Plaza owners shouldn’t get millions in tax breaks at the expense of KC schools | Opinion
The Kansas City Public Schools district has been fighting with the city of Kansas City over tax breaks for developers for years, because in the tax abatement world, a big win for developers is often a big loss for schools.
So you would think that by now things would have gotten better for the schools when these deals are struck.
You might also think the city would be better at negotiating with developers to protect its schools and the children they serve. But that has not happened. The opposite has.
Perhaps it’s because some city officials seem to have no problem overlooking KC students’ educational needs in favor of wealthy developers who could threaten to walk away from city deals if they don’t get what they want, which is to pay fewer or no taxes on the property they develop.
Cities, like Kansas City, are eager to see economic growth through development that promises to, at some point down the road, enrich the city. So, they offer huge incentives or tax breaks to broker a deal too lucrative for developers to walk away from.
The latest proof of that is playing out between Port Authority of Kansas City, which serves as a city redevelopment authority, and the owners of the Kansas City Country Club Plaza. On the table is a $1.5 billion redevelopment plan and negotiations over a proposed tax giveaway that could be decided on next month. It’s a decision to be made by Port KC and not the City Council. But only two members of the 13-member council, which includes the mayor, have been openly fighting on the side of the schools in the proposed deal.
School district officials say the deal could cost them and the city’s charter schools about $8.1 million a year over about 39 years. Charter public schools’ revenues are tied to district revenues. In both cases, those millions would translate into a lot of books, education programs, reading specialists, teachers and more.
Fire sale and tax breaks
The Gillon Property Group acquired the Plaza in 2024 for nearly $176 million from Taubman Centers and Macerich. That purchase was significantly less than the $660 million price tag paid for the shopping district just eight years earlier.
Now, Gillon, a Dallas-based company owned by the Washburne family — which has family ties to the Hunt family, owners of the Kansas City Chiefs — is proposing the $1.5 billion redevelopment plan that would include residential and office space.
In November, a deal presented to taxing jurisdictions was based on a proposed $110 million assessed valuation of the entire plaza, which would exempt about $309 million in future Plaza property taxes. That amounts to getting a break on an estimated 72% of the property tax that Gillon would otherwise pay over the next 30 years.
While the tax revenues lost in that proposed deal impact several taxing jurisdictions, including libraries, it’s the school district that receives the lion’s share, so such a giveaway would hit them hardest.
School officials tell me the negotiations are not over yet and that instead of circumstances looking up for them, things don’t appear to be getting much better.
School officials said a new proposal — based on an assessed valuation of the entire plaza that’s between $175 million and $180 million — may be floating that would allow Gillon nearly 100% exemption — decreasing incrementally — on all Plaza improvements for nearly 40 years. That deal, of course, also would be disappointing for schools since the assessment is so low and it drags on for a much longer period of time. All plaza properties would not be fully on the tax rolls for at least 39 years. That’s too long.
Superintendent Jennifer Collier joked that the people negotiating and those pushing back against the deal may not even still be around by the time the exemption is fully lifted.
City Councilman Johnathan Duncan, who called himself “a fierce defender” of a better deal in favor of schools, told me Collier is right that in reality the length of the tax abatement is closer to nearly 40 years.
Port KC spokesperson, Patrick Pierce, told me this week that the $309 million exemption is not a final deal, but added that the numbers tossed out by the district, are not correct. However, when we talked, they weren’t ready to share any more details.
Whatever final deal Port KC makes with Plaza developers, it’s going to impact more than 4,000 public school employees and roughly 28,000 schoolkids across Kansas City.
And I would argue that all of us suffer in some way if our schools are not adequately resourced.
I’m not suggesting that Port KC or the Gillon Property Group are bad guys in this deal-making process. They are engaged in a business transaction and working out what is best for them. But our city officials — all of them — need to be in the fight for our schools our libraries and our kids.
“They deserve to be made whole,” said Duncan. “I’m trying to find a happy medium: a deal that doesn’t devastate our schools and libraries.”
KCPS on the rise
A city resident at one of the public meetings about the Plaza project said it this way: “Development should prioritize people and neighborhoods, not just commercial property groups,” and I agree.
I get it — the Plaza has always been a Kansas City point of pride. In recent years, it has deteriorated with more closed storefronts than during the Depression, according to an earlier Star report.
No one likes seeing that. And of course, we want to see the Plaza redeveloped in a way that restores its glory, its foot traffic and the city’s pride.
But none of that should happen at the expense of our schools and the children they serve. KCPS, which saw enrollment drop 50% from 2000 to 2010, has struggled for years to dispel a long-held and unfair reputation of failing to provide a good public education for students.
Things picked up in 2022 when it regained full state accreditation after several years of raised test scores. In November, voters showed their approval of the district when they approved the district’s first capital improvement bond issue since the late 1960s. And enrollment is growing.
KCPS and other area districts are already in battle with Jackson County officials over proposed county tax credits and tax breaks that would also cost the schools millions of dollars.
The Plaza deal, which diverts millions in tax revenues away from schools in favor of developers, makes financial matters even worse for the Kansas City district. And frankly, that should not happen without ensuring that schools are better protected.
