Government & Politics

Kansas Citians could decide whether tax incentives for development have gone too far

The Kansas City Council could soon vote to put on the ballot a measure to cap incentives for developers.
The Kansas City Council could soon vote to put on the ballot a measure to cap incentives for developers. File photo

Kansas City voters could weigh in this summer on the city’s often-criticized economic development incentives.

A coalition of groups, called the Coalition for Kansas City Economic Development Reform, collected more than 2,300 signatures to put a proposition on the ballot that would cap incentives for developers. The city clerk certified the signatures earlier this month and the City Council could soon vote to put the measure on the ballot.

Most cities offer property tax breaks and other incentives to encourage development, but critics often argue the incentives are too big and take away funds that should go to city services and taxing jurisdictions. In Kansas City, that includes public schools, the library system and mental health services.

The coalition’s spokeswoman, Jan Parks, said large property tax abatements take away significantly from those taxing jurisdictions to help fund luxury apartments.

“It’s not that we’re not for development,” Parks said.

But she said when she listens to development proposals that include swimming pools, basketball courts, rooftop terraces and ballrooms, she thinks, “ ‘You know we have school buildings that need basic bathroom upgrades, not fancy fixtures.’ ”

She called it “disheartening” those groups don’t get the funds.

Under the coalition’s proposal, developers could get up to 50 percent of their property taxes abated. In the city’s “continuously blighted areas,” developers would still be able to apply for incentives up to 100 percent.

Kansas City adopted an ordinance in 2016, sponsored by 3rd District at-large Councilman Quinton Lucas, who is running for mayor, that caps property tax breaks at 75 percent for 10 years and 37.5 percent for 15 years after that.

But Parks pointed to projects that have been been granted larger incentives even after the ordinance took effect to say it wasn’t a complete solution.

“We feel like we’ve given it a pretty good chance. I think for the first year plus there was a lot of projects that were grandfathered in and so you know we kept being told well let’s see when all these grandfathered-in projects are done,” Parks said.

She noted some projects since then have followed the ordinance. But earlier this week, the Land Clearance for Redevelopment Authority — a group that reviews and votes on incentives before they reach the City Council — approved a 10-year 90 percent abatement for a redevelopment of downtown’s Mark Twain Tower. The board also endorsed a 10-year 100 percent abatement and five-year 37.5 percent abatement for a new Hyatt House extended-stay hotel.

LCRA board Chair Steven Hamilton said the Mark Twain project did not have to follow the 75 percent cap ordinance because it was already in an urban renewal area and did not need City Council approval.

Lucas took issue with that and argued the clear intent of the ordinance was to cap any incentives in non-distressed parts of the city.

Lucas said he agrees that the city’s economic development system needs more work and that incentives need to not only be granted to projects with great need “but also the areas with the greatest need.”

But he said he wasn’t sure the petition was a perfect solution.

“I think to the extent that the petitioner group thinks this will be a panacea, I think they might be mistaken,” Lucas said.

Lucas said he found out about the petition because he ran into the group at City Hall when they filed their signatures, and he didn’t think it was “a good idea to not actually collaborate and talk to anybody.”

When he was pursuing his ordinance in 2016, he said he and various parties “worked like hell” to find a compromise.

The discussion comes as the Kansas City Council moves toward approving a housing plan to address the city’s need for affordable housing.