East Side sales tax chair resigns amid conflicts of interest, delays and millions unspent

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The chairman of the commission overseeing Kansas City’s struggling East Side sales tax has resigned.

Herb Hardwick, an attorney, notified Mayor Quinton Lucas of his resignation in a letter dated Friday. The decision comes after questions were raised last week about potential conflicts of interest involving Hardwick’s law firm and several agencies that were recommended for funding from the tax.

Hardwick made the right decision. “I don’t want the commission viewed in a negative light for any reason,” he told The Star Editorial Board Saturday. “I don’t want it marred.”

The 10-year, one-eighth-cent sales tax was approved by voters in April 2017. The Central City Economic Development tax, as it’s now called, raises roughly $10 million a year for development projects in a district bound by Ninth Street, Gregory Boulevard, Indiana Avenue and Dr. Martin Luther King Jr. Boulevard.

A five-person oversight board recommends spending from the tax, but the City Council makes the final decisions. Hardwick was its chairman.

The board recently recommended a second round of funding from the tax. Of the nine agencies recommended for funding, five have or had a relationship with the Hardwick Law Firm.

On Thursday, Hardwick said he “left the room” when agencies connected with his firm were discussed, and there is no evidence of illegality in the board’s decisions. But unsuccessful applicants had every right to wonder if they lost funding because they lacked a connection to a member of the oversight board.

That distrust would have damaged the public’s faith in the Central City tax. “In an abundance of caution, I have decided to step down ... to eliminate any perception of a conflict,” Hardwick’s letter to the mayor said.

Voters approved the tax more than two years ago to boost employment and opportunity on the East Side.

Yet the city is struggling to get the money in the hands of developers and agencies that need it. While more than $6 million was allocated in the first round of funding, city officials admitted recently that just $624,000 has actually been spent so far — for just one project.

Other agencies that received grants weren’t prepared to accept the cash, apparently. The groups were unfamiliar with city requirements, such as paying a prevailing wage to workers. One city official blamed “financial complexity” for the delay.

Whatever the excuse, the fact that only $624,000 has actually reached the streets more than two years after the tax passed is disappointing and unacceptable. The city should not send money to recipients before they’re ready, of course, but boosting the East Side as voters were promised is impossible while the funds sit in the bank.

City Hall should require agencies to demonstrate a full understanding of requirements before they submit requests for tax money. On Thursday, city staff said they’re redoubling efforts to ensure applying agencies understand their responsibilities. That’s an important step. It shouldn’t take months for approved funding to reach these neighborhoods.

The City Council is thinking about expanding the board from five to nine members, including council members from the 3rd District and the 5th District. That would be a mistake. The sales tax must not be turned into a political slush fund for use by council members.

At the same time, Hardwick’s resignation provides the commission with a chance for a fresh start. The four remaining members should also resign, clearing the way for appointments from the new mayor, the Kansas City school board, and the county.

Voters were promised the sales tax would help rebuild the most challenged areas of our community. These early mistakes should not be fatal, but the tax has yet to meet its potential. The new mayor and the council must work to make sure that promise is kept, too.