Royals deny staggering price of planned venue

Article posted by Coliseum, October 31^st, 2023

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The Major League Baseball (MLB) team Kansas City Royals denied reports on October 27^th that a new stadium in downtown Kansas City would cost the Jackson County (Minnesota, US) taxpayers $4.4 billion to $6.4 billion.

‘kmbc.com’ stated that the above numbers were reported by ‘The Kansas City Star’ on October 26^th.

The Royals are considering building a new ballpark either in East Village in downtown Kansas City, or in North Kansas City within Clay County. Franchise estimates the overall development, which includes the ballpark and a surrounding entertainment district, would cost more than US$2 billion at both sites.

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The Kansas City Royals are an American professional baseball team based in Kansas City, Missouri (US). The Royals compete in Major League Baseball as a member club of the American League Central division.

Coliseum Summit US 2024 will be hosted in Kansas City June 4-6.

The 37,903-capacity Kauffman Stadium, often called ‘The K’, is a baseball stadium located in Kansas City, Missouri (US). It is the home ballpark of the Kansas City Royals of Major League Baseball (MLB). It is part of the Truman Sports Complex together with the adjacent 76,416-capacity Arrowhead Stadium, home of the Kansas City Chiefs of the National Football League (NFL).

The Truman Sports Complex is a sports and entertainment facility located in Kansas City, Missouri (US). It is home to two major sports venues: The Arrowhead Stadium, home of the National Football League’s Kansas City Chiefs, and Kauffman Stadium, home of Major League Baseball’s Kansas City Royals.

‘kmbc.com’ further stated that ‘The Star’ said it obtained a confidential financial analysis of the proposed new stadium, conducted by the staff of the Jackson County Executive Frank White.

The Royals sent out a statement on October 27^th which read, “The suggestion that a new stadium for the Kansas City Royals would cost the Jackson County taxpayers $4.4 billion to $6.4 billion is erroneous, misleading and inconsistent with what we’ve shared publicly and in private negotiations. Together with the Chiefs, we have been clear in asking for an extension of the existing Jackson County 3/8 cent sales tax. For the Royals, this would result in approximately $350 million upfront contribution from the County toward the estimated $1 billion construction cost of the stadium.”

According to the report, if a 40-year extension of the lease is approved, it could lead to a long-term bill for taxpayers ranging between $4.4 to $6.4 billion dollars.

Shortly after ‘The Star’ published its report on October 26^th, the Kansas City Mayor Quinton Lucas denied he had seen any numbers in that neighborhood.

Lucas said in a Facebook post, “Nothing I have ever seen about a new Royals stadium even remotely suggests the cost will be between $4 billion and $6 billion. That would place it as one of the most expensive stadiums ever built in the history of the United States. There are many reasons not to like a deal, but good faith negotiations should be expected on the community’s behalf. I’m seeing anything but. If the answer is simply ‘No’ from some, they should make it clear and allow others to bargain responsibly and productively.”

The Royals had previously said it would select a final location between downtown Kansas City and Clay County, Missouri.

Jackson County Legislators Discuss Kansas City Royals Stadium Issue

The Jackson County Legislator Manny Abarca points out both the Royals and the Chiefs currently share the 3/8^th of a cent sales tax and any changes to the term of that tax would involve the Chiefs as well.

Maintained Abarca, “I don’t want to point fingers because I don’t think that’s going to get us anywhere closer to the Royals and the Chiefs staying in Jackson County. But the reality is we should be negotiating in a better way. Not bad faith negotiations with fake numbers. We need to come in a professional level. That’s what taxpayers deserve. That’s what the two professional teams deserve as well.”

The Jackson County Legislator Sean Smith told ‘KMBC’ that his first choice would be to renovate the Kauffman Stadium and he’s not yet on board with plans to build a new stadium.

Staggering Price Tag

‘Ballpark Digest’ stated that just before the Kansas City Royals above denial a confidential report circulated by the Jackson County pegged the total cost of a new downtown Kansas City Royals ballpark as exceeding $4 billion, but there are questions as to whether the unreleased estimate is accurate or trustworthy.

The report, a confidential financial analysis prepared by the Jackson County Executive Frank White’s office, estimated the total cost of the ballpark over 40 years would cost between $4.4 billion and $4.6 billion. This estimate is based on the assumption that rising costs for insurance and construction past the initial Royals construction estimate of $1.5 billion will totally eat up the proceeds of a 40-year 3/8th cent countywide sales tax. Those costs, as presented in the report, will rise 10 percent annually, apparently to infinity and beyond. (At the same time, sales tax revenues will rise only one percent a year, according to the report.)

‘Ballpark Digest’ further stated that it’s not exactly clear how realistic this report is: Projecting that insurance and construction costs will rise 10 percent annually for 40 years does not pass the smell test. Even a Republican member of the Jackson County Board is skeptic: The Sixth District Legislator Sean Smith, one of only two Republicans on the Democratic-controlled body, was skeptical of some of the assumptions in the projections, but also questioned whether the county taxpayers should be asked to shoulder so much of the burden of paying for a new stadium – “I will say that some of the inflationary numbers look too high. Not even insurance goes up by 10 percent per year. More importantly, the Royals are asking for more than the Jackson County Taxpayers can afford. I believe Kauffman remains a great stadium and haven’t seen sufficient evidence that it needs to be removed from service.”

Leaking a report like this usually has to do more with politics than the merits of the report, and there are certainly some areas of disagreement when it comes to lease negotiations. (For example, this report and the Royals disagree on the impact of the ballpark and development on sales-tax proceeds. The county estimates 1 percent, the Royals estimate 2.5 percent.) So, take this report with a grain of salt and wait to see how lease and plan negotiations go.

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