Apr

27

Consulting is a sweet gig, especially for TIF projects

April 27, 2009 | 3 Comments

Much hay has been made over the financial failure of the Power & Light District.  It was projected to net the City $14 million in sales tax last year, but only brought in $2 million.  Taxpayers were on the hook for the difference, which made the city’s budget deficit even worse than it needed to be.  This is all resulted in an epic blame storm.  The Cordish Co. is criticized for failing to fully lease the district and deliver many of the promised businesses.  The City is criticized for delays in prepping the site and turning it over to Cordish before the recession hit.

But now a third-party scape goat might be emerging.  The Pitch is reporting that the consultants who provided the financial projections were also way off the mark.  The city and Cordish seem have made a huge bet based on bad numbers.  Sound familiar?  Anyone remember Science City??

Since tax breaks have become standard operating procedure for KC, how about we finally bring some financial whizzes into City Hall?  The city itself needs the capacity to analyze these complex deals, instead of relying on self-promoting consultants or the mavericky Economic Development Corporation.

Categories: Business


Comments

3 Comments so far

  1. Dave on April 27, 2009 10:01 am

    isn’t it too late? while the EDC is not inherently evil, it’s certainly not best practice to have them as the only ones checking their work. ship their offices over to city hall (instead of the TIF’d out town pavilion) and see if anything changes.

    P+L is far from the albatross that science city turned out to be, but desperate times call for desperate measures. let’s hope the real lesson here is to just not let things get so bad that the rescue process clouds our judgment.

  2. Brent on April 27, 2009 3:44 pm

    In all fairness, the city does have auditors that work to evaluate things like this…and in the P&L’s case, the auditor, our current mayor, recommended against this particular project because the projections looked to large and there was no wiggle room. But the auditor was ignored.

    Upon further review, it could have been a stubborn council that ignored his advice — or could have been that the auditor was bull-headed and had earned the treatment. Either way, that work was done — was correct — but ignored.

    That still doesn’t excuse Cordish for still having 1/2 of the district sitting empty.

  3. Northlander on April 27, 2009 6:20 pm

    Why would the E.D.C. ever stop a project? They get a % from each project they do. Science City,18th & Vine,Uptown,plus many more. Next year look for the City to be $121 million or more in the RED.
    When you have a TIF that pays for chairs,desk and cabinets for H&R Block I don’t call that a good deal.

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