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Kansas City Star Opinion: City Hall Officials Need to Think Twice Before
 Subsidizing a New 1,000-room Hotel in Downtown Kansas City
By Yael T. Abouhalkah, The Kansas City Star, Mo.McClatchy-Tribune Regional News

Jul. 10, 2008 - Rick Hughes and other cheerleaders for a new 1,000-room hotel in downtown Kansas City are wearing rose-colored glasses.

Hughes, president of the Kansas City Convention and Visitors Association, is just one of many business leaders pounding on Mayor Mark Funkhouser and the City Council to fork over tens of millions of tax dollars for the project.

Yes, the city ought to investigate how much it would cost to build and subsidize such a hotel. But the city has absolutely no compelling need to rush into the costly project.

The elected officials at City Hall instead must make rational and strategic decisions to use public funds.

For example, the people of Kansas City have to have a better sewer system.

We don't have to have a larger hotel downtown.

A few more observations about this debate:

1. The Kansas City Downtown Marriott sucks up $1.1 million in general tax funds every year.

The Marriott, remember, is the original city-subsidized downtown convention hotel near Bartle Hall. Yet it still can't support itself.

The hotel already gets to keep all the city sales-tax dollars it creates to help keep its doors open, thanks to city-approved legislation in the 1990s.

That's on top of the general fund subsidy, which wasn't even foreseen a decade ago.

If City Hall decides to build another large hotel, that could be an added drain on city tax revenues.

That would be on top of any tax break granted to the private hotel builder.

2. Kansas City isn't in dire straits simply because it lacks another huge downtown hotel.

The Star recently featured a chart showing that Kansas City was last among 18 peer cities in hotel rooms within a half mile of a convention center. This is a favorite talking point of the build-now hotel crowd.

But wait a minute.

Some of the other cities aren't doing so well if you look at far more important statistics.

For example, Kansas City had a higher median household income in recent Census Bureau statistics than these peers: San Antonio, Philadelphia, Baltimore, Milwaukee, Pittsburgh, Cincinnati, St. Louis, Cleveland and Louisville.

Also, Kansas City's population growth is outpacing some peers, including Philadelphia, Baltimore, Milwaukee, Louisville and Cleveland.

3. Kansas City is doing well in wooing future conventions.

The number of conventions using 1,000 or more hotel rooms, The Star reported last week, reached a low of 17 in 2006, but the figure has bounced back to 24 last year and 24 this year.

So far, an average of 21 large events have been scheduled for each of the next three years, with more on the way.

Meanwhile, the city is making progress in getting smaller and medium-sized conventions.

These kinds of gatherings ought to be the primary targets for the Convention and Visitors Association.

4. With $500 million in public subsidies, Kansas City has done a lot to spruce up downtown to serve conventioneers.

Both the Sprint Center and the Power & Light District are succeeding so far in giving free-spending visitors new places to spend their money.

A new convention hotel might help swell those crowds.

However, no one knows yet whether the entertainment district will rake in enough tax revenues to pay off its annual large debt payment.

If that effort falls short, guess who's on the hook for millions in future subsidies? Local taxpayers, just like they are with the Downtown Marriott.

Funkhouser has struck absolutely the right tone of skepticism on this issue.

He wants to see what a city-hired consultant says about how much a large hotel might cost and how much subsidy it might take.

Even more important, the consultant should be directed to estimate how much extra convention business a new hotel would attract, without killing its smaller competitors.

Only then should the city decide whether it would be wise to pursue a large new downtown hotel.

Editorial Board member Yael T. Abouhalkah can be reached at 816-234-4887 or at abouhalkah@kcstar.com. He blogs at voices.kansascity.com. He appears on "Ruckus" at 7 tonight on KCPT Channel 19.

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Copyright (c) 2008, The Kansas City Star, Mo.

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