The Royals are looking to move downtown
John Sherman wants to build a ballpark district in downtown Kansas City. It will only cost $2 billion. You know who has that kind of money? Taxpayers!
Gordon Cooper:
“You know what makes this bird go up? Funding makes this bird go up.”
Gus Grissom:
“He’s right. No bucks…No Buck Rodgers.”
—The Right Stuff, 1983
Royals chairman and CEO John Sherman fired the baseball equivalent of a moon shot on Tuesday when he announced the intention of the Royals to build a new “world-class ballpark” to be located “in or around the downtown area.”
The open letter posted to Twitter wasn’t a surprise. Sherman has never hidden from his desire for a new stadium. I’ve come to believe that it’s probably a major impetus behind his purchase of the Royals. There’s money to be made owning a Major League Baseball team. There’s more money to be made owning a Major League Baseball team with a shiny new “ballpark district.”
There’s one thing that people who have money want: More money. And if they can get you to give them free money to make that money…My god. It’s like an open bar on New Year’s Eve.
This is going to be fun.
Of course, before we discuss a new ballpark we really need to talk about the old one. Sherman’s desire for a new ballpark implies there’s something wrong with the old one. While the game day experience at The K is fine, I can appreciate that there are probably some achy old bones about the place. It’s a lot of concrete and steel and old pipes and whatnot. Stuff like that isn’t easy to repair or replace. And it gets to be expensive. But you know what? The good taxpayers of Jackson County are already picking up the tab on that. There is a 3/8th cent sales tax that is functioning until the lease on the stadium expires in 2031. It was voted on by the taxpayers of the county in 2006 and was initially used to fund part of the renovations at the Truman Sports Complex. It’s not like funds for maintenance will have to come out of Sherman’s pocket. The taxpayers already agreed to pay for that.
According to the Kansas City Business Journal, the Royals have actually been putting that money to good use.
In the past five years, the Royals have used the fund to buy new sod, fix the warning track, install new field and parking lot lights, upgrade the sound system, make fountain repairs, fix signs and fences, clean the stadium, replace kitchen equipment, and upgrade the Wi-Fi, scoreboard and other items.
Overall for the upkeep of the stadiums, the state of Missouri pays $3 million annually. Jackson County chips in $3.5 million and Kansas City pays $2 million.
Economist J.C. Bradbury has done a ton of research in this field. He’s found that the life cycle of stadiums is currently around 30 years. That seems insane to me. Kauffman Stadium will be 50 years old next season. It’s the sixth oldest park in the majors. (And the only one built in the 1970s that’s still standing!) Contrast that to the Rangers who played in their previous yard for just 25 years before moving to their current monstrosity. The Braves completed 20 seasons at Turner Field before relocating to the suburbs and Truist Park. (Spoiler alert: You will be hearing a lot about Truist Park and the Braves baseball/entertainment center in suburban Atlanta in the coming years.)
Bradbury figures another building boom is about to get underway. In that sense, Sherman is right on time. The estimate he provided in his open letter was that it would cost $2 billion dollars to build a new stadium. Let that figure rattle around your brain for a moment. We will return to it in due course.
Kauffman is a fine place to watch a ballgame. The concourses are plenty wide, the sightlines are wonderful, there are shops and distractions and…fountains! In my opinion, the best thing they did was rip out the artificial turf and put in the grass. Once that happened, it felt like a proper yard. Still, there are some warts. It’s located at the intersection of two major highways, yet there has been zero development in the area. The renovations, headed by Kevin Uhlich and completed in 2009, really aren’t my favorite thing. I do enjoy the seats around the fountains and how you can walk around the entire stadium, but it feels like everything was done to maximize advertising space. And the Hall of Fame building and the bar beyond right field are eyesores that don’t add anything to the ambiance. But the renovations needed to be done and it’s bought the old stadium several more years.
It’s a great place to catch a game.
From Sherman’s letter:
As you may already know, it's become challenging to maintain The K. When its current lease with Jackson County concludes at the end of this decade, it will be 60 years old. The renovations required at The K to achieve our objectives would cost as much or more than the price tag to develop a new ballpark. A new home would be a far better investment, both for local taxpayer dollars already supporting our facility, and for the Kansas City community.
Wait. Sherman is saying that renovating Kauffman Stadium would cost as much or more than $2 billion dollars? What exactly does he have in mind that needs to be updated? Seriously…what needs to be done now to the stadium to “stay competitive with our peers nationwide” as Sherman’s letter states? The last time the stadium was renovated, concourses were widened, bathrooms were added, a massive high-definition scoreboard was built and the whole outfield experience happened and the cost came in at around $250 million. I can’t imagine another set of changes like that is necessary…but supposedly anything they’re going to want to do to the old stadium will cost as much or more than $2 billion dollars!
Does John Sherman think we’re rubes?
Sherman, as noted, announced his intention in an open letter published on Twitter. I’m sure you’ve seen it, but just in case you haven’t…
There’s a lot to unpack. And unpack we shall. I’m not in real estate but I do know the three most important things about it are location, location and location. On that matter…
“We are excited to now share that we have several leading locations under close consideration, both in downtown Kansas City and close to it.”
One of the things I found odd about the timing of the statement was the lack of details about these “several leading locations.” I have to assume there’s a reason they weren’t presented in more detail. Is there a clear favorite and are they simply going through the motions of identifying potential sites? I suspect there will be some lobbying and campaigning for particular areas. They will want to keep everything in play to maximize the fun.
One thing that is for sure, the generalization of “downtown” or sites “close” to downtown provides plenty of grist for the “there’s not enough parking” crowd and the “what about tailgates?” contingent. I will write this probably a thousand times over the next several years, but the parking argument just doesn’t hold water. According to Visit KC, there are around 40,000 parking spaces inside the downtown loop. Obviously, with the construction of a ballpark village or equivalent entertainment district, it would be a safe assumption that more parking would be part of that plan.
Especially if someone in the ownership group or the Royals themselves could own and operate a parking garage. The last estimate from the Kansas City Business Journal had the Royals generating over $4 million per year in parking fees. Since the lots are owned by the county, that revenue goes into the fund to maintain the stadiums. If the Royals could keep a sizeable chunk of that revenue from their own garages and lots downtown…My god! That’s at least one Ryan O’Hearn extension!
It’s quite likely if you parked in the hinterlands of the Truman Sports Complex for the World Series, you walked the equivalent of several city blocks to get to a gate. You just didn’t realize it at the time because you were walking through a massive parking lot. If the Royals move downtown, the walk probably won’t be any longer than you’re experiencing at The K.
Finally, on the parking issue…you’ll get used to it. Really. If you go to even a handful of games, you’ll figure out a way to navigate the area that works for you. Maybe it’s a parking lot that’s a little out of the way, or you’ll have a pal who can get you in to some executive-type garage. Maybe the public transport perverts will win the day and you can streetcar to the stadium. Basically, if you go enough, you’ll figure out a system to get in and get out.
Tailgates? Sure it’s fun and kinda sorta unique to Kansas City. But the cash you spend on beer and meats for the grill can go to the bars and restaurants in the entertainment district around the ballpark. At least that’s what the investors are hoping. And they probably won’t be wrong.
If you’re going to spend X amount of dollars to go to a ballgame, the ownership group and their partners in a ballpark village want every last nickel they can grab.
Let’s get to the heart of the matter. Sherman’s letter says this new ballpark is going to cost $2 billion dollars. B as in billion. Two of them. A couple of billion.
That’s a lot of coin. Someone is going to need to come up with that cash. By the way, do you happen to be a Jackson County taxpayer?
“With a mixture of public and private investment, including our own intention to invest hundreds of millions of dollars directly into the ballpark and the ballpark district, the long-term vision remains a work-in-progress.”
Got that? The Royals ownership group plans to invest “hundreds of millions” into this venture. It’s vague, but it sure sounds like less than one of those two billion they’re going to need. But it’s more than what I have in the bank account. (Trust me on that.) So let’s just take a stab—since we’re working with a ton of generalities from this letter—and guesstimate that the Royals are willing to pony up anywhere from five percent ($100 million) to 45 percent ($900 million).
Reader, they are not going to put up $900 million of their own money into this venture if they can help it. It will be closer to $100 million.
Sherman and his group are going to ask for money—a lot of money to finance this project.
“To accomplish this move, our plans will be contingent on continuing our public-private partnership and investment with multiple local jurisdictions and the State of Missouri.”
There is more than one way to fund a ballpark. They could get in line for a federal grant with all that sweet infrastructure cash rattling around Washington D.C. They could find some private investors who would stand to benefit from a ballpark village. And they’ll obviously look for local taxpayers to pick up a sizeable portion of the cost. How much? That’s yet to be determined. For a letter light on details, Sherman did get specific on this point.
…we would not ask Jackson County citizens to contribute any more tax dollars than you already do today.
That’s…nice? Honestly though, governments need to stop subsidizing professional sports owners. These people are printing cash with their franchises. They can find the financing and foot the bill without soaking the taxpayers. Give us money to build a stadium so we can charge you “premium” and “super-premium” prices for your tickets and food and whatnot. It’s like running into the highwayman twice.
While Sherman’s letter doesn’t provide any specifics on location or timetable, it does contain plenty of numbers that are already being used to justify obtaining public funds for his enterprises.
Construction of this new ballpark district could create 20,000 jobs, $1.4 billion in labor income, and an estimated $2.8 billion in total economic output, as well as spur additional adjacent investment.
The new ballpark will drive approximately $185 million more in regional economic output than The K does today. Greater regional visitation will sustain more than 600 new jobs, and spending at the new ballpark district and across the region will drive more than $60 million in new tax revenue over the first decade.
These numbers reek of fantasy. Any time the team posits something like this, they have to show their work. Show me the study that says it could create 20,000 jobs. Show me the research that says it could create an estimated $2.8 billion in total economic output. They left more than enough wiggle room there and that’s not good enough. I realize it’s still early days, but they have to do better.
Oh! I should mention I’m not going to trust the numbers if they came from a study the team commissioned. Give me some independent, third-party data, thank you very much.
Bradbury, the economist who has done extensive research on stadiums and public tax dollars, recently published his latest study on the impact sports franchises have on local economies. It contains this abstract:
The prevalence of venue subsidies generated an extensive and vibrant research literature, which spans over 30 years and includes more than 130 studies…Though findings have become more nuanced, recent analyses continue to confirm the decades-old consensus of very limited economic impacts of professional sports teams and stadiums. Even with added nonpecuniary social benefits from quality-of-life externalities and civic pride, welfare improvements from hosting teams tend to fall well short of covering public outlays. Thus, the large subsidies commonly devoted to constructing professional sports venues are not justified as worthwhile public investments.
In layman’s terms, you’re paying for this stadium with the local politicos and team owners promising you great economic development in return, but you’re seldom getting the proper bang for your tax buck. By the time you realize this, the owner has seen the value of his franchise increase by double-digits percentage-wise.
Taxpayers footing the bill for stadiums is one of the greatest cons of the last 50 years.
We are in the early days of this process. Myself, I remain stadium agnostic. Kauffman Stadium is a great place to catch a game, but if the Royals move downtown, I’ll travel along with them. Hopefully, the new place will be as nice as the old one. I’m at least confident that if a new stadium is built, they will get it right. (And seriously…Fountains. There has to be fountains at the new yard. The newsletter demands it.)
But John Sherman and his ownership group and any other investors can pay for it themselves. Keep the public money out of this.
The one thing not mentioned in the article is that there are some co-owners of the Royals that work in construction or own property downtown. Sherman is an entrepreneur. He wants to make money. Those that invested in the Royals want to make money. The new stadium and baseball district is to line those investors and Sherman's wallet with a continuous influx of cash.
Why build a baseball district and new stadium if the product on the field isn't worth going to see? I usually attend 5-8 games a year since I live 3 hours away. However, due to the terrible managing/coaching and on-field play we only attended three games this year. I'm not going to waste my time and money if ownership isn't going to put a good product out on the field.
I know, I know - the new stadium will bring in more money to help put better teams on the field. I don't believe that. Again, I come back to Sherman and the group that has invested in the Royals are trying to find a way to line their pockets with $$$.
This move has some of the fingerprints from the owner of the Los Angles Rams all over it. A business district around the stadium. Sound familiar? You were right in the article, there is no way Sherman is going to pump a ton of his on money into the project.
Parking and city infrastructure is going to be a huge issue. You can point to other stadiums in the league that have downtown baseball. St. Louis - Busch IV is nice, but you are never in the same parking area each game. It's a roll of the dice. Wrigley - great atmosphere, history. They have the elevated trains/subway. KC has the streetcars, but that will be a joke for the volume of people it will need to handle. Again, there will have to be a ton of investment in infrastructure IF a new stadium is built.
Sherman has eluded to working with the Chiefs. The way I read it last year was - The Royals will move downtown. Kauffman/Royals stadium will be torn down. The Chiefs will then build a new stadium in it's place. Tear down Arrowhead and build their own business district. Although I wonder how things are going to play out now that the state is going to be pumping funds into Arrowhead for the World Cup in 2026. Wouldn't transportation infrastructure be bulked up going to the Truman Complex for the World Cup? If so, then why wouldn't the Royals try to capitalize and build upon it with what they have?
I know, I know - the stadium will be 60 years old. The renovations made Kauffman/Royals stadium much better (wider concourse, outfield experience, scoreboard, ribbon board, bar, HOF) Is it totally up to modern times? Not 100%, but the experience and view of games is incredible. There is hardly a bad seat in the stadium (even up in the nosebleed section).
The one thing that fell through 50 years ago and then again in the 2006 renovation vote for the stadium was a roof. It was supposed to have a rolling roof all those years ago that was to go between Royals Stadium & Arrowhead. It was too costly due to overruns in the early 70's. The voters chose not to in 2006. Had it been approved there would have been more events coming to Kansas City - A final four, a Super Bowl, etc. But it didn't happen. Now I know the argument on this would be that the roof would have benefitted the Chiefs. It would have helped the Royals as well. A retractable roof would ensure there would be no rainout and better control the climate during games. Sadly I doubt that will be even considered.
Bottom line - Sherman has finally stopped tiptoeing around and made it obvious what his plans are. The train is out of the station and he's going to get what he wants even if we don't.
It's all about the Benjamins, as Puff Daddy would say.