hope has turned to reality, the taxpayer is left to pay the tab.

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Author: Phil Miller

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4 thoughts on “Planned vs. Spontaneous Order in Sports/Entertainment”

  1. just don’t get it!! Organically grown attractions and facilities take time….politicians don’t have time! They only have elections. I’ll bet there were lots of ground breaking ceremonies and photo ops in Kansas City…none at Wrigleyville. Of course the latter doesn’t have that nasty little bill due headache..but what the heck! It’s only money.

    Think how Greece must feel after the Olympics..or little So Africa..that now has Major stadiums and Minor league level soccer. Oh well, there’s always Rugby. Imagine how slimy the whole Olympic bidding process must be if even Chicago can’t win it!! That’s truly frightening……

  2. Living in St. Louis I am glad to see it is Kansas City and not the state that is looking at issuing these bonds. It’s bad enough that the state is partly paying for the Jones Dome in St. Louis.

    Downtown Kansas City is a tough place for retail operations as Crown Center, Westport and Country Club Plaza are all a short distance south of Sprint Center.

    I also wonder how much of the new retail in the P&L District is subsidized and has been stolen from other parts of the area. I know in St. Louis the city gives tax breaks to businesses that stay downtown or come in from outside the area while businesses that have been there a long time in the same location get no advantages. If Kansas City is not doing the same thing I would be shocked.

  3. Economic growth is built on various market factors comprised of consumer demand, available resources (i.e. land, water, transportation, energy infrastructure, and people), technological innovation, and regulation. The failure of Kansas City project, thus far, is not for government or industry failing to invest in infrastructure, or lack or people, of lack of clean water, but is directly related to the financing of the project being forced by government.
    While bonds may, and often should, be used to allow infrastructure development to make an area’s economic re-development possible, it should never replace market forces of private investment for the development of buildings, businesses, technological innovations, etc. Those investments MUST remain in the hands of private investors to cause the organic, purposeful growth created by the power of many minds versus the limited power & perspective of an individual or a single government-sponsored management team.
    China’s government is now learning this the hard way as it faces economic hurdles unforeseen in the last decade, such as limited labor supply to support its number of unfilled job positions. The unprecedented growth seen over the last 2 decades in China was a direct result of government manipulation of the economy through suppressing its currency’s value, and eminent domain for urban re-development. Had China’s government allowed its economic growth to grow at a market-sustained rate, it would not be facing the challenges it is facing today. As the old adage says, “Happy people are productive people”. Happiness is a direct result of self-fulfillment.
    Let neighborhoods produce their own economic growth through each of the residents’ individual contributions of success. Let government provide the resources to keep life peaceful by combating violent crime, prosecuting criminals, and investing in the basic infrastructure to sustain economic growth. Let the people determine the direction of economic growth for themselves.

  4. Meanwhile, the City of Indianapolis has agreed to give the Pacers $10 million a year for the next three years, while also boosting the public contribution to arena improvements…frankly, I’d feel better if they were spending the money on the surrounding neighborhood, which would at least potentially benefit someone other than the owners of the basketball team (and, I guess, the players and the poeople in the arena).

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