City Hall giveaways to developers hurt Kansas City schools

Close your eyes. Picture in your mind an area in Kansas City that you consider underdeveloped and blighted. Are you thinking 51st Street and Prospect Avenue? Maybe it’s Independence and Kensington avenues?

Whatever you pictured, I’m guessing it wasn’t 12th Street and Grand Boulevard. Or Crown Center. The original idea for tax incentives was to provide a motivation for developers to improve areas where they normally wouldn’t consider introducing a project — areas that were underdeveloped and blighted.

Not a bad idea, right?

Unfortunately, the use and misuse of property tax incentives has escalated in recent years in Kansas City. The words “blighted” and “underdeveloped” have become so loosely defined by our city leaders that they can encompass almost any area in Kansas City — and the developers know it.

As a result, developers seek and get generous tax breaks in un-blighted areas, and three projects are good examples.

▪ A project on Ninth and Grand Boulevard would divert millions of dollars in incentives, abatements and tax credits, turning the old Federal Reserve Bank of Kansas City into a 301-room hotel.

▪ The Traders on Grand project, which will convert business offices to residential units, is being given property tax abatement on the building improvements.

▪ Crown Center housing at 27th Street and McGee Trafficway includes luxury housing.

So what’s the problem? Development is a good thing, right?

The problem is that millions of dollars are being denied to our schools and libraries with little evidence that the tax incentive policy is effectively doing what developers have promised. Currently, taxing jurisdictions (school districts and the library) are always out-voted and, therefore, have no control on how their tax revenue streams are diverted.

Developers promise that their projects will bring jobs. Yet the Missouri Department of Revenue recently released its annual report on Missouri’s tax increment financing projects that found of the more than 250,000 jobs that developers projected, fewer than 90,000 jobs were actually created.

The Lincoln Institute of Land Policy recently published a Policy Focus Report. It showed that tax breaks are sometimes given to businesses that would have chosen the same location without the incentive, and more importantly, it found that “the widespread use of incentives within a metropolitan area reduces their effectiveness.”

And city leaders have yet to provide documentation that proves Kansas City is any different.

The City Council needs to revise its policy to create a better-balanced and more reasonable approach. We can provide tax incentives to developers and still allow schools and libraries to have a piece of the pie.

The Plaza, the Crossroads, Crown Center and even downtown are not what the average citizen would consider blighted.

Being judicious about how we incentivize developers’ projects will not scare them away. They will come to understand that Kansas Citians care about their children as much as they care about economic activity.

This story was originally published May 17, 2016 at 1:00 PM with the headline "City Hall giveaways to developers hurt Kansas City schools."