Is there such a thing as noblesse oblige when it comes to companies supporting downtown?
With the heart of Kansas City reviving its pulse the past decade or so — at least as a place to live and play — why have businesses pretty much been no-shows? Census numbers indicate that greater downtown, which stretches from the river to Crown Center, lost more than 16,000 jobs from 2001 to 2011, a 19.6 percent drop.
That’s 16,000 fewer potential customers for downtown’s bars and restaurants; a lot of empty space in office towers, and a continuing feeling the sidewalks are much quieter than they should be when things aren’t happening at the Sprint Center or Power & Light District or on a First Friday.
It’s also a no-confidence vote in the billions of dollars in major investments made during the last decade, much of it subsidized by tax breaks and hard cash from City Hall.
For generations, old-line families including Hall, Bloch, Kemper, Deramus, Dunn and other civic leaders located their businesses downtown along with the major law firms, brokerage houses and other key companies. But many of those downtown icons aren’t growing, and some are shrinking employment.
The big job generators of the current generation such as Cerner, Garmin, Sprint and major engineering firms, except HNTB, are suburban. Other companies in the news lately for growth — and grabbing incentives — like Perceptive Software, Teva Neurosciences and Freightquote also like being beyond the Interstate 435 beltway.
It seems in other cities where suburban office parks are just as alluring, a core of key busineses still likes downtown. Minneapolis sustains a strong downtown despite fierce office competition. Phil Kirk, one of Kansas City’s best urban minds, also mentioned Indianapolis.
“If you study downtown Indianapolis, the Eli Lilly Co. and their leadership, take a look at what they did to transform downtown,” Kirk said.
In Detroit, Quicken Loans recently pledged to move 7,000 jobs downtown, part of a corporate reinvestment in that city, said Tom Murphy, a senior fellow at the Urban Land Institute and former mayor of Pittsburgh.
“Close to 15,000 jobs have been moved into downtown Detroit in the last year,” he said.
“I can’t say anything specific about Kansas City, but the trend nationally is people wanting to live in walkable places, and that is feeding the vitality of businesses.
“Suburban mayors in Chicago say they’re seeing Class A offices go downtown. That’s where a lot of their workers want to live.”
Kirk, the retired chairman of DST Realty, said the late Bill Deramus, the head of Kansas City Southern and progenitor of DST, emphasized a sort of corporate noblesse oblige, an obligation to give back to the community.
“He stepped up to the board and said we’re first a citizen of our city and then a corporation,” Kirk said.
That spirit carried on to DST, which, through its real estate arm, did much to develop and occupy office space on the west side of downtown.
Kirk referred to that attitude as “enlightened capitalism.”
“It makes sense, and not just to get a star on your lapel.... Capital exists in an environment and if it ignores the environment it’s in, ultimately it will weaken itself.
“The Blochs, Kauffmans, Halls, Soslands — that is the Kansas City spirit — and we need newer companies like Cerner that will step into that same mold.”
Tom McDonnell, the recently retired CEO of DST, who spearheaded much of the company’s downtown growth over the past 20 years and is now leading the Kauffman Foundation, was blunt about downtown. He pointed out that it still has a long way to go when it comes to attracting and keeping private employers.
“Downtown does not have any attraction for employers because the overall cost is unrealistic compared to the advantages,” he said.
He suggested the city needs to focus on additional parking, perhaps locating several underground garages with green space above where people can congregate, and use its incentive tools to encourage companies to come downtown.
Some also believe downtown Kansas City not only has the traditional suburban rivals, as do downtowns elsewhere, but additional competition in the form of the Country Club Plaza, a sanitized version of a downtown. And, in Kansas, it has competition from an entire state.
“I don’t think we can calculate the amount of damage this border war has done,” McDonnell said.