With many reservations and a few conditions, an advisory panel has recommended doling out yet more tax incentives for developers of another high-rise luxury apartment building in downtown Kansas City.
Now, in theory, it’s up to the Kansas City Council to decide whether to give the developers for the proposed upscale Three Light apartment tower a property tax abatement. But effectively, the council has already locked itself in.
“If we say no, then the city pays for that, not the developer,” said City Council member Katheryn Shields, who along with council members Alissia Canady and Dan Fowler objected last winter to the continued giveaways to the developer, Cordish Companies. “It’s the city that bears the brunt.”
The council made a mistake in ignoring their argument that the city couldn’t afford a $17.5 million subsidy for a Three Light parking garage.
Kansas City also subsidized parking for One Light and Two Light, as laid out in a 2004 development agreement drawn up when downtown was struggling.
In return for the parking garage for Three Light, Cordish is supposed to redevelop the Midland office tower as affordable housing.
We still don’t see that Cordish needs the tax breaks for Three Light, which are given out far too freely in general.
And with so many other pressing needs, goodies for developers of luxury apartments should really be out of the question.
“It’s a tragedy,” Shields said. “We are not maintaining any of our roads or bridges or buildings. There is no money, and yet every day we make more commitments.”
After Cordish argued that the $130 million project wouldn’t be feasible without assistance, the Chapter 353 Advisory Board voted 3-1 to recommend the abatement.
But they also recommended an audit five years after Three Light opens to see whether the tax incentives are really necessary. That’s hardly an outrageous demand.
The case for tax incentives was “hard for me to swallow,” the board’s skeptical vice chair, Gabriel Okafor, told Cordish executive Nick Benjamin, who complained that with interest rates and construction costs going up, “there are a great deal of pressures and risks.”
Why again should the city be expected to mitigate these?
Initially, an analysis by SB Freidman Development Advisors founded no need for an abatement for Three Light.
They revised that after Cordish sent new data and had the gall to bemoan competition because of the already large supply of luxury apartments in downtown Kansas City.
That’s almost comical, given that according to the report, a “meaningful share of the competition” comes from their own One Light and Two Light buildings. “There is therefore a somewhat circular argument for assistance,” the report says, given that “market pressure from the developer’s own projects is reducing the projected project cash flow, thus indicating a need for greater public assistance.”
Almost comical, that is, because it’s not amusing that with funds so short, we’re easing self-inflicted market pressure on a developer we keep subsidizing.