Two cities, which have partnered with The Cordish Companies on past developments and saw mixed results could teach Mobile’s municipal leaders about what to expect with the Civic Center redevelopment, as the process moves forward with the same company.
Kansas City, Missouri, invested roughly $250 million into the KC LIVE! development to help energize an area of its downtown that had seen better days, Kansas City spokesperson Chirs Hernandez said.
The city approved the project 15 years ago when a particular portion of downtown Kansas City was very depressed, Hernandez said.
“In 2003 and 2004, Kansas City was going through the same things most cities have gone through, a buildout of the suburbs,” he said. “Once people left work and headed for the suburbs, that was it. The joke was at 5:15 on a weeknight you could roll the sidewalks up.”
In a roughly nine-square-block area of downtown there was a barbecue joint, a wig shop and a number of vacant buildings used as haunted houses during Halloween, Hernandez said.
“That was it,” he said.
The story of downtown Kansas City began to change when the city made some “very bold” moves and brought in Cordish to develop its open-air entertainment district concept, Hernandez said.
In addition, the city paid for a new arena called the Sprint Center, in hopes of landing a National Basketball Association or National Hockey League franchise. While the arena never became home to a professional sports team, the Sprint Center has been able to pay for itself over time, Hernandez said. Meanwhile the Cordish development across the street has not lived up to projections.
The city, with a population of roughly 500,000 residents, invested $268 million into the project, while Cordish invested $52 million, Hernandez confirmed in an email message, making the entire investment $320 million.
The public portion was financed through a bond that was supposed to be paid back through tax revenue created by the project, Hernandez said. The city would pay the difference through the general fund.
In fiscal years 2013 and 2014, the city paid out differences of $12.8 million and $14.9 million respectively out of the general fund to cover the debt on the project, according to the city’s financial information. The estimated payout in fiscal years 2015 and 2016 was less, at $8.5 million and $9.4 million respectively.
A large portion of the public portion of the development went toward infrastructure both above and below the downtown streets, Hernandez said. The investment led to redeveloped streets, the installation of sidewalks and fiber, he said.
“It benefitted the development,” Hernandez said. “It benefited everyone else as well.”
Despite the cost out of the general fund, Hernandez called the development successful and credited it with an economic revival of the so-called Power and Light District of downtown Kansas City. He said the project has helped create more than $2 billion in economic development for the area and has “completely changed” downtown.
“What we hoped would happen has happened,” Hernandez said. “It’s had a ripple effect. We’re getting a lot of people living downtown and it has resulted in infill of our abandoned buildings to the east and west.”
Still, the project does face criticism in Kansas City because projections fell so far short and public money continues to be spent to make payments. Some have also complained because Cordish continues to enjoy advantageous tax arrangements in new developments in the area.
Mobile, with less than 200,000 residents, is much smaller than Kansas City and it’s reasonable that Cordish won’t propose a development of the same size and scope of the one in Missouri. However, Cordish has another LIVE! concept in Hampton, Virginia, which has a population of 134,000.
The Hampton Roads Power Plant is a partnership between the city and Cordish, but the amount of public support was not available by press time. Hampton Director of Economic Development Chuck Rigney called the partnership a success for the city in the southeast corner of Virginia.
The development hosts 1 million visitors per year, Rigney said, and roughly 250,000 of those are new to the area annually. In addition to a historic horse racing emporium, which is under construction, Rigney said the development features a pizza place and a taco bar under the imprimatur of celebrity chef Guy Fieri.
“It took an area of property with no action on it and turned it into a tourist destination,” he said.
However, Rigney cautioned that a project like the Power Plant was a “long haul” and was part of a “long-term gameplan.”
Rigney, who came to Hampton from the larger Norfolk, Virginia, said Cordish was involved in a development there into which the city invested $64 million. He spoke highly of Cordish management.
“These are really good businessmen,” Rigney said. “They’ve done this all over the country.”
Mobile city spokesperson George Talbot admitted the downtown area is not depressed like Kansas City’s was some 15 years ago.
“Mobile is seeing a great resurgence downtown,” he said. “It’s not where some of those other cities were where they needed a shot in the arm. It changes our objectives.”
Any Civic Center redevelopment project would need to be benefit other parts of downtown without taking away from them, he said, specifically pointing to areas like Dauphin and St. Louis streets.
“We’re not looking to take momentum away from downtown,” Talbot said. “We’re looking for something that can enhance it.”
Despite losing the only development team considering an event center, Talbot said the city is still considering some type of arena concept for the space. He noted Cordish will have six to nine months to develop its concept after the City Council approves a contract.
“The proposal could change drastically,” he said. “[Cordish] plans to meet with [impacted] groups to get a concept that’s going to be something everybody can buy into.”
On what expectation the city has for public participation in the project, Talbot said the city is looking at the 22 acres of land as its primary participation in the project, as negotiations between the two sides continue.
Cordish Companies officials did not return an email with questions related to how much they expect the city to contribute, or how much cities contribute to these projects on average.
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