Entertainment Districts, as they are referred to as, are easy to spot.

These places usually have a well-marketed name followed by the words: eat, drink, relax, dine, play or some similar variation. A hotel is often used as an anchor, a movie theater is thrown into the mix along with some higher-end chain restaurants while the area’s light posts are covered in well-designed banners.

Another easy way to identify an entertainment district is by government subsidy. These projects usually have some form of subsidy attached, whether that is through direct spending on infrastructure improvements, local government bonding or tax increment financing. They also supposedly support the creation of jobs, economic growth, promote adjacent urban development and feed off a new, existing or proposed sporting arena.

Downtowns are, and are, not Entertainment Districts. It depends, as certain policies can give them similar qualities. That being said, giving further caveats to these differences is necessary. It is best to breakdown Entertainment Districts into two categories: overnight vs. naturally-occurring.

The Overnight: The Power & Light District in Kansas City

The Kansas City Power & Light District … is a shopping and entertainment district in Downtown Kansas City, Missouri … The district comprises nine blocks on the south side of the downtown loop. … The $850 million “mixed-use” district is one of the largest development projects in the Midwestern United States. The Power & Light District is one of only a few places in the United States where possession and consumption of open containers of alcoholic beverages are allowed on the street, although they remain prohibited on the street throughout the rest of Kansas City. [Wikipedia]

The Power & Light District is an infill project in an urban area that connects with the original street grid, is walkable and the urban design is scaled appropriately. One would think this would be a success story. The reality is, it’s a financial drain. The Wall Street Journal reported:

The tab is mounting for this Midwestern city on a bet it made during the real-estate boom on an $850 million entertainment district meant to breathe new life into its struggling downtown. While the eight-block restaurant, nightclub and retail complex named the Power & Light District is mostly complete, traffic and sales are well below initial projections when construction started in 2006. Today, the project … generates less than one-third of what is needed to cover the debt service on the bonds. The city is setting aside $12.8 million in its budget for the fiscal year that starts next month to cover the gap, a notable hole in a $1.3 billion budget that calls for $7.6 million in cuts to the fire department. [...] property-tax collections have been lower than expected, given lower rents and real estate values. Sales-tax revenue is also off. [The Developer] has blamed this partly on the lack of a professional sports team at the [nearby] arena.

Kansas City gambled on a 9 block entertainment district and a new sporting and music arena – and now it’s draining city resources (similar to what is going on in Cincinnati and the situation in Phoenix). The question should be asked: Why did it fail? First of all, projections were too optimistic, and it was admittedly bad timing, as it finished at the genesis of a recession. These are the two often cited reasons for why these developments fail – and they certainly play a role, but they don’t tell the whole story. The real problems are less obvious.