The KC Strip is the sirloin of Kansas City media, a critical cut of surmisin' steak that each week weighs in on the issues of the day, dictating its column to Pitch writers.

Doubling Down 

As snow falls and downtown buildings rise, the Strip ponders how to pay for it all.

When it comes to managing their money, the Strip's pals down at City Hall like to live on the edge.

This freewheelin' filet winces whenever it dares to look at the balance in its checkbook — that's why it understands how the moneymen at 12th and Oak operate. Two recent events confirm the Strip's theory.

First, winter happened. There was ice, then snow. According to City Hall estimates, all the sanding and plowing will run between $300,000 and $400,000.

You might think that the city would pay for the cleanup from an account marked "snow removal." But there is no such account. Not this year, anyway. The money will come instead from the city's contingency fund, which it uses to settle lawsuits and pay for other unexpected expenses.

The fund had $22 million in it when the Strip called up Budget Officer Troy Schulte last week. For a town of Kansas City's size, $22 million is a pretty small reserve. "We're below where we should be, and another event like this one would drop us even further," Schulte said.

That money has to last through April 30, 2007 — and winter doesn't officially start until December 22. This sweaty sirloin figures the folks at City Hall are banking on the benefits of global warming to keep the winter nice and mild.

Like this Strip said, they like to live on the edge.

The second reminder of that came on the same day that pellets of ice fell from the sky. On November 30, the city's Planning, Zoning and Economic Development Committee put off having a conversation about a project called East Village — a proposal to build offices, shops and housing in the runty eastern section of downtown. The project would put an exclamation point on the cranes-a-poppin' effort to redevelop downtown, a priority of Mayor Kay Barnes.

But if it's ever finished, the East Village will put even more pressure on the city's finances.

The ambitious plan would cover 12 blocks at a cost of $355 million. It's been in the works for almost a year and a half. The first phase would put up a new headquarters for J.E. Dunn Construction, a company with $2.3 billion in annual sales. The city has agreed to cough up $19 million for a parking garage that would be used mainly by J.E. Dunn's workers.

Negotiations between the city and J.E. Dunn have been slow and surprisingly unfriendly. At the November 15 planning and zoning meeting, J.E. Dunn's attorney, David Fenley, said his client was unwilling to bend on a couple of points. Dunn wants the city to pay for cleaning up the site of its future headquarters; it also doesn't want to make any promises about how many employees will actually work in the building.

Fenley, who played football at Washburn University in the 1970s, made the equivalent of a goal-line stand. "If that means there isn't supposed to be a project, then it's too bad," he said.

Barnes, a member of the committee, wasn't pleased. She wants the deal to work, but she was clearly miffed that unresolved differences were being discussed in such a public setting. "This is not typically what we do," she said, sounding like a parent trying to keep her cool as her children cussed in front of the principal.

The exchange was sort of thrilling to watch — it's not every day that this meat patty gets to see the mayor at odds with a big-time development lawyer. Barnes has spent more time during her administration dancing with 'em than playing hard to get.

But what really struck this sizzler was how risky the project's details sounded.

For one, the city would have to buy J.E. Dunn's office at Ninth Street and Holmes if Dunn was unable to come to terms with the East Village's master developer (a company formed by the nonprofit Swope Community Builders and a for-profit outfit based in Minneapolis). Bob Langenkamp, the city planning department's No. 2, explained at the meeting that if the city were forced to buy the property, it would take out a loan from J.E. Dunn that would require the city pay only the interest, with the rest to be paid off in 10 years.

An interest-only loan? The Strip knows that millions of homebuyers are taking out risky mortgages. But it was jarring to hear that the 40th-largest city in America might, too.

That loan is just one aspect of the deal. As Langenkamp spoke, it sounded as if the entire endeavor didn't leave much room for error. Langenkamp came off like a smudge-faced pauper when he discussed the dispute over who pays for site prep. "We've shared budgets with them [Dunn]," he said. "We've shown every penny that we have available to spend in every way."

But, hey, nothing ventured, nothing gained, right? Progressive cities invest. At least that's what Barnes has been telling us.

It's unnerving, though, because the city is committed already to a big, risky downtown project — the Power & Light entertainment district, an adult playland that will include a high-concept Asian restaurant, a bowling alley for hipsters and one of Ted Turner's bison joints. The city issued $295 million in bonds to acquire and prepare that site south of 12th Street and west of Grand and is more or less just hoping that people buy enough chain-store sushi.

The Strip understands the reasons for betting large on the entertainment district. Downtown Kansas City was among the dullest in the history of civilization. Millions were been invested in a convention center and surrounding hotels, seemingly with the intent of crushing visitors with boredom. The south loop, with its acres of surface parking lots and neglected buildings, screamed from every puddle and broken window for renewal.

A few blocks away, the East Village project has its merits. A quarter of the 1,200 housing units will be set aside for people with lower incomes. Third District Councilman Troy Nash has said the East Village will serve as "a serious and significant anchor" for the east side.

But tossing steaming piles of cash at a second multiblock project downtown seems foolish when we don't know if the first one is going to work.

The thing that really burns the Strip about this deal and the entertainment district is the way that, in both instances, the city negotiated with a business "partner" that held all the power. H&R Block was able to cut a favorable deal for its new headquarters in the heart of the entertainment district because it could announce a move to the suburbs at any point in the discussion. J.E. Dunn is in a similar position. When negotiations with the city hit a wall last month, Chairman Steve Dunn told The Kansas City Business Journal that his company had "to explore other options."

Translation: Rev up those Mayflower truck engines, friends, we're heading to Ohh-lathe!

Oh, sure, the Strip knows that, soon enough, J.E. Dunn and City Hall will shake hands on an agreement. Too many high-paid lawyers have put in too many hours for it to work out any other way.

Evidence: Last week, Dunn upped its offer by agreeing to pay up to $25,000 for environmental cleanup at the future HQ site.

With that kind of money, the city can afford to plow 7 percent of the streets the next time it snows.

Comments

Subscribe to this thread:

Add a comment

More by David Martin

Latest in Kansas City Strip

  • Fake That Moneymaker

    C'mon, Sprint — don't you act like you afraida.
    • Jan 25, 2007
  • A Cold Day In ...

    Yep, sure was a lot of hockey talk in Kansas City last week.
    • Jan 18, 2007
  • Identification, Please

    The company that screens KCI passengers experiences some turbulence.
    • Jan 11, 2007
  • More »

Most Popular Stories

Facebook Activity

All contents ©2015 Kansas City Pitch LLC
All rights reserved. No part of this service may be reproduced in any form without the express written permission of Kansas City Pitch LLC,
except that an individual may download and/or forward articles via email to a reasonable number of recipients for personal, non-commercial purposes.

All contents © 2012 SouthComm, Inc. 210 12th Ave S. Ste. 100, Nashville, TN 37203. (615) 244-7989.
All rights reserved. No part of this service may be reproduced in any form without the express written permission of SouthComm, Inc.
except that an individual may download and/or forward articles via email to a reasonable number of recipients for personal, non-commercial purposes.
Website powered by Foundation