By Yael T. Abouhalkah, Kansas City Star Editorial Page columnist
The potential for a $15 million deficit at the Power & Light District in the next city budget is stunningly bad news for taxpayers.
Essentially, that deficit would be paid by taxpayers as they finance the bonds that were sold to build the district. The money would come from the city's general fund, leaving less for police, capital improvements and other basic services.
All of this would occur at a horrible time for residents. The city budget likely will be slashed once again in 2010 because of declining revenues from many different taxes.
The city's payment for Power & Light debt in the 2010-11 budget will be around $20 million. But it appears projected revenues from the Cordish Co. development could be around only $5 million.
The $15 million difference -- under terms negotiated under the leadership of Mayor Kay Barnes and the previous council -- would be made up by taxpayers. That's the risk KC government took earlier this decade in pursuing the Cordish Co. development.
The deficit apparently exists for several reasons.
-- The district is not meeting its projected revenues for sales per square feet.
-- The district has not opened as many square feet as once envisioned.
-- The district has successfully protested some of its property tax payments.
Obviously, the $15 million deficit might not occur if the economy picks up and business gets better at the district.
But taxpayers last year shelled out more than $4 million in extra general fund payments for the Power & Light bonds. That figure, once estimated at $7 million for the 2009-10 budget year, now could go as high as $10 million.
And that only sets the stage for 2010, in which the taxpayer-financed bond payments could soar to the $15 million figure.
Unfortunately, there's very little the city -- a partner with Cordish in this deal -- can do about the the debt.
It's up to Cordish to bring in more retailers, more foot traffic, more spenders and more tax dollars to make the Power & Light District successful.
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Artwill states .......
"Cauthen (said) that P&L would never 'cost taxpayers a dime.'"
Cauthen was being truthful. He said "a dime."
Fifteen million dollars is not "a dime."
To rockslide; Stunning It Is!
Stunning is the correct adjective. The developments downtown were done without a minimum of fiscal prudence and appropriate objective project appraisal. In this process, residents and taxpayers were continually told by the incompetent Cauthen that P&L would never "cost taxpayers a dime." P&L and other projects were done with a total lack of both financial know-how and understanding of development contracts. First, while this specific recession may not have been easily forecast, certain principles of sound fiscal management exist and are widely known by professionals of which the unqualified Cauthen (by education and experience) is clearly not one. Let me remind you that I have been predicting this debacle even PRIOR TO the recession. If I could see what was coming, "professional" full-time administrators should have too. Second, a story in the Star about a year ago indicated that Cauthen had not even read and understood the provisions of the P&L contract that have placed all of us at risk. I am tired of Cauthen, his "team", and some on the City Clowncil. Even the civic association now and finally have these circus performers on its radar screen. It is time for citizens to clean house at City Hall and get rid of the existing STUNNING incompetence perpetuated by Cauthen, his gaggle of circus performers, and some members of the Clowncil.
I Told You So Years Ago
Can I say I told you so, again? For more than two years, even before the on-going national economic crisis, I have been warning readers that information being received through Wayne Cauthen and his confreres is being managed to intentionally understate and wish away real BUDGET deficits. This is continuing. The real deficits now exceed $100M. The City is in REAL financial trouble, and this was largely caused by Barnes, Cauthen, and "developer buddies" for their own short term gains. Why is Cauthen still around? He cannot manage KCMO out of a crisis he helped to create. What is wrong with the City Clowncil? Does the City have to shut down before citizens realize what game is being played here. Yes, I have told you so! Oh, yes, the P&L subsidy from the general fund has increased -- Cauthen "never cost the taxpayer a dime"??? I told you so again! Fire Cauthen and other incompetents
What is stunning
Is that they built the damn thing without an anchor tenant.
Why is it "stunning" that an
Why is it "stunning" that an entertainment district would have a shortfall in revenue in one of the worst economic years in modern history?
When the entire city budget is down, revenues for everything across the board are down...this is not "stunning" in any way, shape or form.
Learn the proper use of adjectives