Country Club Plaza residents at the Kirkwood and Sulgrave Regency face a hefty property tax for a Midtown streetcar system. But residents at the nearby Walnuts likely wouldn’t.
Normally tax-exempt churches also could be hit for thousands of dollars a year.
Is the tax boundary for Kansas City’s proposed expanded streetcar zone fair?
A mail-in election is underway right now to determine whether the downtown streetcar system expands or stalls. But in Kansas City’s great streetcar debate this summer, questions are swirling about how the taxing district boundaries were drawn.
Proponents say an expanded taxing district along the Main Street corridor is the best shot at extending downtown’s wildly popular streetcar system to the University of Missouri-Kansas City. Critics counter that the proposed boundaries, involving both sales and property tax increases, impose an unjust lug on a small segment of Kansas City taxpayers.
“The whole thing has been gerrymandered,” says Greg Allen, whose financial business on Linwood Boulevard is in the proposed tax zone. “There is a huge problem of unfairness here. This is being levied on the backs of a relatively narrow property tax base.”
Some streetcar supporters who themselves would pay the higher assessment respond it’s well worth it.
“I think the first phase of the streetcar has been very successful,” said City Councilwoman Katheryn Shields, who lives just east of the Plaza and would pay the higher tax on her condo unit. “I feel very strongly it will be very helpful. I’m willing to pay.”
Streetcar advocates point out the tax approach was approved by the Jackson County Circuit Court. They are pushing hard for support in the mail-in election, with ballots due Aug. 1. Qualified voters will decide whether to create a special transportation development district (TDD), which could eventually extend the streetcar track 3.75 miles from Union Station to UMKC.
More elections would be required to actually impose any taxes. But an expanded streetcar district sets the stage.
It would actually have two different tax districts.
The entire area, from the Missouri River to 53rd Street and from State Line Road to Campbell Street, would have a 1-cent sales tax increase for 30 years.
A smaller boundary, generally one-third mile from Main Street but bigger in some places, would also face a 25-year property assessment for residential, commercial and even tax-exempt properties like churches. The local money would raise half the estimated $227 million project cost, with hopes of the rest from the federal government.
A draft special assessment map is available from the 16th circuit court. The final assessment zone would be determined later by an elected board.
But the “model” assessment boundary curves and bumps out in certain areas. Some have even suggested that the Walnuts complex was left out of the assessment zone because influential people such as former mayor Kay Barnes live there.
Those involved in drawing the lines vehemently deny that.
“It has absolutely nothing to do with where Kay Barnes lives,” said leading streetcar advocate David Johnson. “I didn’t even know where she lived. I thought she still lived in Briarcliff.”
They maintain the assessment zone is drawn to incorporate the parts of town that would benefit most from streetcar expansion in the Main Street corridor, plus Westport and the Plaza.
Opponents say the tax burden isn’t equitably distributed and wonder why the entire city isn’t being asked to contribute to such a hugely expensive project.
Plaza area condos
If new streetcar boundaries are approved, two subsequent elections could lead to the sales and property tax increases. That has prompted considerable scrutiny of which properties would be subject to the property tax.
The special assessment would run about $266 annually on a $200,000 residential unit or home, and higher for more expensive units.
A few Plaza area residents have complained privately to The Star that the Sulgrave Regency, 121 W. 48th St., is within the model assessment zone, while the Walnuts, 5049 Wornall Road, is not.
One person who asked not to be named wrote, “The discussion buzzing in our building is The Walnuts have some power brokers who pulled some strings...leaving out The Walnuts raises another question about a fair process.”
Johnson and attorney Doug Stone, who created the model assessment zone map, explained that the model assessment zone includes properties within walking distance of the streetcar line. The boundary bumps out more than one-third mile at the Plaza and Westport because those are contiguous walkable districts.
“Special assessments are imposed on property that benefits from a specific improvement,” Stone said, adding that the natural walking distance in the Plaza and Westport is greater due to their pedestrian nature.
Stone said the Walnuts is farther west from Main Street than other Plaza buildings. Likewise, the Polsinelli law firm office on the west side of Roanoke Parkway/Madison Avenue, is not in the assessment zone, while commercial properties just east of Madison are.
Stone acknowledged it’s a subjective judgment, but the Jackson County Circuit Court deemed the streetcar proposal legal.
Allen says the setup is ludicrous.
“What is walkable about including all the commercial property in Westport and the Plaza? That has to do with grabbing the tax base,” he argued.
Lee Derrough agrees. He lives in a Kirkwood townhome on 50th Street, right on the boundary, and says he and many neighbors are upset about how the boundaries were drawn to include their buildings.
“It’s a pretty big chunk of change, and it goes for 25 years,” he said. “People that aren’t excited are the ones who will have to pay for it and never use it.”
Derrough thinks the cumbersome mail-in election and tax approach is a perversion of Missouri’s transportation development district law, which is normally used for a few properties and smaller projects.
“This is bad public policy, some of the worst I’ve ever witnessed,” he said. “To me, it’s immoral.”
Some residents who would pay the assessment say they are fine with it.
Betsy Paul, who lives at the Sophian Plaza at 46th and Warwick, said she believes the benefits are worth the extra cost on her condo.
“I would ride it from here downtown,” she said. “It would be fabulous because it would open a lot of options where I wouldn’t have to drive my car. I could go downtown to the farmer’s market, pick up some stuff and not have to worry about parking.”
Still, Paul said, many of her neighbors oppose this type of taxation.
Churches and nonprofits
Another bone of contention is that the special assessment would hit churches and other Midtown nonprofits. The district would exempt the first $300,000 of property value for nonprofits, but the special assessment would apply after that. That’s how the transportation district law works.
St. Paul’s Episcopal Church and School would pay an estimated $10,000 a year, which could diminish funds available for its food pantry and other ministries, said Rector Stan Runnels. “Most of my parishioners are in favor of the streetcar, but we’re all wondering how are we going to manage this, how [to] afford it?”
Father Gary Ziuraitis of Our Lady of Perpetual Help Redemptorist Church, 3333 Broadway, estimates the church property, which includes Cristo Rey High School, would pay about $4,000 a year for 25 years.
Church donors want their money to help people, not pay a tax bill. “They want that to go to the work of God,” Ziuraitis said.
Vern Barnet, a longtime Kansas City interfaith leader, says he is a big user and proponent of the bus system. But he believes the proposed taxes are regressive.
“Let those who will benefit, primarily the developers, pay for the project instead of low-income homeowners and nonprofits, including churches,” he wrote in a widely distributed letter.
Stone responded that special assessments, unlike regular property taxes, apply to tax-exempt properties that also derive a benefit from an improvement.
Johnson pointed out that nonprofits already pay the downtown streetcar assessment, and it’s not stopping the Church of the Resurrection from expanding in downtown.
Meanwhile, Community Christian Church, 4601 Main St., supports the project.
Associate Pastor Ryan Motter estimated the church would pay about $1,700 a year. But he said the church already gives out about $500 worth of bus passes to the homeless each year, so it would probably save that amount once the free streetcar rolls by.
He said a majority of the congregation believes the streetcar is a big benefit.
“It fits in line with our values of caring for God’s creation,” he said. “The accessibility of reliable transportation, especially for those who are poor. It’s also encouraging and building community.”