Developers in Kansas City are asking for yet another subsidy, this time with a price tag of $63 million. One of the loudest opponents of the deal is the editorial board of the Kansas City Star—and they are right in their call to reject this proposal.
The proposal, which is being considered by the Kansas City Council, seeks funding to help build an office tower and parking garage combination (requiring $27 million and $36 million in subsidies respectively). The building site is at the corner of 13th and Main, right in the heart of downtown. Supporters of the project argue that the subsidies would help provide needed office space.
As ludicrous as the idea of government subsidizing private development in a popular area already is, it gets better—there are no tenants lined up to occupy the space. In other words, economic development officials want the government to spend $63 million on office space . . . just in case.
Jon Stephens, CEO of Port KC (which is currently an active participant in this proposal), attempted to explain this reasoning: “The demand for ready-to-occupy space has been proven in other markets. The demand appears to be present here.”
The editorial board is asking the correct questions in response to Stephens’ comment. If the demand is there, why are taxpayer dollars needed? If the demand isn’t, why would you ask taxpayers and government to take on that risk?
If downtown Kansas City is attractive to a company, then the company should pay for building its own office space. Private developers should be building based on market forces, without being cushioned from risk by taxpayer subsidies.
The Star’s editorial board is right: “It’s time for downtown projects in Kansas City to stand on their own merits, not on public dollars subsidizing private development.”