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Blueprint for a Blunder: Why Kansas City Should Quash Its Convention Hotel Plans

By Patrick Ishmael Filed May 5, 2011 Source Show-Me Institute

If a convention hotel were economically viable in Kansas City, agents in the free market would build it. The absence of a pending private-sector project pretty well indicates the real prospects for such a hotel, with or without taxpayer support.

Kansas City wants another hotel for its convention center. Nobody wants to pay to get the project started, except … the city itself. The last major project that was financed out of Kansas City's general fund put the city on the hook for the financial shortfalls of the Power & Light District (P&LD). The damage there? Officials project the district will suck $10 million each year from the city's budget from now until … 2033. Although the cost of the new project has yet to be finalized — the latest estimate puts the overall price tag at around $300 million — you can bet that the bottom-line cost to KC's taxpayers, should the project actually happen, will be significant.

City officials say that they won't let the P&LD fiscal disaster repeat itself — that this time, the city won't borrow against its general fund to get the hotel started — but Kansas City has already dropped more than half a million dollars in consulting and property option fees pursuing the project.

The study was produced by a Minnesota-based consulting outfit called Conventions, Sports & Leisure International. The consultants knew the city. They had contributed to a previous proposal that led to a renovation and an expansion of Bartle Hall — the hall's second expansion in 15 years.

Two nights later, 800 civic leaders enjoyed a banquet dinner and jazz at Bartle Hall to celebrate its recent $150 million makeover. The pooh-bahs had high hopes for that Bartle Hall update. In 2004, as the construction work was about to begin, Rick Hughes, president and CEO of the Kansas City Convention & Visitors Association, had suggested that a new ballroom might double the city's convention business.

The problem is that the expansion didn't come close to that promise, and city officials are now being asked to trust similarly rosy projections for a brand-new hotel. Taxpayers have already been burned once by the promise that a big public investment downtown would pay for itself; there's little reason to think this time will be any different.

Kansas City should quash its convention hotel plans before the city writes another blueprint for a blunder.

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