Kansas City Council votes unanimously to trim developer tax incentives
Kansas City officials on Thursday cut by 10 years the generous, lengthy property tax abatements City Hall has granted developers.
The City Council voted unanimously in favor of legislation offered by Councilwomen Melissa Robinson and Ryana Parks-Shaw limiting property tax abatements, which are commonly offered to developers as incentives to build apartments, office buildings, hotels and more, often downtown.
For decades, developers could get full or partial property tax abatements for up to 25 years. Now, they’ll be limited to 15 in many cases. The City Council and boards and commissions appointed by the mayor approve those deals, but the city’s school districts, libraries, mental health providers and other taxing jurisdictions stand to lose the most.
The councilwomen introduced the legislation last summer in the wake of nationwide protests over racial injustice. Robinson said Thursday it was time the city reform incentives because they draw money from schools — particularly Kansas City Public Schools.
Robinson said the city has a “moral and ethical and legal responsibility” to ensure it passes policies that are fair to people of color. She said the city’s incentive policies “perpetuate systemic oppression” by taking resources disproportionately from inner-city schools.
“The city was prioritizing the needs of wealthy corporations over the needs of residents,” Robinson said.
But the reforms are a far more modest version of the legislation the councilwomen initially introduced.
Under the legislation, developers will be limited to 70% property tax abatements for 10 years, followed by a 30% abatement for five years. Now, City Hall can grant 75% abatements for the first 10 years and 37.5% for 15 years after that.
At one time, the councilwomen’s proposal would have cut those incentives to 50% for 10 years. Developers seeking longer, deeper incentives would need the approval of school districts. But that power transfer didn’t get traction among the City Council.
The cap doesn’t take effect for 120 days or until the city reforms its “Advance KC” scorecard, which it uses to determine whether projects are worthy of incentives. Robinson said it was important to create that window so the city has a deadline to get that work done. She didn’t want the process to drag out like the cap ordinance has.
But it allows developers to seek incentives before the change goes into effect and be grandfathered in.
KCPS Superintendent Mark Bedell was critical of that provision in a letter to the council earlier this week.
“As incentive reform flounders, how many more luxury buildings in affluent neighborhoods will generations of students be forced to subsidize?” KCPS Superintendent Mark Bedell wrote in a letter to the City Council on Monday that was obtained by The Star. “How many more parking garages will be built with public dollars?”
