Make sure you read that contract...
 By Mark Forsythe The Kansas City Post On April 11th the City Attorney received a letter from Cordish's attorneys regarding the status of what they feel should be an exclusive festival liquor license for the Power & Light District. Tony Botello at TonysKansasCity.com was the first to hit the blogosphere with the news. It seems that Cordish is upset with current legislation in the works down at Jefferson City that would allow the creation of "festival districts" throughout the city of Kansas City. I'm not an attorney, but I do know how to read. The letter repeatedly references Section 9.1(k) of the MDA (Master Development Agreement). I managed to obtain a copy of the MDA. All 184 pages of it. 9.1(k) basically says "you have to fulfill 9.1(a-j) or we won't close the deal." Fair enough. Any contract expects both sides to perform. I think what Cordish is most worked up about is Section 9.1(g). Here it is in its entirety. (g) Liquor Licenses. Developer requests that the City shall use its best efforts to enable Developer or its designee and any tenant of the Urban Mixed-Use Project designated by Developer to obtain and utilize for a term of ninety-nine (99) years commencing on the Substantial Completion of the Urban Mixed-Use Project an arena type liquor license similar to the arena license utilized at Power Plant Live, Baltimore, Maryland or an Entertainment Destination Center License similar to the license issued for Fourth Street Live, Louisville, Kentucky. Such license is intended to permit designated Tenants to sell and serve open containers of alcoholic beverages in the common areas of the Urban Mixed-Use Project and on the streets and sidewalks surrounding the Urban Mixed-Use Project and shall permit their customers to consume such alcoholic beverages in such areas. The parties acknowledge that a change in Missouri law may be required. The letter stipulates that while the advantage of exclusivity is not explicitly mentioned in the contract, there were verbal assurances and subsequent actions by the City which led Cordish to believe that they would continue to have the only festival license in Kansas City. Then something changed and in the past year not only is the City failing to protect that exclusivity, they are actively lobbying to eliminate it by passing new legislation that would allow festival licenses throughout Kansas City. The irony is not lost on me that when the City Manager began pressuring Cordish last year to live up to their verbal promises of having the complete district open by the fall of 2007, the developer was quick to fall back on the "read the contract" defense saying that while they may, or may not have implied they would make an attempt at opening, the actual contract gives them until the end of 2008. Basically they told the City to go pound sand. Now with the tables turned, Cordish finds itself in the weak position of exclaiming "but you told us..." and the City attorney can simply say "read the contract." Digging a little deeper, I have to wonder. Why expand the festival licenses? Why now? What has changed? According to Cordish's attorneys, "The passage of the legislation creating festival districts is bad public policy that our client believes is motivated solely by individual political contributions to individual Council persons." Political contributions affecting our city government? Say it ain't so! But please do say who gave what to whom. Inquiring minds want to know! Vague implications of graft don't carry much weight. I'm not convinced that the loss of an exclusive festival liquor license will result in decreased revenues for the Power & Light District. But in the final analysis I have to say I think it is counterproductive that our City government is pursuing legislation that could possibly (and I'm only conceding could) have a detrimental effect on a project in which we are all so deeply invested. That MDA may have been signed by a previous administration, but we the taxpayers are left to pay for it. As my dad used to say "you dance with the gal ya brung" and in this case, like it or not, we brought Cordish to this dance. It's up to us to make the best of it. |
posted by Mark at 10:08 AM
Comments on "Make sure you read that contract..."
-
Anonymous said ... (10:53 AM) :
-
Brent said ... (11:19 AM) :
-
confused said ... (11:52 AM) :
-
Mark said ... (12:19 PM) :
-
confused said ... (12:28 PM) :
-
Mark said ... (12:41 PM) :
-
confused said ... (12:56 PM) :
-
Mark said ... (1:05 PM) :
-
mainstream said ... (1:45 PM) :
-
john said ... (4:10 PM) :
-
Anonymous said ... (4:49 PM) :
-
mainstream said ... (5:04 PM) :
-
mainstream said ... (5:07 PM) :
-
Anonymous said ... (5:33 PM) :
-
ray ray said ... (5:58 PM) :
-
mainstream said ... (6:44 PM) :
-
Alan Birch said ... (9:47 AM) :
-
Anonymous said ... (10:23 AM) :
-
ray ray said ... (1:03 PM) :
-
inafunkaboutthefunk said ... (9:33 AM) :
-
inafuunkaboutthefunk said ... (9:38 AM) :
-
Anonymous said ... (12:56 PM) :
-
Anonymous said ... (12:09 PM) :
post a commentCordish must not have ponied up when mayor Funky went looking for money to cover up his campaign finance problems. Or then again, maybe they did.
Actually, I'm not sure any of this has really crossed the city's mind, but it seems to me that increasing the festival license is exactly what the city needs to do following the new smoking ordinances. The festival license would quickly allow more businesses to be able to allow people to drink outside of their bar/restaurant where they can smoke, which would dampen the impact that the smoking ban may have in the short term on these establishments. Seems like it's exactly what the city should do -- whether Cordish is upset or not.
Ok, lets say we have more than one festival district. If each district increases sales, isn't the city still good? Isn't the point to increase the whole pie, not just Cordish's share?
Lets say I have $100. I will only spend that if I can drink in a festival disctrict. Does it matter if I spend that money at Power and Light or in Westport? Doesn't the city get the same amount of taxes on what I spend?
I mean, if we steel $100K of sales from Power and Light and move that to Westport. Doesn't the city still get the same amount of tax revenue?
Does the money have to be spent at Power and Light for the city to get the most revenue?
"Does the money have to be spent at Power and Light for the city to get the most revenue?"
It is my understanding that the tax revenues (TIF) specifically within the P&L district go directly to paying the bonds. Revenue spent elsewhere does not.
In a sense revenue spent elsewhere will be spent for the P&L bonds because if the P&L TIF fails to perform the shortfall must be made up from the general fund.
In a sense revenue spent elsewhere will be spent for the P&L bonds because if the P&L TIF fails to perform the shortfall must be made up from the general fund.
So why do we even care what Cordish thinks? Shouldn't the question be "what will make the city the most money?"
If 3 festival districts bring in more revenue than 1, then it seems like a no brainer. Who cares if Power and Light gets less money, if the city as whole gets more money.
But in the final analysis I have to say I think it is counterproductive that our City government is pursuing legislation that could possibly (and I'm only conceding could) have a detrimental effect on a project in which we are all so deeply invested
I guess I am not understanding your concern. Should the city's first priority be "increase revenue city wide" or "increase revenue in P&L"?
Confused,
It's the EATs that will get ya! Economic Activity Taxes. Because the P&L District is it's own TIF district, all the sales tax charged on those beers being sold is recaptured and directed exclusively to payoff of the bonds.
A beer sold anywhere else in the city does not have those earmarks on the taxes, so the standard portions of the 8% or so have to be allocated to various funds by statute, leaving far less going into the general fund and then eventually making its way to P&L bond debt service.
1 beer sold in P&L = 100% EATs to bond debt service
1 beer sold elsewhere equals much less than 100% EATs to P&L debt service
It depends on your point of view I guess. I agree that expanding revenue city-wide should be a priority but am not convinced that hamstringing our earmarked debt-service funding stream for the P&L TIF bonds is the way to do it.
Put another way. Would you rather have the EATs going directly to paying off the P&L bonds or would you rather have the city council make the budgeting decisions of what they're going to cut in order to re-direct general fund dollars to required debt service?
Ok, I see where you are coming from now. But it sounds like a big shell game.
I mean saying we are going to cut service A by $10 because we have to pay off bonds would be bad. But if service A would have $15 less revenue without the festival districts, then are we really better off by not having it?
Is limiting city revenue because the accounting is too hard, really a good fiscal policy?
It sounds like the real problem is the ear marks.
"It sounds like the real problem is the ear marks."
Check and Mate! That sums it up nicely.
Thanks for reading.
I would say that it is the responsibility of our city council to represent all of their constituents in as fair and balanced a manner as possible.
No one can say whether open containers in Westport will materially hurt the P&L district. Facts, anybody????
It's not the business for the city to grant monopoly rights on entertainment. Did Cordish invent drinking in the street??
Even if this was a handshake, as you pointed out so was the opening date. If it isn't in writing, you cannot count on it. Handshakes are made to be broken legal promises aren’t. That's simple common and business sense. If it wasn't important enough and acceptable enough to get a legal commitment, that you simply can't count on it.
I do not think it is appropriate for the city to give out monopoly rights on this. I’ll ask again, did Cordish INVENT outdoor drinking? Let me ask it another way – what has Cordish done to deserve a monopoly right? (Oh, they accept millions in taxpayers subsidies,, what an accomplishment) The Plaza has outdoor dining and drinking - and horse darwn carriages. Does it make sense to say no outdorr dining is allowed anywhere else?
Cordish can ask for whatever it wants, but it's the responsibility of government to govern and regulate in a generally fair, common sense manner..
Cordish doesn't deserve anything except what was agreed to in writing and what is commonly acceptable in this town.
Mainstream,
While I'll admit to being just poor country white trash, where I come from, handshakes aren't meant to be broken. Then again, we were so poor that our word was the most valuable thing we owned. I guess it is different in the city.
all of the other numerous reasons that Cordish is wrong here aside, as a matter of public policy , there should not be a sustainable competitive advantage based on State Statute. If Cordish wants to crush the competition, let them do so by they way they operate their business - Not because there's a special satte law that applies only to them.
John, Yes and No to your statement that "it must be different in the city."
You're oversimplifying the whole situation. Let me put it in terms you just might be able to understand:
Your Momma passed away a few years back, and your Daddy continues to live in the farmhouse. Your Daddy wills his house to you after he, in turn, shuffles off his mortal coil. You look forward to moving into the house because it reminds you of all of those wonderful childhood memories. You're all moved in, and go to bed at 10:00 pm, enjoying the quiet country again and familiar surroundings. You're woken up at 11:30 pm because Nellie is now yodelling outside your bedroom window. You tell her to stop, you're trying to sleep.
Nellie tells you your Daddy promised her she could practice her yodelling at his house for forever, because her family can't stand it when she practices in her own house. "Plus your Daddy LOVED my yodellin'!!"
Your Daddy even shook her hand when he promised her. Problem is, you can hear Nellie's yodelling 5 country miles away, and you only farm 2 country acres.
So what do you do?
(a) let her keep on yodelling and buy some earplugs
(b) ask her to yodel someplace else
Get it?
Previous Council handshake, now we have a new mayor and council - if the "handshake" even occurred.
Circumstances change.
People change.
John, I've got news for you, life is just as complicated in the country as it is in the country.
Spare me the country spin nonsense.
Second to last paragraph above should read:
"John, I've got news for you, life is just as complicated in the country as it is in the city".
And my posts are apparently too complicated.
"John, I've got news for you, life is just as complicated in the country as it is in the city".
The problem is Cordish didn't shake hands with the entire city. Cordish shook hands with Kay Barnes. Kay Barnes is not in charge anymore.
Cordish shook hands with the old boss.
in 1996 Barnes led the council to pass a resolution basically saying more festive liquor licenses would be pursued. Cordish MAY have received a wink from somebody but the writing is the law and they were never promised exclusivity. Furthermore, promoting one area over another is so un-ethical it makes me sick. Increased revenue at P&L will likley come from other KCMO areas (Plaza-Westport) and revenue is revenue. The city will be writing checks from the general fund to cover the bad TIF's for a while.
The bottom line...anyone that supports giving the P&L an unfair business advantage over the hundres of locally owned businesses that have been making it happen for years with NO help from the city is clueless. The CITY didnt need Cordish to make downtown happen. The arena would attracted everyone and anyone and the best part...our tax dollars wouldnt have gone to subsidize Cordish. When you have somehting good you dont need to write checks to attract people. Pols dont understand real estate and we the taxpayers continue to suffer.
That's exactly right anon 5:33.
This from the article in the Star yesterday (Wednesday).
My understanding is the festival license that the neighborhoods want (Martin City, Westport, Brookside, et al) is not at all similar to what Cordish has. They would be limited to 20 events per year, not to exceed 48 hours in length. What I don't know is if that means 20 events total for all of the districts, or 20 events a year EACH. Either way, Cordish is only limited to 365 events per year.
What I find particularly amusing is Missouri senator in Joplin who might introduce legislation to take away Cordish's festival license. Of course, the council says that if Cordish rolls over on the the neighborhood festival license, they can probably make the Joplin guy's legislation go away. Classic! Maybe they should shake hands on it!
Anyone remember Cordish's "handshake" agreement to not charge for parking and the publicly built parking garages inside P&L? That sword swings both ways. Cordish can't break its promise to the city and they hold the city to its promises. If Cordish wants exclusivity, step one should be opening up free parking.
Cauthen Hhas sold our sole for a very questionable development
These Cordish people have balls. And have proven beyond a shadow of a doubt that lying through their teeth and lying in general is the coin of their realm. I wonder how much money they dispersed to council people, Mayor Barnes and anyone else they thought they needed to grease?
What cordish has proven it wants is a one way street paved with any and all incentives or advantages it can get for itself. Simple as that. I don't think they could be greedier if they thought about what they were doing.
I suppose it's possible that Cordish played nice in the other cities it has entertainment districts and only became greedy in Kansas City. It's possible, but unlikely. Why wasn't their M.O. known before we signed a contract?
It was known, but nobody would listen, which makes all of this back and forth conversation just worthless. Barnes wanted things and she gave what ever it took to get her game running. citizens with internet capabilities need to use it to recheck the "facts" that council and consultants pour forth when a proposal is backed. There were a lot of people who checked on Cauthern and his denver deals including the Pitch and everyone sat on their hands and let the man come to town and then provided him a way to bring his "CIMO" friends, which is related to the Cordish deal.