KCATA rejects incentives for Midtown apartments after opposition from tenants, schools
A developer with aims of building hundreds of new apartments in Midtown Kansas City has once again lost a public battle over incentives.
The Kansas City Area Transportation Authority Board of Commissioners on Wednesday rejected an incentive request from Mac Properties. The Chicago-based developer sought a 75% reduction in its property taxes for 15 years as it revived plans for a new residential and commercial development at the intersection of Main Street and Armour Boulevard.
As was the case during an advisory board meeting last week, the proposal faced fierce opposition from advocacy group KC Tenants, which organized Midtown residents and some tenants of Mac Properties to testify against the project. Opponents said the company has already driven up rents in Midtown, forced out Black and poor residents and has failed to adequately maintain its apartments.
The company is one of Midtown Kansas City’s most prolific developers. Owning 2,500 apartments, the firm has renovated historic buildings into new housing and built new apartment buildings on Troost Avenue, Armour Boulevard and Main Street.
With its 1 W Armour development, Mac Properties aimed at renovating a U.S. Bank building on Main Street into new housing and retail space and adding two apartment towers over the site of current parking lots and a Pancho’s fast food restaurant. The $100 million project would add 25,000 square feet of new retail space, 300 new market rate apartments and 191 parking spaces.
The KCATA, which crosses city, county and state lines, was created in the 1960s as a result of a bi-state “compact” approved by state legislatures in Kansas and Missouri and ratified by Congress. Several years ago, the organization sought to leverage its unique authority to play a larger role in development deals — typically the purview of city agencies or others like the Port Authority of Kansas City. To do so, it created Ride KC Development Corporation, a separate nonprofit overseen by the KCATA squarely focused on economic development.
That organization’s advisory board recommended approval of the incentives last week. But more than an hour of testimony against the project on Wednesday proved persuasive to the full KCATA board, which is comprised of five members from Kansas and five from Missouri.
After an attempt to delay a vote on the project failed, the board voted 6-2 to reject the incentive request. Board members Louie Wright and Daniel Serda voted against the motion to reject the incentives. Two members were absent.
Serda oversees the Ride KC Development Corporation board but did not vote on the measure last week. He said the project probably shouldn’t have yet made it to the full board for consideration. He noted that the organization is rethinking the particulars of its development incentives.
In January 2022, Mac Properties sought millions of surplus funds from the Midtown Redevelopment Tax Increment Financing Plan to offset costs of the 1 W Armour project. But, facing immense pressure from KC Tenants, the City Council instead voted to transfer the $10.5 million to the city’s Housing Trust Fund, which funds new affordable housing projects.
On Wednesday, Serda said KCATA’s development program was not created to foster “incentive shopping” from developers.
“That was never the intent,” he said. “We are not an incentive agency. We are a transportation authority.”
But opponents viewed the measure as incentive shopping.
“Our city’s elected leaders were clear about their priorities,” said KC Tenants member Gabe Coppage, who said he lives about six blocks from the proposed development. “Now after being rejected by tenants, the community and even our elected officials, Mac is now coming around all of our backs desperately trying to get public subsidies from this board.”
It’s unclear what the vote means for the future of the project.
Last year, as Mac sought the city funds, the proposal included 385 units, 10% of which would be rented to those with an income at or below 60% of the U.S. Department of Housing and Urban Development median family income and another 10% at or below 30% of the median family income. That totals 77 units.
Since that time, Mac Properties has removed the affordable housing component and reduced the scope of the proposal.
Peter Cassel, the company’s director of community development, last week said the incentives were necessary to help offset the relatively lower rents in Midtown compared to pricier markets like downtown Kansas City.
On Wednesday, Cassel told the KCATA board that Kansas City must encourage the creation of new housing, whether its luxury apartments or affordable units. Otherwise, the city risks the affordable housing crises facing major cities like New York and Seattle, he said.
Cassel described the 1 W Armour project as “workforce housing,” a term that often signals units will rent above those in low-income developments, but for less than luxury rentals.
“It’s absolutely critical that Kansas City continue to build new housing over the coming years,” he said.
Cassel could not be reached for comment after the meeting.
In addition to testimony from KC Tenants, KCATA board members also received written opposition from Melissa Robinson, a Kansas City Council member representing the third district, and verbal testimony from Kansas City Public Schools.
Tax abatements like the one sought from Mac Properties would most affect public schools, which disproportionately rely on property tax revenues. Incentives divert potential revenues from important programs like early childhood education, said Kathleen Pointer, the school district’s senior policy strategist.
The developer previously indicated that new one-bedroom apartments at 1 W Armour could rent for more than $1,600 per month.
“Our teachers cannot afford these rent rates,” Pointer said. “So what workforce is this for?”
