River Market apartment expansion gets held up by development authority

Developers already underway with construction on a $24.3 million, 140-unit apartment project in the River Market wanted the blessing on Thursday from a development agency to expand their project by another 45 units.

The request by Cornerstone Associates LLC from Omaha, Neb., is the type typically approved by the Planned Industrial Expansion Authority, particularly because the company asked for a tax abatement at a level for less than it could request.

But the PIEA put off the request for at least a week.

The snag? No one shared the information about their expansion plans at Fifth and Grand with taxing jurisdictions like Kansas City Public Schools and Jackson County.

Representatives from both those taxing jurisdictions protested the developer’s request on Wednesday because they had been unable to confirm how the latest tax abatement request from Cornerstone Associates would impact their bottom lines. School districts and counties in Missouri receive most of their funding from property taxes.

“We have grave concerns about this process,” said Kevin Masters, a representative from Kansas City Public Schools . “Zero transparency.”

Masters’ concerns mark another project coming under scrutiny from taxing jurisdictions. Taxing jurisdictions like Kansas City Public Schools and the Kansas City Public Library for years have expressed concerns about how public incentive programs lack transparency and have an impact on their own budgets. That ongoing debate is part of why the Kansas City Council continues to consider reforming those programs.

The PIEA in 2014 already granted a tax abatement for the project in 2014 — 100 percent for 10 years and 50 percent for the next five years. Standard PIEA inducements allow up to 100 percent tax abatement for 10 years and 50 percent the the following 15 years.

Cornerstone Associates saw an opportunity to replace a vacant building on the same block with more apartments. They wanted an abatement for the expanded portion on Thursday, adding that the project would provide a lower rate of return with the additions to the project.

PIEA commissioners agreed to wait a week before taking action on the project so that taxing jurisdictions could evaluate the request.

Greg Flisram, senior vice president for the Economic Development Corporation of Kansas City, said his agency didn’t want to slow the project down and that the request “passed our sniff test.”

“We just want to see the numbers,” Masters said. “We’re not trying to stop the project.”

The PIEA is expected to take a vote next week.

This story was originally published September 15, 2016 at 7:14 PM with the headline "River Market apartment expansion gets held up by development authority."