Kansas City’s efforts to foster entrepreneurship and build on its strong arts community are paying off for the area’s economy. But is the region doing enough to reach that next tier of cities, such as Austin, Texas, that often top lists for innovation and fast growth?
Should Kansas City even want to?
Kansas City Mayor Sly James and other area leaders on Friday took up those questions and others, discussing “Why KC Might Be the Next Austin” on a panel at Ink’s annual Middle of the Map Forum.
James said the city was blessed to have fine arts — opera, symphony, ballet, the Nelson-Atkins Museum of Art — along with several theater groups, its jazz heritage, and an array of artists and galleries in the Crossroads Arts District and other parts of town.
“We don’t have to compete,” James said. “All we have to do is build” on what the city already has.
Another panelist, Louis Meyers, executive director of the Folk Alliance International, agreed, calling himself “the poster child” for promoting Kansas City.
Meyers also knows Austin, as a former resident and a founder of its South by Southwest music festival, which helped put it on the arts map. More recently, Meyers lived in Memphis, where the Folk Alliance was based for eight years before it found a new home in Kansas City last year.
“We started with a list of 32 cities and … there really wasn’t a second choice in the 32 cities,” he said. “This was the only city where we left and we said, ‘We could live here.’
In many ways, Meyers said, Kansas City has what Austin did 25 years ago, from affordable living to a vibrant arts scene “that’s really about the local community.”
The mayor and other panelists also mentioned the area’s wide range of initiatives to encourage entrepreneurship, many of which trace back to the Ewing Marion Kauffman Foundation, which for decades has focused its grants and programs on education and entrepreneurship.
Dane Stangler, a Kauffman vice president, wasn’t on the panel but echoed its vote of confidence in the region and its strengths.
“Kansas City has to stop trying to be somewhere else — Charlotte, Austin, Omaha,” he said. “Just be us, and the best we can be.”
The panelists, Stangler and others interviewed last week sketched a picture of the area that included:
• A strong entrepreneurial culture that is fostering solid startups.
• A broad arts scene, with excellent facilities but some funding challenges.
• A city that impresses visitors and is getting better at selling itself but still could improve its marketing.
• A need for improvements such as mass transit and more downtown hotel rooms, to draw more convention and tourism business, and intelligent planning to avoid problems that plague rapid-growth cities such as Austin.
When the Greater Kansas City Chamber of Commerce came up with its Big 5 goals in 2011, one was to create the country’s “most enterpreneurial city.”
Peter deSilva, president and chief operating officer of UMB Financial Corp. and past chairman of the chamber board, led the effort. He sees substantial progress from the chamber efforts and other initiatives in helping startups with the challenge of getting financing.
“I discovered that Kansas City had more than adequate capital but not networking,” deSilva said in an interview Friday. “I was shocked to learn capital from here was going out to other parts of the country.”
Now, deSilva said, the chamber’s efforts and other initiatives have helped better connect investors and promising entrepreneurs.
“We’ve gone from an initiative to a movement,” deSilva said.
For example, the University of Missouri-Kansas City’s KC SourceLink, a small-business resource center, got a $1 million commitment from the U.S. Commerce Department. And deSilva went to the area’s large corporations and raised an additional $1 million, doubling the number of small companies the center could help.
Another initiative announced last fall is FlyOver Capital, a capital fund for entrepreneurial investment with more than $25 million pledged by a half-dozen anonymous private investors.
And deSilva noted the growth of the Kansas City Startup Village, which began in 2012 with the idea of gathering startups using Google Fiber. It now has “15 houses, 25 businesses and 70 employees,” deSilva said, and has attracted $7 million in second-stage financing.
“KC SourceLink, the Kauffman Foundation, the Bloch School (of Business at UMKC) — all these resources that aid entrepreneurs in this journey — are some of the best in the world,” deSilva said.
Any discussion of fostering startups — in Kansas City or nationally — is likely to include the Kauffman Foundation and its effects.
Stangler, Kauffman’s vice president of research and policy, said he had seen and felt big changes in just the nine years he had been in Kansas City. Part of that is “sensory,” he said, with “a much more vibrant atmosphere” toward startups.
And empirically, he said, a report he wrote last fall for the foundation found that Kansas City was third in the country for the greatest increase in the density of its high-tech startups from 1990 to 2010. And for concentration of just information technology startups, he said, Kansas City had the largest increase across those two decades.
But Stangler also said he would “hesitate to characterize this as something new,” because the upswing for local enterpreneurship “was a long time developing” and didn’t rest on any one factor, such as the coming of Google Fiber.
Stangler also said that though there’s empirical evidence of Kansas City’s entrepreneurial growth, “I don’t put too much stock” in various rankings of cities. Some of his Kauffman colleagues have done work with such formulas and ratings, “and you can tweak one small thing and get greatly different results.”
So he doesn’t think Kansas City should focus on such lists but continue the path it’s on.
The arts scene
Kansas City has a vibrant artistic community backed by a strong base of interconnected arts organizations. And in addition to its visual and performing arts groups, the city has strong venues led by the Sprint Center, which ranks among the country’s busiest arenas, and the Kauffman Center for the Performing Arts, which the mayor called “the finest in the world.”
One study estimated that cultural and arts organizations generated $273 million in direct revenue for the area economy. And James said the creative economy meant “millions and millions and millions” to the city in economic output, wage and salaries, and taxes.
What’s more, he said, it “opens up the door for people to think differently” and “makes life so much more fun and full.”
The Folk Alliance is another recent coup for the city. Besides moving its headquarters to the River Market, the group brought its annual conference to Crown Center in February and is committed to hold it in the area at least four more years. Besides speakers including Graham Nash and Al Gore, the event drew hundreds of musicians and others in the music industry for concerts, showcases and seminars.
How did Kansas City rate?
“At this point the response is as close to 100 percent (positive) as we’ve ever had,” Meyers said.
Another Forum panel on Friday, “Funding the Mona Lisa of Tomorrow,” told about a local entrepreneurship program for working artists that’s in the process of being exported to other cities, including Austin.
But the organizational representatives at the panel also expressed concern about the future of arts funding in Kansas City.
“We work in 15 different metropolitan areas, and Kansas City is exceptional, but I do think one really important thing is missing,” said Mary Kennedy, the executive director for the Mid-America Arts Alliance. “We’re lacking public funding for the arts in Kansas City. That’s something that has to change. Otherwise we can’t sustain this.”
Kennedy served as the moderator of the panel of the Arts Alliances’s Christine Bial; David Sullivan, the executive director of ArtsTech; Julia Cole, the Rocket Grants program coordinator for the Charlotte Street Foundation; Diane Scott with Artist INC; and Paul Tyler, the grants director for ArtsKC.
Artist INC, which uses workshops, seminars and counseling to build the entrepreneurial skills of artists, is now working to train other communities in the mid-America region. Beginning this summer, satellite programs will be launched in Austin, Omaha, Little Rock and Oklahoma City.
“Artists are one of the best opportunities to build a competitive advantage in the 21st century and make this the kind of place where people want to live and thrive,” said Tyler.
The ability to attract recruits from outside the area and foster a positive image has led corporate donors to rethink how they are supporting the arts, according to Kennedy. In addition to funding, corporations are now turning to in-kind contributions — offering disused space for artist exhibitions, for example. Cole noted that the Charlotte Street Foundation is in discussions with Missouri Bank to build out an artist-in-residency program.
Cole, who sat on James’ Task Force for the Arts, stressed that regional awareness of the arts and cooperation were the keys to the Kansas City arts scene moving forward.
“Public funding is about the public will. We have to have that compelling story, and I don’t think we’ve done a good job of telling that story,” said Cole. “But I think it’s happening now, and that’s really exciting.”
On the “next Austin” panel, James said Kansas Citians should “avoid our own inferiority complex” and “get a little swagger on.”
The city suffers somewhat from a divided brand, some panelists said, cast as the City of Fountains, more recently as the Creative Crossroads, and always as a barbecue mecca.
The city “used to do so much better” attracting conventions, James said, but “we’ve allowed ourselves to slip down.” The mayor added that Jon Stephens, interim president and CEO of the Kansas City Convention and Visitors Association, was doing “an excellent job” turning the situation around, but the city still needed more hotel rooms and better transportation for tourists.
The mayor has been a big backer of the city’s coming streetcar line on Main Street, and James and Stephens agreed that Kansas City had to get “serious about transportation” so visitors and residents could easily move around and get to know the city.
It also was mentioned on the panel that Austin was adding 2,000 hotel rooms and by this time next year would have four times Kansas City’s number of downtown hotel rooms.
Stephens, who also was on the panel, said it was important to remember that drawing 22 million people to the city through conventions and tourism greatly benefited the area economy. As a result, he said, putting resources toward convention infrastructure and promoting tourism were not at the expense of other things but added to other efforts to help the economy.
He also said residents should realize the area’s strengths and promote the city.
“I think the biggest thing we could do would be to have every resident view Kansas City as a convention-goer or tourist just once,” Stephens said.
Besides seeing the city’s attractions and strengths with fresh eyes, he said, the experience would “reveal some of the more authentic challenges” the city faces.
Stephens also said the city’s various interests needed to collaborate on developing and spreading promotional efforts.
“There are 10,000 stories, but we need to unify our message,” he said, “to figure out how to tell one story about why they need to look at Kansas City and then give them the tools to hear all 10,000 stories.”
Research and feedback with visitors and potential visitors boil down to one of three responses, Stephens said: “They like us; they really like us; or they don’t know about us.” So the city is fortunate in a way, Stephens said, in that it has a clean slate with so many people.
And with growth comes change, Stephens said, and “if you don’t embrace it, you’ll be run over by it.”
That has happened in Austin, said Meyers and another panelist, Shane Guiter, chief operating officer for KCPT and its radio station, the Bridge, FM 90.9. Guiter lived in Austin and worked at KLRU, the station that produces the “Austin City Limits” music show on public television.
In Austin, “the population has doubled every 20 years for 120 years,” Guiter said, and Austin hasn’t dealt well with the resulting gridlock. It was eye-opening to come to Kansas City, he said, “which is just the opposite — no traffic and all parking.”
“Austin should’ve been in the forefront” of developing mass transit and managing its growth.
Instead, Meyers said, houses on the east side of Austin that once sold for $5,000 now go for a quarter of a million dollars. Those sorts of prices have driven musicians and other artists out, he said, to places like Kansas City, Memphis and New Orleans.
Such changes have “stripped the culture” out of Austin, Meyers said. “It’s hard to watch what’s happened.”
Guiter added that in addition to affordability, Kansas City should take care to hold onto its good neighborhoods and their small-town feeling. The West Side, for example, “is Austin-like but without the three-hour waits in line” for some barbecue or other local fare.
“The lesson is to think through, taking growth into account, the way we want the city to be,” Guiter said.
The panel was moderated by Mike Lundgren, director of innovation strategy at VML. He noted that the panelists agreed: “We don’t want to be Austin. We want to be a version of Kansas City that other cities have panels about, discussing why they should copy Kansas City.”