KC Council to consider a $350,000 contract to study development incentives’ impact

Kansas City Mayor Sly James says the city needs to do a better job promoting how economic development benefits the city.
Kansas City Mayor Sly James says the city needs to do a better job promoting how economic development benefits the city.

Kansas City officials want an answer to a persistent question: What’s the city’s bang for the buck for all the development incentives it uses?

That answer has been elusive in the debate over Kansas City’s use of tax breaks and abatements in a metropolitan area where competition for economic development across city and state lines remains white hot.

While taxing jurisdictions like school districts and library districts have pointed to various figures for how their budgets have been affected by development incentives, city leaders have been hamstrung in responding about how the incentives benefit the city and its taxpayers.

Mayor Sly James said at a recent meeting of KCStat — a data-crunching initiative of the city’s meant to improve its effectiveness — that City Hall doesn’t do a good enough job of promoting how economic development benefits the city.

On Tuesday, James and six Kansas City Council members visited with a team of consultants led by the Council of Development Finance Agencies, based in Columbus, Ohio, to discuss how to evaluate the impact of the city’s use of development incentives.

The Kansas City Council is expected to vote this week on a contract worth up to $350,000 for CDFA and other consultants to review historic data about the city’s use of incentives and evaluate what the city gets in return. The city estimates that the project could use up to 1,900 hours of time, working out to $184 an hour if the full $350,000 from the contract is tapped.

“This is designed to be a data-driven, impartial study,” said Mark Barbash, a senior strategic adviser for the CDFA.

CDFA expects to issue a report by May. That report would tally direct results from incentives, such as jobs and changes in assessed property valuation, to indirect results, such as economic impacts.

Heather Hall, a councilwoman from the Northland, asked how taxing jurisdictions will be involved in the study. Taxing jurisdictions are often vocal critics of incentive programs, particularly property tax abatements, because they say it affects their budgets.

Kerrie Tyndall, director of economic development for Kansas City, said the study will include a community outreach component that could involve experts like taxing jurisdiction representatives.

The contract will first go before the city’s Planning, Zoning and Economic Development Committee on Wednesday. If that committee approves of the contract, it’s expected to be fast-tracked to the full Kansas City Council on Thursday.

Steve Vockrodt: 816-234-4277, @st_vockrodt