As Kansas City’s downtown grows, taxpayer subsidies can decline

Cordish Co.’s first apartment tower is getting millions of dollars in public subsidies. But should the next tower get a similar deal?
Cordish Co.’s first apartment tower is getting millions of dollars in public subsidies. But should the next tower get a similar deal? The Kansas City Star

Downtown’s continued comeback is raising an intriguing question for elected officials.

When should Mayor Sly James and the City Council pull back on or even deny local taxpayer incentives for developers who seek the public’s help in building offices, apartments or other projects?

Stoking economic growth is always a priority in the urban core. But so are protecting taxpayers from excessive giveaways and using increased tax revenues to provide better public services.

City Manager Troy Schulte touched on the subject last week while giving an upbeat report to a group of downtown leaders. He highlighted current and planned construction in the Transportation Development District that voters approved to help fund the new streetcar line within its boundaries.

At one point, Schulte noted that only 16 of 43 major projects proposed in the Transportation Development District are receiving incentives. That’s encouraging to hear.

In some cases, not all available subsidies are being pursued or granted. Earlier this month, for example, a San Francisco-based employment law firm announced it would move its administrative services center to Crown Center, adding 275 jobs. In an email exchange, Schulte and other city officials told The Star that Littler Mendelson would receive some Missouri state tax breaks but nothing special from the city.

Also last week, officials with the Cordish Co. confirmed they are discussing with the city plans to erect an apartment tower on Truman Road between Walnut Street and Grand Boulevard. It would be a companion of sorts to the One Light residential tower now under construction a few blocks away. That tower is receiving a reported total subsidy of close to $10 million.

But it’s also been wildly popular, drawing plenty of interest from potential renters. Given that, city officials need to insist on seeing compelling evidence regarding what kind of taxpayer assistance, if any, should be given for the second tower.

In addition, city officials should further discuss whether it makes sense to give away future tax revenues to woo high-income dwellers who reasonably could be expected to afford slightly higher rents.

Ultimately, this is a good problem to wrestle with, because it means people and businesses have an increased interest in downtown Kansas City.