The looming ‘big concern' that could threaten Chiefs' & Royals' stadium efforts

Yahoo

18-04-2025

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When Jackson County voters rejected a stadiums sales tax in April 2024, the economy was strong. Inflation had dropped significantly over the past two years and an imminent recession appeared unlikely.
A year later, the outlook's changed.
President Donald Trump's trade war with China and his whipsaw approach to tariffs on dozens of other countries have sent stock markets plunging. Fears of inflation are rising and J.P. Morgan, the country's largest bank, places the probability of a recession in 2025 at 60%.
Kansas City-area elected officials and civic leaders must now contend with this new, darker economic climate as they seek to secure the future of the Chiefs and Royals in the metro.
Any potential second public vote later this year in Jackson County risks taking place amid a downturn or, at the very least, continued uncertainty. With or without a public vote, elected officials will confront high-stakes choices about how much public aid they're willing to support for the teams, whether in the form of sales tax revenue or other incentives.
A generous aid package for projects that would move one or both teams out of the Truman Sports Complex risks blowing up in the faces of elected officials if it comes during a sinking economy, with voters grappling with higher prices and shrunken 401k accounts.
'For us, the idea of tearing down either one of them just to build another somewhere else is wasteful spending. It's fiscally irresponsible,' said Becky Nace, a former Kansas City Council member who led a campaign against the 2024 sales tax proposal. 'And then when you add to that economic uncertainty, cost of groceries going up, cost of goods and services – when you add that to it, it's a failing proposition.'
The Star interviewed a dozen elected officials, civic leaders, economists, academics and others this week about what a recession would mean for efforts to build new stadiums for one or both teams. Most agreed a downturn would make another public vote more difficult, but they were divided on whether it would pose an insurmountable obstacle to winning over a majority of voters.
Some elected officials cast new stadiums as economic development projects, as thousands of workers would potentially be needed to help build them. But academic research has consistently demonstrated that stadiums are poor drivers of economic growth and an analysis published last month found stadium projects spur little growth in local construction industries.
At the same time, the Trump administration's aggressive efforts to cancel and claw back federal funding have left other officials questioning the wisdom of dedicating state and local tax dollars toward helping what are privately-run entertainment businesses. Missouri legislation that would create a path toward partial state funding of new stadiums in Jackson County has so far not advanced in Jefferson City.
'I think it's a big concern that, you know, in this environment, asking taxpayers to foot the bill for something for billionaire team owners will feel like a really heavy lift,' said Missouri House Minority Leader Ashley Aune, a Kansas City Democrat. 'And I honestly don't know that, you know, in that atmosphere, that lawmakers will have the will to put it in front of the voters.'
The Chiefs and the Royals also face a ticking clock that leaves little room to sit out a recession before finalizing their future plans.
The teams' leases at the Truman Sports Complex expire in 2031 and Royals leadership has been clear it doesn't want to remain at Kauffman Stadium. The Chiefs have been more open to remaining at an upgraded Arrowhead Stadium, but have also explored relocating to Kansas.
While the date remains several years away, the massive task of building potentially two stadiums means the teams are quickly running out of runway to make key decisions about locations.
The Chiefs declined to comment for this story. The Royals didn't respond to a request for comment.
'I think anything new at that point is going to be hard to sell to taxpayers, no matter what it is, where it is,' Jackson County Legislator Manny Abarca said, referring to a potential recession.
When Jackson County voters rejected a 3/8th-cent sales tax last year that would have brought the Royals into the Crossroads and kept the Chiefs at Arrowhead, the margin wasn't close. The measure failed, 58% to 42%.
The decision to hold a second vote in Jackson County would mark a major gamble.
An August or November vote would give the teams and their supporters just a few months to mount a campaign that demonstrates what, exactly, is different this time. The deadline to certify questions for the Aug. 4 ballot is May 27.
In addition to uncertain economic conditions, Nace and other critics of last year's ballot measure say voters also lack trust in government leaders and how they spend tax dollars.
'It was misguided and I think they're out of touch with the taxpayers,' said Nace, who supports keeping the teams at the Truman Sports Complex.
Phil Andreas, mayor of Lone Jack in eastern Jackson County, said the county 'hasn't helped themselves in any way, shape or form' because of the continuing dispute over property tax assessments. The county recently lost a lawsuit challenging a State Tax Commission order to reduce property values on most parcels hit with large valuation increases in 2023. On Thursday, county officials announced they would limit increases to 15% this year.
Missouri state Rep. Aaron Crossley, an Independence Democrat, predicted economic uncertainty would have a significant effect on any future vote. Governments already fall short in delivering basic services that have been promised, he said.
'And I think we saw that in that county-level vote last year,' Crossley said. 'I think that makes it harder to build trust after citizens have already said they're not trusting, kind of that county-level process that's in place.'
A spokesperson for Jackson County Executive Frank White didn't respond to questions about how economic conditions could affect stadium discussions.
Kansas City Mayor Quinton Lucas said a public vote could, under the right conditions, succeed even amid a recession or economic uncertainty. In an email, Lucas said Kansas City voters hadn't rejected any city initiative during his time as mayor, including sales and earnings tax votes during the financial challenges of the pandemic.
'If the project makes sense and is responsible and we give ample time to answer questions, I am confident the people of Kansas City and Jackson County would support a new initiative,' Lucas said.
At the NFL owners meetings this month, Chiefs team president Mark Donovan said the team could consider an August or November ballot measure in Jackson County — should the team opt to pursue a renovated Arrowhead Stadium. Three weeks later, though, an August vote appears increasingly unlikely.
Last year, the Royals announced their Crossroads location – at the site of the old Star printing press – less than two months before the vote. If the Jackson County Legislature sets up an August vote, the Royals would still have less than four months to pitch a new site, even if the team announced its decision today.
But it's not clear the Royals have settled on a site, even privately.
The Star reported on Wednesday that the team has evaluated the possibility of a stadium in North Kansas City in Clay County, a location it also considered ahead of the 2024 vote. The team has also explored an Overland Park site across the state line, in addition to Washington Square Park near Crown Center in Kansas City.
Abarca, who supported the April 2024 ballot measure, said the whole region would feel the effects of a recession. The issue wouldn't belong to Jackson County alone when it comes to the teams, he said.
'It becomes, 'can we afford it anywhere,' right?' Abarca said. 'If I can't afford eggs and the basic necessities, can I afford to bring a new team to my region?'
Kansas' mechanism for courting the Chiefs and Royals doesn't require the public to vote. But that doesn't mean it's immune to public pressure.
The Kansas Legislature last year passed a super-charged Sales Tax and Revenue, or STAR, bonds program that could provide billions to finance construction of one or two stadiums. The bonds would be paid back by tax revenues from within any new stadiums and surrounding retail development, as well as future sports betting and Kansas Lottery revenues.
The law authorizes Kansas to potentially issue STAR bonds to pay for up to 70% of the cost of stadiums for one or both teams – up from the 50% ceiling for other projects. A Chiefs stadium alone could cost at least $2 billion. A Royals stadium could be another $1.5 billion, if not more.
The debt would be repaid over 30 years by a combination of tax revenue from the stadiums and surrounding development, sports gambling revenue and Lottery revenue. As part of the bill, annual Lottery revenues above $71.5 million each year will now be redirected into a fund to help pay off the bonds, a change likely worth about $10 million a year.
The law authorizes the Kansas secretary of commerce to negotiate a STAR bond agreement. Any deal would have to be approved by the Legislative Coordinating Council, or LCC, which includes top House and Senate leaders from both parties. Republicans hold a 6-2 majority on the council.
The STAR bonds plan will sunset on June 30, but the LCC may approve a one-year extension. Top lawmakers on the council may face pressure not to approve an extension if the economy is souring in June.
A spokesperson for Kansas Senate President Ty Masterson, an Andover Republican widely expected to run for governor, said it's too soon to know whether an extension will be necessary. The spokesperson, Mike Pirner, pushed back on the notion of an imminent downturn, saying that economic indicators remain strong.
Pirner said that under STAR bonds, any risk is held by bondholders, not taxpayers – an argument frequently made by the program's supporters. While true, experts have said it downplays the way a default would make government-issued bonds in Kansas seem less reliable to future investors, which could raise borrowing costs.
Masterson, in a statement, called the Chiefs and Royals essential to the region, from both an economic and cultural perspective.
'That's why Kansas didn't wait — we stepped up to the plate a year ago with a home run package to keep the franchises in town,' Masterson said. 'I envision Kansas remaining fully on the field of play throughout the process.'
The Missouri stadium legislation – introduced by several lawmakers – would cap the total amount of funding the state can provide at 33% of the total project costs. It would also limit funding from all public sources, including local governments, at 75% of the total project costs.
It would allow Missouri to offer financial assistance for stadium projects through tax increment financing and other mechanisms. For example, funding could come from state sales and income tax revenue generated from stadium projects.
The measures haven't advanced, even though under a month remains in the Missouri General Assembly's annual session. No hearings have yet been held.
The only stadium-related legislation that has gained traction would allow Clay County to create a sports complex authority similar to the one in Jackson County. The Missouri Senate has passed the bill, 26-6. It's now in the House.
'No bill has moved in the legislature that has anything to do with Jackson County, keeping professional sports teams there. You know, the only bill that's moved involves Clay County. So there's nothing being done,' Missouri state Rep. Mark Sharp, a Kansas City Democrat, said.
'I mean, there is absolutely nothing being done and there's nothing that will get done before June and they know that. Everyone knows that. Everyone knows that except for the people, apparently.'
A host of top Kansas City-area business and civic leaders are now publicly pushing for action to retain the teams in the region.
A letter released Monday and signed by the leadership of the Greater Kansas City Chamber of Commerce, the Civic Council of Greater Kansas City and other groups calls for state and local leaders to 'act decisively' to keep the teams.
'Public leadership must intensify efforts, ensuring the Chiefs and Royals fully understand their options and feel confident in making the decision to stay in the region,' the letter says. The groups make no similar demand of the teams, saying that they are working hard to stay in the region.
The groups make no endorsement of any specific plan, other than calling for a 'realistic and positive public-private partnership' that keeps the teams in the region, which they call 'vital regional assets.'
Michelle Cronk, a KC Chamber spokesperson, said in a statement on Thursday that economic conditions are shifting, 'and that can make it more difficult to secure public support.'
'But this is a long-term decision with long-term impact, and we hope everyone considers what's possible when we invest in bold ideas that can shape our region's future,' Cronk said.
Critics of stadium subsidies say the projects offer few economic development positives. Professional sport stadiums – even those that host concerts and other events – most often sit empty.
A 2022 review of 130 studies over 30 years reported that nearly all empirical studies found 'little to no tangible impacts of sports teams and facilities on local economic activity' and that the level of subsidies typically provided for stadiums 'far exceeds any observed economic benefits.'
'Stadiums are just about the worst possible thing you could subsidize from an economic perspective,' said John Mozena, president of the Center for Economic Accountability, which opposes government subsidies in economic development.
Any new stadiums would likely open years after any looming potential recession is over. But the economic benefits during construction would also likely be limited.
A study published in March in the Journal of Urban Affairs found no significant evidence that building professional or college sports facilities leads to higher employment in the construction industry. The study, by Minnesota State University economics professor Phillip Miller, examined sports-related construction in the Minneapolis-St. Paul area.
'Our findings suggest that construction jobs at stadium and arena sites effectively substitute for construction jobs at other sites,' Miller wrote.
Lucas, when asked how a recession or economic uncertainty should factor into decisions regarding incentives for stadium projects, said Kansas City views any future project as, first and foremost, an economic development project for the community.
Evaluating public support, the mayor said in an email, starts at linking proceeds and revenues from the stadium and surrounding development to the project itself.
'As with CPKC Stadium, Kansas City and its incentive agencies can build transformative projects and districts without a draw on the general fund of the City and a negative impact on other important taxpayer priorities,' Lucas said. 'Regardless of economic conditions, this ensures that a stadium project proceeds in a fiscally responsible manner.'
Crossley, the state lawmaker from Independence, said in any future vote, it will be incumbent on 'folks like me' to help voters get a grasp on how a ballot measure would affect their personal finances.
Amid stock market turmoil and hits to retirement investments, 'I think folks will have a harder time saying yes to that,' Crossley said.
'We really need to make sure that whatever solution we come up with is communicated well,' Crossley said, 'and there is a direct benefit to working families that we can communicate.'
The Star's Matthew Kelly and Sam McDowell contributed reporting