Kansas City voters may see opposing developer tax incentive questions this year

Voter voices: What issues will the next mayor face while dealing with Kansas City’s economic development?

Kansas City has historically been generous in awarding property tax breaks to big developers. Will the next mayor take a different approach?
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Kansas City has historically been generous in awarding property tax breaks to big developers. Will the next mayor take a different approach?

Northland Councilwoman Teresa Loar is championing an ordinance aimed at helping Kansas City compete for business in the so-called “border war” with Kansas-side neighbors.

But supporters of a proposed cap on the city’s tax incentives see it as an effort to thwart the initiative petition slated for the June ballot. The measure would cap at 50% the amount of property taxes the city can abate, exempt or redirect on property being redeveloped.

Loar’s ordinance was expected to be heard in the City Council’s finance committee Wednesday, but she said Tuesday she’s planning to hold it for a later date to tweak the language. It calls for a ballot question asking if voters want to delay any further limiting of the city’s use of incentives until cities in Johnson, Wyandotte, Miami and Douglas counties agree to enact similar caps. She said the idea stemmed from concern the proposed 50% cap would cut off economic development in Kansas City.

“I was getting a lot of calls from people who do that sort of thing in the city, not just developers but the (Economic Development Corporation of Kansas City), a lot of construction companies — people who thought development would just kind of come to a halt,” Loar said, adding projects can go to other cities in the metro if they don’t get enough incentives from Kansas City.

Loar said she wanted to make some changes to her ordinance, including adding Missouri cities, like North Kansas City and Lee’s Summit, that also compete with Kansas City for business.

Jan Parks, spokeswoman for the Coalition for Kansas City Economic Development Reform, which is pushing the 50% cap, saw it as an effort to thwart petitioners’ attempts to limit incentives. She worried voters would be confused by the two opposing ballot questions.

“I’m disappointed in the fact that we went through the whole initiative process — we gathered the signatures, we turned them in — and now, this has been done without that having to happen,” Parks said.

Parks and the coalition collected more than 2,300 signatures this fall to place the petition on the ballot. Their initial hope was to make the economic development conversation central to the mayor’s race by putting the initiative on either the April primary or June general election ballot.

But city staffers slated it for August, believing the June ballot to be ineligible.

Under pressure from the proponents, the City Council voted 11-1 to move the petition from August to June.

The six sitting members of the City Council who ran in the mayoral primary and leading outside candidates Steve Miller and Phil Glynn all opposed the 50% cap.

Kansas City already caps tax incentives for developers.

An ordinance championed in 2016 by Councilman Quinton Lucas, who is running against Councilwoman Jolie Justus for mayor, capped incentives so that developers could have up to 75% of their otherwise-required taxes abated. Before that, projects could get 100% of their taxes abated.

Property taxes collected in Kansas City go to fund various priorities, including school districts, libraries, community colleges and the Mental Health Fund.

A key difference is that Lucas’ ordinance included exceptions for projects in economically distressed areas and those with major community impact.

The coalition’s proposal includes no exemptions. Its proponents maintain that the City Council could vote to waive it for certain projects, but the city doesn’t believe the language provides that flexibility.

Loar said she had spoken to neither the initiative sponsors nor city officials in Kansas and said it was “probably not realistic” that cities across the state line would adopt similar caps, but she said she didn’t see the ordinance as an attempt to thwart the petition.

“I just think we need to be reasonable, and this is just an opportunity to say, ‘Okay, we’ll do the 50%, but we have to have a level playing field and if that’s the case, then we would ask these other counties to do the same.’”

Loar was a co-sponsor of the 75% cap Lucas championed, but even that, she said, had likely slowed development in the city. She argued Kansas City should stick with that and look at other ways to weak incentive policy.

“I don’t think taking it down to 50% is the answer,” Loar said.

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Allison Kite reports on City Hall and local politics for The Star. She joined the paper in February 2018 and covered Midterm election races on both sides of the state line. She holds a bachelor’s degree in journalism with minors in economics and public policy from the University of Kansas.