KC Council approves a pilot TIF plan to benefit East Side

The Kansas City school district’s move to a new headquarters will create $500,000 annually for Troost Avenue neighborhood improvements, under an innovative tax increment financing measure the City Council approved Thursday.

“It’s a unique opportunity,” City Manager Troy Schulte told the council, which voted 11-2 in favor of a pilot Troost area TIF plan from 27th to 47th streets and from Harrison Street to Bruce R. Watkins Drive. That area will be eligible for a half-million dollars per year for minor home repairs and other housing and facade upgrades, along with sidewalk, storm drain, streetscape and other infrastructure improvements.

The investment is possible because the Kansas City Public Schools moved its downtown headquarters earlier this year to 2901 Troost Ave. Schulte said the school district, with a payroll of about $100 million, generates about $1 million in 1 percent annual earnings tax payments to the city. The TIF plan allows the city to redirect half that earnings tax money to the Troost TIF district. City staff and economic development officials see that as a way to spark additional commercial development to a long-neglected area.

This East Side TIF counters a frequent criticism of Kansas City’s tax increment financing program — that too many of Kansas City’s tax redirections go to affluent areas rather than to the neediest parts of town. Schulte said the challenge has been finding businesses that could provide a tax redirection to East Side neighborhoods.

“We have struggled for years to find significant East Side revenue generators,” Schulte said, explaining that the school district move provided that type of revenue for an area that previously generated only $25,000 in economic activity taxes.

Council members Scott Wagner and Dan Fowler were the lone dissenters. Wagner, chairman of the council’s finance committee, applauded the plan’s motivation. But he cautioned that this $500,000 would otherwise go to the city’s General Fund, which already faces a $6 million deficit this year. He worried that targeting the money for the Troost neighborhood would just take it away from police, fire, codes officers and other basic services that Troost also needs.

Mayor Sly James acknowledged the budget woes but said the East Side deserves this extra help.

“We have got to recognize that there are some things that we simply have to address,” James said.

While the council approved the TIF, it postponed a decision on a separate citizens petition initiative that wants to raise even more money for the East Side. A group of activists gathered sufficient petition signatures to seek a vote next April on a one-eighth-cent citywide sales tax increase targeted for East Side economic development. The council must decide by Jan. 19 how to deal with that ballot proposal.

This story was originally published December 22, 2016 at 6:15 PM with the headline "KC Council approves a pilot TIF plan to benefit East Side."