Port Authority votes on USDA incentives, but not happy with where all the money goes
A committee of the Port Authority of Kansas City grudgingly voted Monday to approve incentives meant to help federal agencies relocate to Kansas City, saying a special inducement that the agency can approve will ensure hundreds of jobs locally.
But top Port Authority staff and appointed commissioners expressed displeasure at an arrangement by the Kansas City Council that deeply cuts the portion of incentives coming back to the authority to fund its own infrastructure projects. They called the action an unwarranted use of state dollars for city purposes.
“I personally see this as a cash grab by the city to finance other city obligations,” said Kelley Martin, a Port Authority commissioner who serves on its development committee, which met on Monday.
The Port Authority is a government agency whose commissioners are appointed by the Kansas City mayor.
At issue is how to divvy up more than $27 million in Missouri withholding taxes from some 500 U.S. Department of Agriculture employees whose jobs have been relocated from Washington D.C. to Kansas City
The USDA announced earlier this year that Kansas City would be the new home of the Economic Research Service and the National Institute of Food and Agriculture. More than 130 cities pitched themselves as potential new homes for the Washington D.C.-based research agencies.
The city’s package included $27 million from a special inducement, available in Missouri to port authorities, called an Advanced Industrial Manufacturing Zone. The $27 million represents what more than 500 USDA employees making between $116,000 and $120,000 over 15 years would generate in withholding taxes that would otherwise go to Jefferson City for Missouri to pay its bills.
Under the original terms of the USDA incentives, about $20 million from the AIM Zone would go to the owner of the downtown office building at 805 Pennsylvania selected as the new home for ERS and NIFA. The money would lower the lease rate the federal government would pay.
About $6 million would go back to the Port Authority to pay for transportation projects under its control, such as a facility to manage barge traffic sailing down the Missouri River, one of the Port Authority’s responsibilities.
But last month the Kansas City Council passed an ordinance that reduced by about $4 million what the city would contribute to the USDA incentive package. In turn, the Port Authority felt compelled to cut the $6 million it had counted on from the AIM Zone by $4 million to make up the difference and keep the USDA interested in relocating to Kansas City.
In early November, Kansas City leaders cheered the new funding arrangement as a savings for local taxpayers.
“This change saved taxpayers $4.4 million that they simply shouldn’t be on the hook for,” said Kansas City Mayor Quinton Lucas in a statement at the time. “We’re also requiring the Port Authority to tell us exactly how they’re spending taxpayer funds, so the City may track every dollar spent.”
Left unsaid was Lucas’ desire to check the Port Authority’s involvement in granting incentives for jobs and development projects. Ordinarily, the agency acts as landlord for the Isle of Capri casino and otherwise manages land along the Missouri River as well as the former Richards-Gebaur Air Force Base.
The usually staid government agency has attracted new scrutiny because of its recent activity. The Port Authority has been increasingly active in supporting development projects in downtown Kansas City, the Country Club Plaza and the Northland.
Developers have appreciated the Port Authority’s involvement in granting tax breaks because it doesn’t have to meet certain standards required of other economic incentive agencies.
Port Authority President and CEO Jon Stephens said Missouri policymakers were not pleased by the Kansas City Council’s ordinance.
“This is anecdotal: The terms that have been said to me is this is a clear use of state dollars to fill city obligations, that is what was stated to me,” Stephens said. “State dollars to city obligations are never received well in state legislatures. I will leave it at that.”
Stephens declined after Monday’s meeting to specify who made the statement.
Stephens credited the AIM Zone incentive that gave Kansas City, Missouri, a shot at landing the USDA agencies and their well-paying jobs.
“Without this AIM Zone tool, there was zero chance it was coming to Kansas City, Missouri,” Stephens said.
In a statement, a USDA spokesperson said the agency picked Kansas City for a variety of reasons beyond incentives.
“Each of the finalists, including the Kansas City region, developed independent incentives proposals,” said a USDA spokesperson. “The Secretary evaluated numerous factors, as referenced in our Cost Benefit Analysis, of which these state and local incentive packages were only one contributing factor.”
In other Port Authority news on Monday, a proposal for a large, 630,000-square-foot industrial building was tabled after concerns were raised about the developer having not briefed city council members about the project beforehand.
VanTrust proposed the $35 million project at Northwest 112th Street and North Congress Avenue in Platte County. But Dan Fowler, a Port Authority Commissioner and Kansas City Councilman whose Northland district includes the VanTrust site, said the developers should have visited with him and fellow councilmember Teresa Loar, which they pledged to do.
Port Authority commissioners also learned that a proposed affordable housing project along the Berkley Riverfront did not receive an allocation of low-income housing tax credits from the Missouri Housing Development Corporation. The 70-unit apartment project proposed by Prairie Fire Development, Port Authority officials said, was not on a list of recommended projects from Quinton Lucas’ office.
Lucas on Monday also named appointments to several city boards and commissions that touch on economic development:
Port Authority
- Yolanda Cargile, superintendent of Hickman Mills School District
- Phil Glynn, president of Travois
- Matthew Oates, former Kansas City Public Schools board member and engineer with Burns & McDonnell
- Kevin O’Neill, Kansas City Council member
- Katheryn Shields, Kansas City Council member
- Henok Tekeste, owner of Blue Nile Contractors
- Claire Terrebonne, lawyer with Williams Dirks Dameron
18th & Vine Development Policy Committee
- Quinton Lucas, mayor
- Earnest Rouse, acting Kansas City manager
- Brandon Ellington, Kansas City Council member
- Melissa Robinson, Kansas City Council member
- Lauren Allen, lawyer with Lauren Allen LLC
- Kelsie Spottsville, board director of the Black Archives of Mid-America
- Joseph “Joey Cuts” Thomas, founder of The Know Joey Foundation
- Carmaletta Williams, director of the Black Archives of Mid-America
Economic Development Corp. of Kansas City
- Lee Barnes, Kansas City Council member
- Phil Glynn, president of Travois
- Makini King, director of University of Missouri-Kansas City Division of Diversity and Inclusion Initiatives
- Tammy Henderson, director of community affairs for North Kansas City School District
- Quinton Lucas, mayor
- Earnest Rouse, acting Kansas City manager
- Russell Shankland, partner at Shook Hardy & Bacon
- Bridgette Williams, director of Heavy Constructors Association
Enhanced Enterprise Zone Board
- Andrea Bough, Kansas City Council member
- Lynn Carlton, regional leader of planning for HOK
- Rob Gardner, assistant superintendent for Platte County School District
- Melissa Hazley, director of UMKC Institute for Human Development
- Tammy Henderson, director of community affairs for North Kansas City School District
This story was originally published December 9, 2019 at 6:16 PM.
