The sham debate over tax incentives for downtown projects: KC Council can just say no

The Kansas City Council has approved the controversial Strata office project downtown, a fact that will disappoint some people but should not surprise anyone. Wealthy developers are relentless when public cash is on the table. They almost always win.

Mayor Quinton Lucas voted against the $132 million plan. On Friday, his office said he would not veto the ordinance, which means Lucas is unwilling to stop something he’s against. Make a note of that strategy. It will happen again.

For now, though, the vote means the major achievement of the mayor’s first months in office is self-evident: Kansas City has handed out more than $50 million in state and local incentives for downtown projects, with more on the way.

That, too, will disappoint many Kansas Citians, who hoped Lucas would chart a different path.

Last June, voters rejected a plan to cap property tax development incentives at 50%, a measure most of the city’s developers and builders opposed. If voters would just say no, developers promised us, they would help limit incentives after the election.

It’s clear now that was not true.

It’s also apparent that the developers of the Strata project were not honest when they insisted that public support for the office tower was essential to move it forward.

The original $63 million in incentives included $36 million for parking and $27 million for the tower. On Thursday, only the parking remained in the deal.

Supporters said the reduced Strata deal represented a victory for City Hall and taxpayers. In this sense, they’re right: Everyone now understands the ruse at the heart of developer requests for public subsidies.

Clearly, public help was never essential for the office tower. All the City Council had to do was say no, and developers scurried back to the table, trying to find a way to build the tower without taxpayers on the hook.

This is pretty important on its own terms. But it has enormous implications for other projects, including public subsidies for a new Waddell & Reed office building downtown. That developer wants tax abatements, sales tax exemptions, and city subsidies for the $140 million structure.

Why would the City Council agree to a deal now? If council members push for a better bargain, the public’s exposure can be reduced, or eliminated. The council must approach the Waddell & Reed proposal as a starting point, not a take-it-or-leave-it proposition.

Other builders should face similar scrutiny in the years ahead.

Developers will cry foul, of course. They’ll insist risk must be shared by the public in order to “make the numbers work.” They’ll threaten to walk away if abatements are restricted or incentives reduced.

After the Strata deal, those threats will seem very empty.

Here’s the brutal truth: Developers don’t ask for public subsidies because they need them. They ask because they can get them. Why risk your own money, they believe, when taxpayer funding can be had?

Kansas City Councilwoman Teresa Loar was a “no” vote on the Strata plan. “We have so many problems,” she said. “Yet we’re putting $36 million in another development downtown. ... Who’s going to benefit from that?”

I think we all know the answer. We also know who won’t benefit: Kansas Citians who are struggling to make a budget, or are paying higher property taxes, or are hiding their children as gunfire erupts in the night. They will have to wait, again.

This story was originally published November 14, 2019 at 5:00 AM.