Yesterday, the Kansas City Council voted to approve the plan negotiated by the city manager with the Kansas City Royals to provide funding of $600 million to help the team build a new downtown stadium new Crown Center. Councilmember Johnathan Duncan has been one of the more vocal people about the situation, so I reached out to him yesterday before the vote was held to see if I could get a perspective on the situation from someone who would actually be voting on the project. What follows is a transcription
of that interview.
Jeremy Greco: So I had seen you’ve mentioned in other interviews that you thought it would be reasonable, or that it should be reasonable, for if the city was going to be providing so much funding for the stadium, that they should, you know, get some share of the profits. Is there – to your knowledge – is there a particular reason why they’re not looking for that?
City Councilmember Johnathan Duncan: It’s my first question talking with the mayor and the city manager, that they have a fear that the Royals are going to pull out of the deal. And, you know, I think- it’s in my view that the negotiating team has handled the Royals and kids’ gloves, and we haven’t used our leverage properly to extract more benefit out of this deal.
Greco: So, just to clarify, the city manager is doing all of the negotiating? The city council doesn’t get to participate? You just kind of have to look at whatever the city manager provides, or how does that work?
Duncan: Yeah. We authorize the city manager to negotiate in an ordinance. So it’s the city manager and staff.
I think there are five city attorneys, and the assistant city manager that’s in charge of the finance department used to be the chief financial officer, who was also in the room, I believe, for some of the negotiations.
Greco: Gotcha. I’ve seen some reporting elsewhere that because the city is moving so quickly on this deal, that there’s a strong likelihood that interest rates will be higher on the loan repayments. Do you find that to be accurate, and is that a concern for you or for the city?
Duncan: Yeah. I mean, to be clear, the city council has not received a third-party financial analysis or any financial analysis on this deal to date.
It is my understanding that the third-party financial analysis that we authorized and paid for won’t be ready for another couple of weeks. So city council is currently making a decision to authorize the city manager to execute these bonds without a financial analysis.
Greco: Okay. So, in other words, you can’t even know what the interest rate issues might be because you don’t have a financial analysis yet.
Duncan: Correct.
Greco: And the full city council vote is today [Thursday]?
Duncan: Correct. Now, let me play devil’s advocate.
Jeremy: Sure.
Duncan: What I’ve been told by some of my colleagues is that the council, you know, is authorizing the city manager to execute portions of this deal, but that the bond issues will come back in another ordinance where we could further negotiate benefits and additional financials.
Greco: With the team?
Duncan: That is what has been pitched to me. I disagree.
I think by authorizing the city manager to execute these agreements, we will be giving away all of our leverage.
Greco: I assume you’ve seen the ballot measure that Missouri Workers Power has put forward.
Duncan: I have.
Greco: Do you have any thoughts on to whether its language applies even if all of the voting has been done and everything’s been approved? I know I’ve spoken to them, and they believe that because of the way that they’ve written it, that work would be precluded even if agreements have been completed. Is that your understanding, or do you have a different understanding?
Duncan: I have a different understanding. It’s my understanding that if the agreements are finalized prior to the vote, any work related to those agreements are considered administrative related to finalized agreements.
And it can be subject to legal challenge, which is why the council is moving so very quickly to get these deals in prior to August 31, which is our deadline to make a decision on the petition.
Greco: Right. And that deadline comes before you would expect the financial analysis to arrive as well?
Duncan: Correct.
Greco: There was some to-do with the hearing on, I think, was it Tuesday?
Duncan: Tuesday.
Greco: Where some people were asserting that supporters of the stadium were being allowed to speak longer than others. Do you have any comments on that?
Duncan: Chair [Andrea] Bough was giving both sides. She was playing it loose with the two-minute regulation.
There were some supporters for the stadium that were allowed to run long. There were some folks who were against the stadium who were allowed to run long. Was it complete parity? I don’t know.
Greco: I saw in an article on the Star today that you are planning to vote against the stadium agreement. Is that still correct?
Duncan: That’s correct. [Edit: Duncan and Nathan Willett were the only dissenting votes in an 11-2 approval of the agreement on Thursday]
Greco: Assuming that it passes anyway, is there anything you plan to do to oppose it, or is it just kind of over at that point?
Duncan: I mean, again, I think we’ll have a TIF agreement that’ll come before us. We will have bond issuance ordinance that will come before us, and so I will still push for my council colleagues to get behind extracting more benefits from this deal.
And, you know, I think that we have a fiduciary responsibility to make decisions that are informed by facts and informed by analysis. And in my view, we’re not maintaining our responsibility. And so, you know, I will continue to ask for slowness.
We can only do this once. Let’s do it right the first time. I will continue to push for a revenue share beyond the pittance that is 5% of non-baseball revenue in the stadium, which is just a slap in the face.
Greco: Yeah. By my understanding, that’s not really anything.
Duncan: No.
Greco: And the final question I’ve got written down here is: do you have any advice for citizens who are upset with how this whole thing has gone down? I know Missouri Workers Power, you know, put in that ballot measure. You said that if this gets done before August 31st, which it seems like it’s probably going to, that that’s not going to have a big effect. Is there anything anyone can do?
Duncan: Yeah. I mean, I think it’s important that my council colleagues are made aware of how the public feels. They should email and write and call their council members and the mayor. They should push for a better agreement.
I’m one council member of 13.
Greco: Right. I absolutely understand that. Like I said, that was the last question I had written down. Is there anything that I didn’t ask that you would want to convey to people?
Greco: Yeah. I mean, you know, there are things that I stated on Tuesday in committee that I do like about the deal. You know, I like that it provides labor protections and apprenticeship opportunities for the labor and the construction of this facility. I worked with SEIU Local 1 to get their worker protections in this deal.
You know, I’ve talked to the Kansas City Public Schools superintendent and have advocated that the schools remain farmed in this stadium deal, and the parcel the Royals have verbally agreed – I don’t know if it’s in the agreement; I’ll be checking today – that the Royals have agreed to lock in the base taxes of this parcel at the 2024 rate and to provide the school district with a 3% increase year over year, which is better than other deals I’ve seen. And I like the location of the stadium.
What I don’t like: we’re currently making this decision without a financial analysis.
There is no ongoing revenue to the city. Again, $5 million to the Housing Gateway, which is our homeless initiative, and $5 million to the Negro Leagues Museum, which I believe the Royals were going to make anyway, and then $14 million to arts. Does not make our general fund whole.
You know, the city’s risk is not reflected in the benefits of this deal. We are taking all of the risk, and the Royals are receiving all of the profit. Our general fund is on the line in this deal, and our level of risk and investment is not commensurate with the benefits that we’re receiving. And again, we’re not being treated as an equity-stake partner.
Our equity is not just 30% of the stadium costs, which is true. It is also key equity that unlocks state investment. Without the city’s investment, this deal is not possible, and we are not effectively utilizing our leverage to extract benefits to our general revenue.
We know there’s going to be increased public safety costs related to this stadium. Washington Square Park, where the stadium is going to be located near, is currently essentially a homeless encampment, and $5 million to our homeless initiative will only fund that program for 1 year.
We need ongoing revenue that supports the city’s need in our general revenue. We need ongoing revenue for 30 years of this deal, not $55 million over potentially forty years because they have the option for two five-year extensions. You know, the million dollars that they’re providing a year isn’t going to be a million dollars 40 years from now.
So those are the things I don’t like, and those are the reasons I’ll be voting no.
