Are We at a Historic Crossroads as a City?

PUBLISHED SEPTEMBER, 2023

Kansas City has been here before. 

Half a century ago, this community was awash with change: A new international airport was taking shape on the outskirts of the city. The sports world stood in awe of a breakthrough stadium design with the Jackson County Sports Complex. A new arena in the West Bottoms would thrust us into the national conversation about a presidential election.

Well, times change. The Royals are scouting Downtown locations for a new stadium, and Arrowhead is in line for a significant makeover. Kemper Arena has been reduced to a community athletic center. The final remnants of that original KCI is being swept away with the completion of the single-terminal facility.

It’s a perfect time, then, to sound out the region’s business community on how the civic agenda should be revised. We did just that with this year’s Ingram’s 250 report, polling a powerful, influential, and affluent executive class on where the new lines should be drawn. Their observations—should—carry considerable clout with the public-sector figures who will have to sign off on planning, zoning, and regulating the reshaping process.

They will have much to consider.

FIFA and Beyond

By an overwhelming margin, respondents identified two major emerging opportunities for the city—a Downtown stadium for the Royals and the 2026 FIFA World Cup. 

Curiously enough, not one of the 250 executives polled on the question of The Next Big Thing argued against the idea of building a new pro baseball stadium Downtown. Given where the Royals are in their processes, it seems fait accompli that they won’t be playing at Kauffman Stadium a few years from now. 

So perhaps it’s not surprising that virtually every one of the executives who weighted in see that development as an opportunity to add a missing piece to Downtown’s appeal.

Beyond that, last year’s announcement that this would be one of three U.S. host cities for the global soccer tournament was a match that has ignited an intense interest in showing the world what Kansas City has to offer, not just as a soccer capital, but as a place to do business, establish a career or raise a family.

“Kansas City is at the forefront of so many things right now—business and industry, sports, culture,” says Doug Wolff of Security Benefit, who can appreciate those opportunities from the vantage point of Topeka. “It’s great to have an airport we can be proud of as we garner national and global attention as a World Cup host site and future home of the first women’s sports-focused stadium for the Kansas City Current soccer team.”

Anne St. Peter, co-founder of Global Prairie, sees the soccer connection as a differentiator. “With the KC Current and their first-ever soccer stadium in the United States built specifically for a professional women’s soccer team AND the national headquarters of Women Leaders in Sport being in KC, I think Kansas City should lay claim to being the leading U.S. city focused on supporting the growth of women’s sports,” she said.

For the most part, though, the World Cup is seen as a lever to bigger and better things. 

“We have great momentum—Super Bowl, World Cup, NFL Draft, great stuff,” said Ramin Cherafat of McCownGordon Construction. “But we also need to develop and implement long-term economic-growth strategies for our region by growing, attracting, and retaining great companies for the long term.”

Shook, Hardy & Bacon chair Madeleine McDonough concurred. The region can advance, she said, by “attracting new major corporate headquarters to the region while focusing on early childhood education, affordable housing, and safer neighborhoods, all of which will help attract new businesses to our community.”

One way to do that, said St. Peter, would be “to continue to highlight our strength in the life sciences—from animal health to digital health to human health—KC has significant assets worth celebrating.”

At CommunityAmerica Credit Union, Lisa Ginter sees a convergence of opportunities. “The new airport, the NFL Draft, and now, the 2026 FIFA World Cup are all leading indicators that we have so many exciting opportunities ahead for Kansas City,” she said. “Focusing on improvements to our transportation infrastructure and reducing crime will be important for us to tackle if we want to maximize our full potential.”

To her point on infrastructure improvements, Damon Anderson of Tallgrass Freight is prepared to issue a challenge. “Let’s dream big: Why not imagine the idea of light rail running parallel to 435 all around the metro?” he asked. “The benefits of light rail connecting both sides of the metro would transform the entire city.”

Kathy Nelson, whose Greater Kansas City Sports Commission Foundation will play a key role in formulating the World Cup strategy, also chimed in with a two-word need: “Regional transportation.” Tammy Peterman at The University of Kansas Health System, believes that “the work on expanding the streetcar in a way that connects different parts of our city is important.”    

Precisely, said MMGY’s chief executive, Katie Briscoe. “Continuing to connect different parts of the city through mass transit” is huge, she said. “I’d love to see light rail transit from our new airport.”

Commerce Bank president Rob Bratcher sees potential in the power of transit—with a caveat. “It’s a combination of tackling key areas that could hinder or halt the momentum attracting many new companies and major investments in our region,” he said. “One major area to focus on is the need to take a fresh look at our transportation infrastructure.” But do it right, he says. “Due to the lack of planning, it changed the quality of life in high-growth cities like Austin and Nashville.” 

Bill George of WHC Worldwide stressed a health care/public safety theme. “We need a metro-wide response to the lack of mental-health facilities and rising violent crime,” George said. “It makes no difference how many wonderful attractions we have unless people feel safe to venture outside and enjoy them.”

Health care, naturally, is the lens through which Bob Page views opportunities at The University of Kansas Health System. “I will admit to being biased, but I believe the next big thing is to make Kansas City a national hub for medical research and advanced medical care,” he said. “The new cancer facility we are building with the Medical Center is one example of how that will happen.”

That could be the linchpin in elevating the region around the hospital, which abuts Midtown along State Line, into a destination medical facility “where research, education, and patient care come together to attract new business to the metro, national and international researchers who will create new medicine for some of the most challenging conditions and patients from around the world” for cutting-edge care.

The journey to make Kansas City a destination for cancer care, said his Kansas City market president, Tammy Peterman, requires “supporting those at the bench and the bedside to work together to develop the next generations of cancer treatment.”

UnitedHealthcare’s Rob Broomfield, by contrast to most, doesn’t think Kansas City needs a “next big thing.” He’d prefer to see a series of smaller wins being strung together into major victories. It’s all about priorities, he says, ones that benefit the region and its people. “Let’s focus on helping them all be more successful.”

Greg Graves, who is keeping plenty busy with board service following his 2016 retirement from Burns & McDonnell, says the concept of identifying the region’s Next Big Thing is “a terrific question. The obvious answer for which I am a big supporter is a new stadium for the Royals, but let’s not make it that easy, either. My vote is the South Loop ‘lid’ project, an idea that goes back to Mayer Kay Barnes and City Manager Wayne Cauthen. One of my favorite ‘no bad ideas’ meetings ever!”

In any event, said Jeff Spencer of Holmes Murphy & Associates, the time has arrived to “resolve the location of the Royals Stadium once and for all.”

Mike Rainen, one of the city’s most prolific and astute property investors, issued a clarion call focused on what can easily be called the heart of Kansas City: “Locals should step up and redirect the vitality and safety of the Plaza,” he said. “It is a national, historic gem that has been managed by out-of-towners to their own detriment and recent loan default. Now, Kansas Citians need to return it to its old luster.”   

Recession Odds

Poll 250 executives from diverse business sectors on where the economy will be trending between now and the end of next year, and you’ll get just as diverse a range of opinions. Some sectors are feeling a tightening right now, but for the most part, these executives say they are charging ahead with plans for growth and finding the talent that will fuel it.

Dimensional Innovations’ Tucker Trotter isn’t about to let any gloomy forecasts interfere with his design team’s work. “I can only worry about what we can control, so I try not to focus too much attention on those concerns; they are always out there,” he says. “But I’ve always believed there is more than enough work for our team regardless of what is happening in the world.”

Even the white-collar offices of law firms are left to ponder the direction of the economy.

“Like most businesses, we have been preparing for the possibility of an economic downturn,” said Allison Murdock, managing partner at Stinson, LLP. “This year, we substantially deepened our bench in key practice areas and expanded our geographic footprint in response to our clients’ needs. We have been strategic in our growth, and by having diversity in our practice areas, we are well-positioned to weather economic shifts.” 

Brad Lager of rail-infrastructure giant Herzog Enterprises is non-plussed by the talk. “I have given up trying to predict when the next economic recession will occur,” he said. “While we have continued growth in all of our operating companies and their respective divisions, there are others in our industry that are experiencing a reduction in volumes that would reflect a recession is near.”

Mike Boehm, a banker by day but the long-time mayor who helped orchestrate the renaissance of a new Downtown Lenexa, said he believes that “the anticipated 2023 recession has been delayed into 2024 with aggressive monetary policy, but all indications are there will be continued economic stress during 2024, with a recession likely. Current federal debt levels (should) make it nearly impossible to use fiscal policy successfully. My guess is there is a 60+ percent chance of a recession during 2024—whether it will be a soft landing remains to be seen. That said, it’s an election year; nothing will surprise me.”

Associate Wholesale Grocers’ CEP David Smith, wrapping up a long career in grocery distribution for the region’s second-largest private company, said that “from a technical recession with two-quarters of GDP declines, I would place the odds at 2 in 10. However, many of the shopping behaviors of consumers in our stores already fit the historical metrics for recessionary buying patterns. This means we are already acting and managing our business as though we are in a recession.” 

Tyler Nottberg of U.S. Engineering said he’s seen evidence of that, as well. “I read a Bloomberg article recently that said more than a third of Americans already believe we’re in a recession because of the strain on their budgets,” he said. “So, regardless of whether it meets the technical definition, people are still feeling the pain of significant inflation. Ultimately, the economy has the potential to stagnate as we continue to contend with cycles of rising costs, supply chain volatility, and international instability.”

At Security Benefit in Topeka, Doug Wolff said his retirement services giant is “a conservative company, and we prepare for many different economic scenarios. Throughout our history, we’ve endured market upheavals, natural disasters, global political crises, and two pandemics. In fact, one of our best years of financial performance occurred in 2020 because we were nimble enough to pivot.”

The fact is, in an era of high inflation, those in a position to influence economic outcomes are in a delicate position.

Regarding the Fed’s ability to orchestrate a soft landing, Commerce Bank Kansas City’s Kevin Barth said, “I am cautiously optimistic, but we must remember that the cost of taming inflation is to slow down economic activity by raising interest rates.”

That’s in large part why Mike Rainen expects a move downward in the stock market by the end of this year “because fundamentals are showing weakness,” he said. “The office market is going to trigger large defaults and will cause balance-sheet disruptions in banks and insurance companies. This could trigger a LOT of ugly.”

Ken Block of Block Real Estate Services knows exactly what Rainen is talking about in commercial realty as enormous levels of federal spending fuel inflation on one end, while on the other, the Fed is ratcheting interest rates up to control it. “As they attempt to lower inflation, the recession risk rises and becomes more likely,” Block said. “I feel we have at least a 60 percent chance of a recession in 2024, but we also have a continuing risk of high inflation.”

Tim Cowden, who has a front-row seat on growth opportunities as head of  the Kansas City Area Development Council, said the chances for recession increase proportionally with each Fed increase in interest rates. He pointed to existing soft patches, but also some areas of strength.

“Sectors of the economy have already felt it—housing, tech, and some consumer goods,” Cowden said. “Others are continuing at a good clip—EV, FDI/reshoring manufacturing, which the Bipartisan Infrastructure bill inspired. If we do go into a recession, I agree with the consensus among economists I have read that it will be a shallow one with a strong and quick bounce back. These are the economic times that KC typically fares better than other regions—particularly on the coasts.”

Seizing the Moment

Instead of speculating on the odds of a recession in the near future, Erin Stucky of Blue KC says, “I’d rather focus on how the Kansas City community comes together in trying times to ensure that everyone in our community is cared for. I have no doubt that whatever the next few years bring, we will face those challenges collectively with compassion and integrity.” 

DeAngela Burns-Wallace sees things much the same way in her new role leading the Kauffman Foundation: “I’m not a gambler, and I certainly won’t place odds on something as crucial to our well-being as economic stability,” she said. “So much of our work discusses how the systems we currently have in place only work for some. We need to have confidence that there will be guardrails to curtail the effects of economic downturns and provide equitable access and opportunity for everyone.”

And opportunity, said HCA Mid-west Health’s Keith Zimmerman, abounds.

“Our city has great attributes with area schools and districts receiving national awards, an affordable housing market, access to high-quality health care, and a nationally recognized business climate,” Zimmerman said. “The time is ideal for companies to relocate to or start up in Kansas City. And a couple more Kansas City Chiefs Super Bowls would not hurt.”