InterContinental tax approved after hotel agrees to help fix up blighted homes

When Kansas City’s luxury InterContinental Hotel sought a “blight” designation needed to support a new sales tax for hotel renovations, critics howled at the idea of blight on the Country Club Plaza.

But after weeks of controversy, the hotel has agreed to provide $250,000 over the next seven years to help fix up truly blighted homes, and to provide jobs specifically for Kansas City residents.

That agreement, altering a debate over “legal blight” to a discussion about public remediation of “real blight,” changed what had appeared to be a doomed request to the City Council. Instead, the council voted 11-2 on Thursday in favor of the InterContinental Hotel’s 1-cent sales tax request.

“It’s very creative,” said attorney David Fenley, representing the InterContinental. Fenley commended council members Lee Barnes and Alissia Canady for coming up with a public benefit in conjunction with the hotel’s own renovation plans.

Fenley said the hotel will provide $100,000 in the first year and $25,000 each year for six years into a fund helping needy senior citizens with home repairs. It’s expected to be enough money to address about 40 properties.

“This is an innovative way to approach this,” Canady told her colleagues, adding that the money will primarily be directed at fixing up dilapidated properties in the urban core.

Fenley said the hotel had also committed to filling 40 percent of its job openings with residents who live within Kansas City, Mo., limits.

Council members Heather Hall and Dan Fowler were the lone dissenters, and Fowler said he just couldn’t get his arms around a vote that says the Plaza has blight. But other council members said the InterContinental’s willingness to contribute to the public benefit alleviated their concerns.

Councilwoman Katheryn Shields said the hotel’s owners plan to spend about $16 million renovating the InterContinental. The new 1-cent community improvement district sales tax, imposed just within the hotel property, should generate about $5 million of that money, and Shields said it will help the hotel do a more extensive renovation. She pointed out the hotel is the venue where most out-of-town professional sports teams and other top athletes stay when they come to Kansas City.

“I think this is a good use of our tax dollars,” she said.

In other action Thursday, the City Council unanimously approved a deal to provide about half the funds for a $33 million renovation of all 980 guest rooms at the downtown Marriott and Muehlebach hotel property.

The city will provide about $16.5 million over the next 30 years, through a 1-cent community improvement district tax and redirected convention and tourism taxes. Supporters said this will ensure Kansas City has thoroughly modern, updated and first-class hotel rooms for large conventions that come downtown.

This story was originally published October 6, 2016 at 6:04 PM with the headline "InterContinental tax approved after hotel agrees to help fix up blighted homes."