Proposed AdvanceKC incentive policy looks familiar

01/13/2014 3:49 PM

01/14/2014 5:38 PM

The second half of the new AdvanceKC economic development overhaul package is on the agenda this week at City Hall, and its goals include another stab at reversing more than a half-century of disinvestment in the inner city.

In mid-December the Kansas City Council approved sweeping changes in the Economic Development Corp. with the intention of making the agency more accountable to City Hall, and its operation more streamlined and predictable for developers.

The next step, scheduled to be introduced Wednesday to the council’s Planning, Zoning and Economic Development Committee, is identifying and implementing the city’s priorities for how it wants to use its incentives, primarily tax-increment financing and property tax abatement.

What stands out in the draft criteria is a renewed effort to stimulate development in what’s called “areas of historic underinvestment.” That includes parts of Kansas City suffering from what it calls long-term declining property values and encouraging “geographic equity” of development patterns.

When it comes to jobs, the draft proposal calls for providing opportunities for increased income for residents, “especially in areas of high unemployment and underemployment.”

Important goals indeed, but will the proposal actually make a difference?

The Economic Development & Incentive Policy championed by former Mayor Mark Funkhouser and adopted by the council in 2007 had similar noble social policy goals but proved unworkable and was ultimately scrapped.

Incentives, used properly, can make the difference in whether a comparatively risky venture works financially. But history shows incentives cannot force private investment where it doesn’t want to go or create a market from scratch.

Earlier in the AdvanceKC process, a strategic plan was proposed that included improving public safety in Kansas City and its school district. To many people, those are the substantial steps needed to encourage development in areas of historic underinvestment, rather than the frosting of incentives.

The draft incentive criteria also signal what kinds of investment the city is not interested in helping, sometimes in blunt terms.

For example, it recommends no property tax abatement for residential condominium projects, another blow to that struggling industry. It also discourages backing TIF debt with the city’s credit, another lesson learned from the financially underperforming Power & Light District.

It seeks to encourage only retail projects that attract new spending as opposed to shifting shopping dollars from one part of the city to another. That could be a tough call. Would a plan to redevelop Metro North Shopping Center qualify for incentives if Zona Rosa showed it would lose business?

And once the new incentive criteria are adopted, the city manager is being asked to develop a scoring system to review proposals. A similar point system was included in the Funkhouser policy and was criticized for being a mindless checklist.

The proposal does support incentives that would increase density in the city with an emphasis on the new streetcar development district, a territory that covers most of greater downtown.

And in the end, the best-laid criteria can always be trumped by politics.

The draft proposal allows for “exceptional projects” that don’t meet the eligibility criteria to be approved by a committee comprising the new EDC board dominated by the mayor, as well as the heads of the development agencies.

On another topic, the Downtown Council held its annual luncheon last week. The theme this year was to call attention to what it called the concentration of 400 “brain-powered” businesses in what it described as a burgeoning innovation district.

Michael R. Haverty, chairman of Kansas City Southern, was given the J. Philip Kirk Jr. Award in honor of his contributions to downtown. During his tenure as chairman of the Union Station board, Haverty was credited with stabilizing the financial future of the historic landmark.

Urban Hero Awards were given to Vladimir Krstic of the Kansas City Design Center; the 20th Street infrastructure team, Dan Clothier, Jim Miller, Tom Nelson and Charlie Barnard; Alex and Courtney Perry of The Arts Asylum; and Luke Wade, a recreational advocate.

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