Financed in part by $295 million in bonds based on expected future sales and property taxes, the nearly complete eight-block restaurant, nightclub and retail complex is suffering from the same malady effecting "real-estate developers who imagined values and rents in a fast-growing U.S. economy would continue to rise for years."
Now Kansas City, like other cities across the country who followed similar models, is on the hook for the difference between tax revenues and debt service due on the bonds. Hence, "The city is setting aside $12.8 million in its budget for the fiscal year that starts next month to cover the gap, a notable hole in a $1.3 billion budget that calls for $7.6 million in cuts to the fire department," notes Brown.
The project's backers, however, are satisfied with the effect the project has had as part of a broader effort to re-energize the city's downtown. "The city's new mayor, Sly James, said last week that while debt is a concern, he has embraced Power & Light for what it has done for the downtown. 'There was a value judgment made to make that investment,' he said. 'I think it was valid then, and I think it is valid now.'"