Catching The "100 Foot Wave": Local Politics Enthusiast Edition
Recently, I watched HBO’s documentary called “100 Foot Wave.” It’s a great documentary about big wave surfers who found this hidden spot in Nazaré, Portugal where when the conditions are right it’s home to biggest waves in the world. These are people are absolutely nuts but the really fascinating thing about the whole thing was the way they guess there’s going to be a chance at a huge wave.
They constantly monitor weather and figure out what storms are predicted to have the biggest swells. Then they hop on airplanes, some of them from across the globe, and rush to get to Portugal and prepare.
And then they catch the “100 Foot Wave.”
Today, I’m happy to report (a little tongue in cheek), that Kansas City local government enthusiasts caught our own 100 Foot Wave. A lot less dangerous and perhaps the same amount of crazy.
We got reports a few weeks out today was going to be the day. We knew Transportation and Infrastructure committee was going to debate and probably decide on the hotly contested airport concession contract and then it was announced that Hotel Bravo was going to be heard. It was like the swell had unexpectedly intensified.
We were ready. Ready for a ride full of adrenaline, drama, and intrigue.
Here’s the recap.
Airport Concession Contract
First up was the big one. It was Transportation and Infrastructure committee having to decide if they were going to move forward and accept the winning bid as the new terminal’s airport concession contractor.
As an aside, this debate was intriguing because the airport is kinda a weird place. It’s mostly self-contained and fully funds itself. Unlike many other decisions from water services, tax incentives, re-zoning, etc., most of the decisions don’t really affect us that much. It was interesting to watch the debate with really no opinion. Obviously, I want the city to not get screwed and want the airport to feel local, welcoming, and not crazy overpriced but I don’t really care that much.
There were a few issues at play:
The normal procurement process that doesn’t get critiques got throw into a highly public and emotional bid. A lot of the time, city staff along with a selected councilperson(s) help chose the winning bid based on criteria in the Request For Proposal. The theory is that in case the winning bid gets rejected the city is in a better negotiating position and this helps prevent at least some political interference where people prop up their friends.
This type of process doesn’t get much scrutiny with routine projects but the airport concession project is big and very public since local brands are going to win or lose.
There was also a lot of questions about transparency for council people. But for a few weeks, they had the opportunity to review the bids in full. These unfounded complaints continued up until the committee’s vote.
There were issues raised about Councilman Dan Fowler being on the selection committee since he had hired Jason Parson and his firm to run his campaign, Parson ended up being on the winning team. The Kansas City Star hammered that part of the process and the appearance of the conflict of interest. This was complicated by the fact that the winning bid was unanimous and the matrix that was released to the public clearly showed the winning bidder, Vantage, to have been the best bid.
Like a lot of things dealing with finance, it all sounds like funny money. Trying to bring council, the public, and at times staff up to speed on fee structures, build out costs, lending mechanisms, etc. was a gargantuan task and one that some council people seemed to use to their advantage to cast doubt on the process.
So what the hell happened?
I knew it was going to be dramatic but man did it get wild. I missed some of the public testimony but listened in to most of the rest of it.
This was the second time the committee heard the ordinance (or the contract) so they just jumped into it.
There was some questions, some talk about a closed session to discuss proprietary information not released, some public testimony. And then the losing bidders decided to waive the confidentiality so it could be discussed in public. There was a recess.
And then it became clear that at least 3 of the 5 committee members wanted to just vote on the ordinance.
Teresa Loar and to some extent at the moment Katheryn Shields took objection to that.
Loar said she had questions and began to rattle off a highly detailed opposition research packet and extremely specific questions about the winning bidder and their team. She then started calling up some of the losing bidders to make their case.
“Public” testimony began to hijack the meeting in an attempt to try and thwart the vote. There were jabs thrown at city staff.
Finally as Vice Chair Eric Bunch began to get control of the meeting again and there was a motion for the vote, Loar walks out and then Shields logs off zoom. The committee loses quorum and can’t vote.
But wait!
The mayor who is the committee chair but was out of town rushes to Zoom like Kamala Harris running to be the tie-breaking vote in the senate.
The committee after a lot of drama and some procedural maneuvering moved it out of committee recommending passage through full council.
My take: it appears from everything released to the public and watching the hearings that Vantage, the winning bidder, should’ve won. Was it bumpy? Yes. Should someone look into why some councilperson(s)? were adamant about another bidder winning? Yes. Am I excited Vantage included lots of minority and women-owned businesses? Also very much yes. Do I look forward to sipping a Martin City Hardway when I escape KC’s winter wonderland? Absolutely yes.
Hotel Bravo
Whew! That was just round 1. Waves were still good so we decided to get dragged out again by our jet ski.
So there has been this hotel proposal floating around for a few years called Hotel Bravo.
It’s proposed to go right next to the Kauffman Center and be a 5-Star hotel.
Great! What’s the catch? Oh right, they want tax incentives.
The proposal’s fundamental argument is that Kansas City NEEDS a high-end, 5-star hotel but the market cannot support the hotel rates for that high-end, 5-star hotel so they need tax paying support.
The developers' for the last few years have made some wild and probably ill-advised statements like:
“It’s like if you went in to buy a car and you wanted to get a Mercedes and they didn’t have a Mercedes dealer” (basically saying we didn’t have 5-star hotel ready when someone asks for one.)
“The market is dominated by three and three-and-a-half star hotels, what I call beige hotel”
“[The banks] won’t support it...It’s just the realism of the market,” Holtze said. “You go to a banker — first of all, do you know any bankers? Because they’re conservative.”
And none more egregious than the argument
“There’s a direct correlation between population growth and upscale hotels.”
The most shocking statement was about population growth. The developers each time they have presented included this very strange graph with cities’ names misspelled essentially arguing that cities grew faster because they had luxury hotels. They kept mentioning Nashville over and over.
No it wasn't job growth or increase in housing or higher education opportunities, it was because of luxury hotels.
After they first presented, I actually tried to look up any studies and real evidence making this case. There wasn’t any. This was verified by Erin Royals who I would trust with my life if I was kidnapped and the hostage takers required a quick and thorough JSTOR search.
It’s just another weird, half-assed argument to bolster their position.
But let’s back up. Tax incentives can be good and are useful. I’ve always thought of them as us as a community exempting people like developers out of the social contract of taxes (or giving them public dollars) to achieve a goal.
That could be more housing, more jobs, and even more hotels. But Kansas City has recently been sharpening their pencils more about what specifically needs to be included in those more general goals like for example housing needs to have some affordability requirements.
Even if subsidized hotels were still considered a need and goal for the city, the argument for this proposal seems to have been continually ripped apart by even the most pro-development people.
It was rejected by the TIF commission (not a common occurrence) and this would mean the council needs 9 votes (a supermajority to pass it)
There have been calls that the hotel inventory is currently too high in the downtown area for the demand even before COVID
Hotels are still recovering averaging 40% lower capacity than pre-pandemic
There are several subsidized hotels in the area including the brand spanking new Loews Convention center hotel, which we still pay $4 million per year for catering because of a bad contract
Some hotels are being built without incentives
Visit KC our tourism group who normally cheers this type of development opposes it
So even if you set aside the philosophical arguments that it’s too much incentive for a luxury hotel, the market is saying it isn’t needed right now and probably wouldn’t do that great.
Very rarely do we get an incentive ask that there really is no other angle than “rich people want a hotel.” You could make legitimate arguments about Class A office space or even luxury housing being subsidized to some extent but this seems to be missing all of the marks.
We will see if it moves forward. It was passed out of committee “with no recommendation.” And as someone told me today, “developers rarely let something come up for a vote if they don’t know they have the votes.”
If that’s true, I hope we all can receive a consolation prize of never having to hear about Nashville again.
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