KC Council rejects petitions, won’t put convention hotel to public vote

The Kansas City Council decided Thursday that citizen petitions seeking a public vote on the proposed convention hotel were illegal and should not go on an upcoming election ballot.

“What is being asked of us to do is not lawful,” Councilman Dan Fowler said before the council voted 12-1 against putting an initiative petition before city voters.

Councilwoman Heather Hall, from the 1st District north of the river, was the lone dissenter. She said she doesn’t believe numbers show convincingly that the proposed Hyatt hotel, slated to be built just east of the Bartle Hall ballroom, will be successful.

The council majority said they strongly support the right of citizens to petition their government but couldn’t approve this one because it undermined already signed, binding contracts with the hotel developers and has other legal flaws.

The petitioners may try to seek a court order to compel the council to put the hotel financing on an election ballot next year.

Dan Coffey, spokesman for Citizens for Responsible Government, which gathered more than 1,700 signatures to force a public vote on the downtown convention hotel, said Thursday his group will have to meet soon and discuss how to respond to the council’s decision.

Coffey said it was ludicrous to think the city can’t get out of the hotel contracts.

The developers have expressed fears that further delays from the petition initiative process could drive up the hotel’s cost and make it harder to get it built.

Mike Burke, an attorney for the development team, said Thursday that the council’s vote was encouraging, but that until the petition issue is put to rest, the project remains in some doubt.

This battle surfaced shortly after this 13-member council, with nine new members, took office Aug. 1. It occurred after the previous council unanimously approved financing for a planned 800-room, $311 million Hyatt hotel, with an opening slated for sometime in 2018.

Mayor Sly James and other project supporters have said repeatedly this is the best deal the city could get and that the hotel is urgently needed to keep Kansas City competitive for major conventions and other tourism business.

About $164 million of the money for the hotel would come from public funding sources, including cash, land and redirection of public taxes into the project. But it would not add to the city’s debt load, and the money is coming from tourism tax dollars, not the general fund.

The petitioners turned in their signatures in September, saying that with such a large public investment, the public should have a vote. Many new council members said they were very uncomfortable rejecting that grass-roots, citizen-led campaign.

But City Attorney Bill Geary said the petitions shouldn’t go on an election ballot because they would cause the city to be in breach of contracts already signed with the hotel developers.

Perhaps even more importantly, Geary said, the petitions would require an election for any hotel near the convention center that uses any form of tax-increment financing. He explained that the TIF statute does not limit who can get those types of tax incentives. The council gets its TIF powers from the state, and the voters can’t restrict that council power.

State law allows what the initiative petition attempts to prohibit, Geary said, so it is unconstitutional on its face and should not go on the ballot.

Some council members who were sympathetic to the petitioners said Thursday they were persuaded by Geary’s arguments. They also said they had worked to strengthen the deal between the city and the hotel development team, to safeguard taxpayer dollars and ensure jobs from the project go to Kansas City residents.

Councilwoman Katheryn Shields said she had received a commitment from the developers, which will be spelled out in writing, assuring that no general fund money goes for the project’s construction or operations.

In addition, Councilwoman Alissia Canady said she had gotten the developers to commit to providing at least 13 percent of the 1,300 construction jobs and 30 percent of the 300 to 400 hotel jobs to residents living in the city limits of Kansas City.

“That’s a great first step,” Canady said, to ensuring the project benefits not just visitors but also those who call Kansas City home.

This story was originally published November 12, 2015 at 5:20 PM with the headline "KC Council rejects petitions, won’t put convention hotel to public vote."