Philanthropist Shirley Helzberg’s Crossroads project, which has become a flashpoint for disagreement over development incentives, inched forward Tuesday with a sharply divided vote by Kansas City’s Tax Increment Financing Commission.
The commission voted 6-5 to rescind last month’s decision to delay the development agreement for 1640 Baltimore Ave., which Helzberg hopes to transform from a vacant warehouse into a new headquarters for BNIM architects.
Tuesday’s action means that if a referendum petition drive against the project falters, the development can move forward without waiting until another TIF Commission meeting in January.
The narrow vote to reverse the earlier delay came after Mayor Sly James altered the composition of the TIF Commission. He removed Phil Glynn, who had voted Nov. 10 with the five taxing jurisdiction representatives to delay the development agreement until January.
The mayor replaced Glynn with Jennifer Dameron, who sided with the five other mayoral appointees Tuesday to let the development agreement proceed.
That gave the city’s representatives their one-vote majority. It also left those on the losing side furious, arguing that the city’s whole incentive decision-making process is rigged.
“There seems to be a level of politics at play that is disheartening,” said TIF Commissioner Kevin Masters, representing the Kansas City public schools, which favored the delay to allow more time to review the agreement. “The tactics used is just appalling.”
The school district questions the Helzberg TIF, which calls for a $5.2 million subsidy on the $13 million project. Critics argue this redirects too much money to the developer and away from the schools, county government and other public services.
Debbie Siragusa, who represents the Kansas City public library system on the commission, also objected to what she saw as a blatant “power play.” She said it was wrong to move the development agreement forward until the city knows the outcome of the referendum drive opposing the TIF financing.
A grass-roots group is trying to gather 3,400 signatures by Dec. 8 to compel the City Council to repeal its Oct. 29 vote in favor of this project or to force a public election on the project.
Helzberg is one of Kansas City’s premier philanthropists, and no one quarrels with her proposal to redevelop a vacant and deteriorating building into a new, environmentally progressive headquarters for BNIM. The namesakes for the Kansas City firm are Bob Berkebile, Tom Nelson, David Immenschuh and Steve McDowell.
The fight is over the TIF financing. Supporters say the project is not financially feasible without the tax subsidies. Critics counter that the Crossroads is no longer blighted and projects there should stand on their own. This project has become a focal point for a much larger debate over the merits of using tax incentives downtown and west of Troost Avenue.
Tuesday’s vote does not mean the Helzberg project can automatically move forward, and commission chairwoman Cindy Circo insisted the development agreement protects the referendum petition. She said the agreement contains language clarifying that it doesn’t take effect until the referendum petition drive runs its course.
Circo said Tuesday’s vote was simply the TIF Commission exercising its proper administrative function after the City Council already set the policy by approving the TIF.
But there could be a new wrinkle in the whole referendum effort. Development attorney Jerry Riffel, representing Helzberg’s development company, argued Tuesday that the 1640 Baltimore TIF is part of a larger TIF district established in 2008.
Riffel told the commission that he doesn’t believe the 1640 Baltimore deal is legally subject to a referendum.
If the city attorney and City Council agree with Riffel’s interpretation, that could preface a court fight between the petitioners and the city over whether this referendum will ever go on an election ballot.
City Attorney Bill Geary said in an email Tuesday that the City Council’s ordinance authorizing the TIF financing is on hold while the petitioners attempt to reach the signature threshold.
Geary said he had not yet analyzed Riffel’s legal conclusion and couldn’t yet say whether it has merit.
Jennifer Wolfsie, a Kansas City public schools parent leader who is gathering petition signatures, said Tuesday that she had consulted with the city attorney’s office on the referendum petition language and had followed what she thought was the correct legal approach.
Some have suggested Mayor James could still help negotiate changes in the financing deal that would satisfy the petitioners and taxing jurisdictions, avoiding a divisive election and ensuring a very good Crossroads project.
James said Tuesday evening he is trying to do that and has talked with Riffel and the school district’s interim superintendent, although he doesn’t know if he’ll succeed in crafting something that everyone can support.