Portland Bust

Someone please explain to me what all the bad blood is about the P&L District???

I really shouldn't read the comments section to stories in KC's paper of record/cheerleader. If something stupid is said in this town, odds are that it appears in the Star's comment section. Maybe we're a little spoiled here at the KC Beer Blog because our commenters actually add value to the blog.

So I read the above little comment buried in some rant about Kansas Citians not being enlightened enough to throw away millions of dollars on downtown development. The comment was in response to a Star article proclaiming that the Portland Trail Blazers and city of Portland were impressed with the P&L District.

I was literally shocked that another city would look at the P&L District as a case study of what you would want your city to spend money on. It seems Portland has built their own version of Kemper Arena, an arena built in a depressed area with the hope that development will surround it. As with Kemper, it hasn't happened in Portland. This has made the Trail Blazers a little angry since their arena isn't making them enough cash. They're going to the city officials and begging them to spend even more taxpayer cash to develop the area around their arena. Since they're not footing the bill, they see the P&L as an acceptable project.

And there's the rub. The year-old Power & Light District is hemorrhaging taxpayer money. Opened amid an economic free fall, leasing rates and sales taxes have failed to hit city projections. Cordish has sued Jackson County to lower its property tax assessment in the district and has developed a local reputation for hardball negotiating and tin-eared community relations.

Meanwhile the city, which issued $295 million in bonds to pay for infrastructure and some building costs, has been forced to dip into its general fund to cover its debt service.

Kansas City Mayor Mark Funkhouser, who is seen by the business community as anti-development, is philosophical about the district, launched during his predecessor's tenure. It's a "good product," he said, and it's nice to have crowds of people and night life where none existed before.

But he doesn't believe government should be building bars and restaurants. And as a former city auditor, he harbors few illusions about the economics involved.
"It's never going to make money," he said. "I can't imagine how it could make money."

None of this is mentioned in the Star article, of course, only the fact that Portland likes the P&L District. Hence, Star commenter confusion such as “Does anyone actually believe things used to be better back when there was absolutely nothing at all down there? Anyone? Anyone?... “.

Well I think we would have been better off with the $295 million we spent on the deal. That money's gone and we're not getting it back. So yes, we would be $295 million richer as a city, which would make us better off than a collection of douchey bars.

This would be even worse for Portlanders who have a thriving downtown. The thriving just isn't happening where city leaders and the Trail Blazers want it to happen.

Since The Oregonian doesn't really have anything to gain by cheerleading the P&L they also did some other real reporting.
The Power & Light District is credited with helping the city increase convention bookings by 30 percent in 2008, which represents an 80 percent increase in convention-related room days for local hotels.

But as a local gathering spot, it's still a work in progress. The district draws a decent lunch crowd, but weeknights can be slow. And though the district's Live block hosted 150 music events last year and does a brisk business on Friday and Saturday nights, the nearby restaurant row is often sleepy.

On a balmy Friday night in early May, casual dining chains such as Chipotle Mexican Grill and Ted's Montana Grill are moving burritos and bison burgers.

But at the 801 Chop House, which features a long wine list, curtained-off dining alcoves and 22 varieties of steaks and chops, exactly three tables are occupied at 8 p.m. Across the street at the Bice Italian Cafe, it's the same story.

High-end dining isn't the district's only sore spot. City officials say retail has been slow to materialize, too. There's the new grocery store and a JoS. A. Bank men's clothing outlet. But Cordish marketing posters festoon empty storefronts imploring people to "Take the new downtown for a test drive."

Blake Cordish, a vice president in the family business, contends that the district has been phenomenally successful given the state of the economy. Though other leading developers are going bankrupt, "our portfolio is thriving."

Cordish says 90 percent of the Power & Light District is leased, including tenants who have committed or are building out their space.

City officials figure only 72 percent of the space is occupied and say Cordish has made many pronouncements about tenants and occupancy rates that didn't pan out in the past.

"Missouri's motto is 'Show Me,'" said Missy Wilson, vice president of development services at Kansas City's Economic Development Corp. "The public will believe it when they see it."

In the meantime, Cordish has sued the county over its property taxes, as well as the owners of the Bice Bistro for back rent and the costs of finishing the restaurant and adjoining gelato cafe.

The contractor who did much of the nearly $3 million build-out of the 801 Chop House has sued the restaurant's owners and Cordish for failure to pay for $600,000 in work.

The real red ink, however, is at the city, which was looking for sales taxes generated in the district to pay three-quarters of its bond payments. In the first year of the district's operation, sales tax revenue fell 84 percent short of its projections, forcing the city to exhaust a reserve fund and tap its general fund for an additional $4.7 million to meet debt payments. This year, even with more bars and restaurants open, it forecasts a $7 million to $10 million shortfall.

"I think the City Council made some decisions that were socially driven and not necessarily business driven," said Jeffrey Yates, Kansas City's finance director. "While we're recognizing now it's going to cost the general fund, everyone realizes that it's better than what we had."

I'm not going to lie and say that I haven't enjoyed the P&L District, hell, I go to The Flying Saucer 3 times a week. What I am saying is that KC threw their money away and subsidized an unprofitable development all the while promising to make the city richer. It was all lies and I hope Portlanders see through the lies when it comes their turn.

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