Think giant tax break for Waddell & Reed is a lousy idea? Call KC Mayor Quinton Lucas
For a brief stretch this year, Kansas Citians might have thought the era of big handouts to private developers was coming to an end.
That glimmer of hope could soon be extinguished. The City Council is moving closer to giving away tens of millions of dollars in incentives for yet another massive downtown office project and reopening the Bank of City Hall for good.
On Wednesday, a council committee voted 3-1 to recommend approval of an incentive package for a $148 million office tower and parking garage at 1400 Baltimore Avenue.
The building will be occupied by Waddell & Reed, a private asset management firm. The proposal’s code name is Project Decoy, which should tell you something.
Even for business-friendly Kansas City, the incentives are breathtaking. For 15 years, 75% of the project’s real property taxes would be abated, exceeding the city’s own guidelines. Half of the economic activity taxes that pay for police and fire protection would instead be returned to the project during those 15 years.
Local incentives total more than $44 million. But Missouri would kick in another $62 million, bringing the total package to $106 million — two-thirds of the building’s cost.
For what? Apparently to ensure employees earning in excess of $166,000 a year can work in comfort. Employees who, by the way, are simply moving across the state line from Johnson County.
All of this would be bad enough. But it comes on the heels of city approval for $78 million in state and local incentives for two other downtown office projects, one for relocating a USDA office and the other for — well, no one yet.
Add it up. If this latest plan passes, Kansas City and the state will have provided $180 million in help for downtown projects just since Mayor Quinton Lucas took office in August.
The project’s abatements would cheat local schools and libraries out of future revenue. On Tuesday, Kansas City Public Schools superintendent Mark Bedell urged the City Council to give the project more scrutiny — pointing out, accurately, that negotiations reduced the public exposure on the just-approved Strata office building nearby.
Remember that earlier this year, the Kansas City school board kept the full windfall from higher property tax values, in part because of the loss of funds from tax-abated projects. In a real sense, the Waddell & Reed building would be subsidized by property taxpayers in Kansas City, many in older homes on fixed incomes.
That is simply wrong.
New companies building downtown are a boon for Kansas City. At some point, though, office projects must stand on their own. Taxpayers already have poured millions into downtown.
There was one small ray of sunshine Wednesday. Developers asked that the plan be sent to the full City Council for a final vote Thursday, an audacious attempt to ram the project across the finish line. Instead, the Neighborhood Planning and Development Committee moved the project forward, but set the final council vote for Dec. 12.
That gives Kansas City a week to make its wishes known. The mayor — whose commitment to reasonable incentive caps is clearly eroding — should hear from the public. He can be reached at 816-513-3500.
This story was originally published December 5, 2019 at 5:00 AM.