How Kansas City plans to fund the Royals’ $2.05 billion stadium
Subscribe to our free newsletter today to keep up to date with the latest construction news.
Kansas City has provided new details on how it plans to finance its $600 million commitment to the Kansas City Royals’ proposed stadium at Crown Center, putting future tax revenue at the center of one of the city’s largest development projects.
The stadium project is now estimated to cost about $2.05 billion, including development and financing costs. Kansas City would provide $600 million, while Missouri and other public sources would contribute another $540 million. The Royals would provide about $911 million.
That means public sources would cover about 56% of the project cost.
The financing plan has implications beyond professional baseball. It shows how Kansas City plans to use long-term borrowing and expected tax growth to support a major infrastructure project while construction plans move closer to a 2027 start.
The Kansas City Council approved the city’s $600 million commitment in August by an 11-2 vote. However, the detailed tax increment financing plan still needs council approval before it can take effect.
The financing relies on future tax growth
Kansas City plans to borrow $510 million for the stadium and related facilities. Another $90 million would go directly toward infrastructure.
Tax increment financing, known as TIF, would play a major role in repaying the debt.
TIF allows some of the additional tax revenue generated by new development in a defined area to be used to cover project costs. In this case, Kansas City expects revenue from the stadium and surrounding district to help repay bonds issued for construction.
For 23 years, half of the increase in sales and earnings tax revenue generated within the district would go toward project costs.
Several other city taxes would contribute for up to 30 years. The plan also includes a new sales tax of up to 1%, along with revenue from a stadium impact area, restaurant and gaming taxes, parking and surrounding development.
These sources are expected to cover hundreds of millions of dollars in project costs over several decades.
The structure means the financial performance of the district will matter long after construction is complete.
If economic activity meets or exceeds current projections, new tax revenue could provide much of the money needed to repay the bonds. If revenues fall short, Kansas City would still be responsible for making the payments.
That exposure is one of the main issues surrounding the financing plan.
The Royals would have no obligation to cover shortfalls on city-issued bonds under the agreement approved in August. Missing payments could also affect Kansas City’s credit rating and increase the cost of borrowing for other projects.
The arrangement highlights a wider issue facing cities that use tax-backed financing for large development programs. The initial public commitment is only one part of the equation. Long-term results also depend on whether the development produces the economic activity assumed when the debt is issued.
That is especially relevant at Crown Center because the stadium is expected to form part of a much larger mixed-use district.
The Royals and Hallmark announced plans in April for a development valued at about $3 billion. The proposal would move the team from Kauffman Stadium to a new ballpark on the site of Hallmark’s headquarters.
Construction planning moves toward a 2027 start
The financing process is continuing as the project moves further into preconstruction.
The Royals selected Mortenson and McCownGordon to build the ballpark. JE Dunn has been chosen to develop the surrounding district.
The current timetable calls for preconstruction work to begin in September 2026, followed by a demolition permit in January 2027. Groundbreaking is planned for May 2027.
The stadium is expected to reach substantial completion by the end of 2029, with the first Royals home game at the new ballpark scheduled for March 2030.
That timeline creates a multiyear pipeline of work for the regional construction market.
The TIF plan estimates about 16,000 job-years of direct, indirect and induced construction work. A job-year represents one person working for one year.
The project documents also estimate about $1.1 billion in labor income during the construction period.
Those figures are projections rather than measured economic results, but they indicate the potential scale of the labor and procurement requirements.
A project of this size is likely to require large volumes of concrete, structural steel, electrical equipment, mechanical systems, seating, lighting, telecommunications equipment and other materials. Road, utility and public-space work around the site could create additional opportunities for contractors and suppliers.
The surrounding development may extend that demand beyond the stadium itself.
For businesses in construction, engineering and manufacturing, the important issue will be how quickly funding approvals translate into procurement packages and contracts.
The longer-term case rests on development around the stadium
The economic case for the project also depends on what happens after construction ends.
The development plan estimates 2,275 permanent jobs associated with the project. However, 2,075 of those are existing jobs expected to be retained. The plan therefore estimates a net increase of about 200 permanent positions.
That distinction matters when assessing the expected economic impact.
Job retention can support an existing local tax base, while newly created jobs represent additional employment. Combining the two figures without explaining the difference can give an incomplete picture of the projected impact.
The stadium agreement also includes at least $55 million in community investment over 30 years.
The money is expected to support programs including housing, public art and the Negro Leagues Baseball Museum.
Supporters of the development have pointed to its potential to attract investment, visitors and business activity to the area. Opponents have questioned the level of public funding, the city’s financial exposure if tax revenue falls below expectations and the decision to proceed without another public vote.
The next immediate decision sits with the Kansas City Council, which must approve the TIF plan before it takes effect.
For businesses, the project is moving from a stadium proposal toward a defined construction and financing program. Builders have been selected, a timetable has been published and the city now has a clearer plan for funding its share.
The longer-term financial result will depend on whether activity around Crown Center produces the tax revenue built into the financing model.
Kansas City is therefore making more than a major infrastructure investment. It is committing future tax revenue to a development strategy whose financial performance will be measured for decades after the first pitch in 2030.
Source
