Group drops call for public vote on $80 million project south of Crown Center

A group of petitioners and the development team working on a 400-unit residential project just south of Crown Center have reached an agreement on a request for property tax abatement.

The Coalition for KC Economic Development Reform notified the Kansas City clerk’s office Friday that it won’t pursue a public referendum on the proposed Gallery Green project. The $80 million plan calls for housing and some commercial space on what now is mostly vacant land.

“The petition committee wishes to commend the developers and their attorney involved in the Gallery Green project for proactively working with various stakeholders in reaching a mutually satisfactory agreement,” said the letter signed by Kansas City residents Andrea Flinders, Gayle Hill, Rosa James, Miriam King and Jan Parks.

Developers still need to go through a rezoning process but, as of now, expect to break ground by the end of the year.

The City Council had designated 18.4 acres, generally between 27th and 30th streets and between Gillham Road and McGee Trafficway, as blighted and in need of redevelopment. The development team of Milhaus and UC-B Properties bought the property from Hallmark Cards.

Charles Renner, an attorney representing the developers, said agreement was reached about the Gallery Green abatement request thanks to significant discussions with the taxing jurisdictions, such as the public school and library districts, to learn about and agree on details that were important to them.

“This agreement allows us to go to the Planned Industrial Expansion Authority next week with a final request regarding incentives,” Renner said, noting that no opposition is expected.

Renner said four priorities were important for the petitioners and the developers:

▪ Generate as much tax revenue as possible from day one.

▪ Have a high level of engagement with the taxing jurisdictions.

▪ Structure an incentive plan with direct benefit to the city at large, including a commitment to participate in the Shared Success Fund, a proposal to channel about $1 million in the developers’ payments in lieu of taxes to a city fund to assist East Side development.

▪ Exclude incentives connected to the part of the project designed to include for-sale housing, which will pay full property taxes from the outset.

The petitioners group noted that an analysis showed a need for the project to get 100 percent tax abatement for 25 years to be financially feasible for the developers.

But the end agreement resulted in the developers reducing the total number of tax abatement years down to 18 years and accepting a tax abatement that equates to just under 50 percent.

“Interestingly, the but-for analysis showed the need for this project to receive 100 percent tax abatement for 25 years for both the rental and for-sale units,” the petitioners’ letter stated. “Yet the project now serves to demonstrate it is possible to arrive at an agreement that simultaneously addresses stakeholder needs and concerns while continuing to foster responsible development.”

A similar citizens’ effort had unsuccessfully fought the City Council’s quick action Thursday to push through tax abatement plans for two hotel projects — conversion of the former Federal Reserve tower at Ninth and Grand and conversion of the former Pendergast and Pabst buildings in the Crossroads.

Referencing that in the letter, the petitioners said, “It should not go without mentioning this is in direct contrast to projects such as the Aparium and Grand Reserve hotels, which the City Council approved yesterday with accelerated effective date clauses in a blatant attempt to circumvent the referendum petition process. We applaud the Gallery Green team for working diligently to show the economic development process can and should be one that is a win-win, not a win-lose.”

This story was originally published May 13, 2016 at 4:54 PM with the headline "Group drops call for public vote on $80 million project south of Crown Center."