After a volley of deal-making and compromises, the Katz Drugstore project passes
After weeks of debate, the Kansas City Council awarded tax breaks for a development project at a key intersection in Westport, paving the way for the refurbishment of the Katz Drugstore Building and new apartments to go with it.
After a series of compromises, developer Lux Living will get a property tax abatement for 10 years, fewer than the 25 years originally sought to build new apartments at Main Street and Westport Road.
But in Kansas City, where the development of affordable housing remains a struggle, a council majority chose not to require Lux Living to provide any affordable apartments in the 192 units it plans to build.
Lux Living will also receive a $600,000 cash subsidy from City Hall. The $600,000 will initially come from 4th Council District Public Improvement Advisory Committee (PIAC) funds. PIAC is a program that earmarks taxpayer dollars for infrastructure projects in each city council district.
The PIAC funds to the 4th District, which covers Midtown, downtown and parts of Briarcliff, will be refunded in next year’s city budget with funds coming from another development project that had received tax breaks.
The $600,000 represents the approximate value of five years of tax breaks that Lux Living agreed to give up from an earlier version of its tax break proposal.
An earlier compromise sought affordable units for the Katz project, but Lux Living said it could not carry on with the development if it had to provide affordable units and a lower tax break period than it originally wanted. That resulted in the entire city council voting the project down last month, but it was revived two weeks ago.
Katheryn Shields, a 4th District council member, championed Lux Living’s proposal for Katz. Shields generally supports historic preservation projects, and the Katz building’s distinctive architectural style and clock tower appealed to her and Historic KC.
But her 4th District colleague, council member Eric Bunch, thought the original tax break period of 25 years was too long. Lux Living originally wanted a 10-year tax abatement at 75% with the following 15 years at 37.5%.
Bunch’s view was supported by an independent analysis that concluded the project could work financially with a 10-year, 75% tax abatement. Bunch also wanted Lux Living to provide affordable housing units.
But after the project was voted down in June, Bunch and Shields made a compromise that was approved on Thursday.
“I appreciate Eric working with me on this,” Shields said. “He was very helpful.”
The Katz building currently pays no property taxes because it’s owned by Redeemer Fellowship Church; churches and nonprofits generally pay no taxes on property they own.
The tax break package passed by a 9-4 vote, with council members Kevin O’Neill, Ryana Parks-Shaw, Dan Fowler and Brandon Ellington voting against.
O’Neill questioned the need for tax breaks, given that the development is occurring on future streetcar extension, “which I think is its own incentive,” he said.
But his view didn’t carry the day, and work is expected to begin on the Katz project later this year.
Encouraging COVID vaccines
In other Kansas City Council news from Thursday’s meeting, Fowler introduced a resolution asking the city’s health department to come back in 14 days with recommendations on how to encourage more people to get COVID-19 vaccinations.
Missouri is grappling with another wave of coronavirus infections and vaccination rates across the state remain low.
Police department funding
Council member Teresa Loar introduced an ordinance from the floor that would appropriate $45.3 million that the city received from the federal American Rescue Plan to the Kansas City Police Department. Kansas City Mayor Quinton Lucas referred the matter to the city’s Committee for Legal Review, which meets infrequently.
If passed, the measure would effectively restore money that the Kansas City Council in May voted to move out of the KCPD budget into a separate fund that the Board of Kansas City Police Commissioners would have to negotiate with City Hall on how it would be spent.
Those ordinances in May were carried by Lucas, who was joined by eight other council members. They said the measure was meant to foster some accountability for how KCPD spends the $240 million it gets from City Hall
The four Northland council members, of which Loar is one, voted against the KCPD funding ordinances, which became the subject of a lawsuit that the Board of Kansas City Police Commissioners filed against City Council.
The police commission supervises KCPD and its members are appointed by the Missouri governor. City Hall appropriates money to KCPD, but largely has little say in how its spent.
Loar said President Joe Biden said on June 23 that American Rescue Plan (ARP) money, which went in part to cities in a bid to help them recover from the economic effects of the pandemic, could be spent to hire additional police officers.
Kansas City received $97.4 million from the ARP. Loar said putting money back to KCPD would help as the city’s high violent crime rate continues to persist.
“That’s not something we should tolerate,” Loar said.
She acknowledged it had a slim chance of passing.
Lucas agreed with that assessment, adding that Loar’s measure posed a conflict with positions taken by the BOPC in its lawsuit against the city.
“I do not think it has a chance for passage,” Lucas said.
This story was originally published July 15, 2021 at 4:41 PM.
