TIF plan for convention center hotel gets first-round approval

A proposal for a new 800-room Kansas City Convention Center hotel will move forward following a Tuesday vote by the Tax Increment Financing Commission.

Overriding dissent from two commissioners who represent the Kansas City Public Library and Kansas City Public Schools, eight commissioners approved sending the TIF plan to City Hall for further public consideration.

The TIF Commission had to find that the 2.75-acre block bounded by Truman Road, Baltimore Avenue, 16th Street and Wyandotte Street met the legal definition of blight in order to qualify for public TIF incentives.

The commission approved a standard 23-year TIF and a city Super TIF for seven years longer. Together, the incentives are expected to capture and direct about $139 million to pay for the $310.8 million project.

Commissioners Debbie Siragusa and Kevin Masters said they could not endorse the plan based on projections that the library system and school district might lose tax revenue.

The projection came in a cost-benefit analysis by Springsted, a consulting company hired by the Kansas City Economic Development Corp. and the TIF Commission to do a “but for” analysis, a determination that said the hotel project would not be economically feasible “but for” the use of public assistance.

Roxsen Koch, the attorney representing KC Hotel Developers LLC, the development team, said the jurisdictions opposed to the plan reacted to the most conservative revenue estimates based on project costs. Koch said the jurisdictions probably would gain instead of lose revenue once the completed project brought more tax revenue to the city through spending by conventions, visitors, residents and added payrolls.

Commissioners, on a 9-1 vote, with only Siragusa dissenting, also approved KC Hotel Developers as the developer of the hotel TIF plan. The development team is headed by Michael Burke and Timothy O’Byrne.

Siragusa said the library district couldn’t support the plan as of Tuesday, partly because of a lack of input with the development team before the TIF meeting. Co-developer Burke said more meetings will be held with the affected taxing jurisdictions.

The only public comment given at the TIF meeting was from Patrick Tuohey, who represents the Show-Me Institute in Kansas City. Tuohey urged the commissioners to avoid a fast-track approval, saying, “The costs are real. The benefits are intangible.”

He also expressed disappointment that the plan estimates a contribution toward the $310.8 million project of only $8.5 million from Hyatt, the proposed hotel operator.

The TIF Commission is expected to get the plan back again in August for further consideration.

More meetings also are planned to obtain additional public comment on the proposal.

On July 21, the City Plan Commission will consider the plan’s sale-leaseback arrangement that would give the site’s land ownership to the Land Clearance for Redevelopment Authority for the 30-year duration of the project.

Property currently is owned by the city, which owns a parking lot on Baltimore, and the American Hereford Association, which owns a building on the site that would have to be razed. Negotiations are under way with the association.

A public hearing is set for July 16 on the proposed Community Improvement District, which would create a special sales tax district to help pay project costs.

The City Council’s Planning, Zoning and Economic Development Committee is expected to consider an omnibus ordinance on July 22 that includes the TIF, Land Clearance for Redevelopment Authority and Community Improvement District issues, with the full council taking up the issue July 23.

This story was originally published June 30, 2015 at 2:05 PM with the headline "TIF plan for convention center hotel gets first-round approval."