Village West is paid off. So where will Wyandotte spend windfall?

The revenue bonds that helped finance Village West have been paid off, meaning modest relief for those paying property taxes in Wyandotte County.
The revenue bonds that helped finance Village West have been paid off, meaning modest relief for those paying property taxes in Wyandotte County. The Star

Village West started as a speculative real estate bet, a risk taken by its private developer and City Hall in Kansas City, Kan., to build a shopping center so the Kansas Speedway wouldn’t look so lonely.

Kansas and the Unified Government of Wyandotte County/Kansas City, Kan., agreed in the 2000s to issue some $450 million in sales tax revenue (STAR) bonds to jumpstart Village West, which political leaders thought would give people another reason to go to the western edge of Wyandotte County aside from the occasional NASCAR race.

On Dec. 1, the last payment was made to investors who bought the bonds that supplied upfront cash to build Village West. Those bonds, with interest, were repaid by local and state sales taxes.

The Village West bonds were paid off five years ahead of time, a sign that the shopping district was more successful than anyone had anticipated when the bonds were sold.

Now that sales taxes from store purchases at Village West no longer go to bondholders, the UG anticipates an added $12 million in its budget to spend. That figure represents the portion of local sales taxes that Village West generates that now flow to the UG’s coffers (Kansas will get $42 million).

UG Mayor Mark Holland held a “listening tour” last year to gather ideas of how residents thought this new $12 million should be spent. Holland said he heard pleas for help on property tax bills.

Complaints about Kansas City, Kan., property tax rates go back decades as the city had to keep raising the rates to cope with crashing property values. A net exodus of residents starting around 1980 left the city with either abandoned properties or houses that sold for relatively little value, both which contributed to a decline in the taxable value of property.

By 1997, the city’s property tax rate hit its peak of 97 mills (a mill levy is the rate by which property taxes are calculated).

Of the $12 million in Village West sales tax revenues, the UG budgeted to apply the largest portion, $2.1 million, to property tax relief. That lets the citydrop its mill levy from 82.6 in the current budget to 80.6 in 2017.Overland Park’s mill levy rate of 13.8, by comparison, is the lowest in Johnson County. Roeland Park’s rate of 45.2, is the highest that county.

Kansas City, Kan., residents, will save an average $20 a year on property taxes. Holland acknowledges that it’s not much at first blush, but part of a long-term effort to pare down that property tax rate.

“The issue for us is not the immediate impact, the issue is the improvement over time,” Holland said. “What we didn’t want to do is some irresponsible tax cut like you saw on the state level. We wanted a responsible, gradual reduction of our mill levy over time that gives our citizens and businesses the relief they need.”

The next largest portion of the Village West revenues, $1.9 million, goes the Kansas City, Kan., Police Department and Wyandotte County Sheriff’s Office. After that, $1.75 million will be spent on blight reduction, another persistent problem in the city.

STAR bonds, which have been an often-used tool in western Wyandotte County to fuel the development of the various attractions there, have become a political football in Topeka. Lawmakers for years have toyed with the idea of changing the STAR bond laws or getting rid of them altogether for various reasons, including concerns that there’s not enough oversight. The law that authorizes STAR bonds is set to expire in 2017, meaning the tool goes away unless lawmakers renew it.

Holland said STAR bonds should be able to continue. He pointed to the $200,000 in property taxes that the Village West area generated before it became a shopping center and the $22 million it generates now.

“If I’m the state, I do that deal every day,” Holland said.

Steve Vockrodt: 816-234-4277, @st_vockrodt

UG’s uses of the $12 million in Village West revenue

$2,124,000 - property tax relief

$1,948,000 - police/sheriff

$1,751,000 - blight reduction

$1,697,000 - fire and emergency medical services

$1,575,000 - street repair, curbs, sidewalks

$1,315,000 - parks and recreation

$510,000 - facilities reinvestment

$450,000 - communications

$300,000 - public transportation

$250,000 - economic development and small business

$80,000 - aging