Disappointed in the city of Kansas City's priorities on tax breaks for development, a coalition of community groups on Wednesday announced a new watchdog group and threatened to get an incentive cap on the November ballot.
A newly-formed organization of Kansas City and St. Louis residents who say they are tired of wealthy developers getting tax increment financing (TIF) incentives says they will fight the “misuse” of such funds. And they may ask the Missouri General Assembly to change the rules to override city leaders.
Jan Parks, a spokeswoman for the Coalition for Kansas City Economic Development, says they tried to work with city officials last December after the city council appeared to be willing to cap some TIFs. But when they hadn’t seen any movement in that direction, the group decided to join forces with like-minded St. Louis residents, she says.
“Such incentives were designed to be used in blighted and disinvested areas but more often are used in prospering and thriving areas of the city,” Parks says.
“We’re really disappointed,” Park says. “We did kind of back down and agree to work with them. So far it hasn’t been put into play. And Eastside is begging for some renovation.”
Debate on TIF spending has raged in Kansas City since last September when the Intercontinental Hotel sought blight status so it could create a new district that would allow a new sales tax to pay for a $16 million renovation. After howls of protest, the city council in October gave the hotel a one-cent sales tax plan in exchange for the hotel providing cash for truly blighted homes.
Particularly concerning, Parks says, was City Manager Troy Schulte’s recent plan to use $9.8 million in surplus funds from the Universal Floodwater Detention TIF on streets, storm water systems, curbs and sidewalks, as outlined in his April letter, especially when the city’s voters had just approved $800 million in bonds for such work.
“We were like, ‘Wait a minute!’” Parks says. “$6.5 million of that should go back to the taxing jurisdiction and $4.5 million should go back to the school district, which desperately needs the money right now.”
The group, formerly KC TIF Watch, is calling for an end to diverting money away from schools, libraries and social service agencies. It has been working for some time to collect enough signatures to place a proposed ordinance on the November ballot that would cap all tax increment financing at 50 percent of a project, Park says.
KC TIF Watch recently partnered with Team TIF St. Louis to fight for “equitable development,” in distressed areas of both cities, Parks says. If they aren’t heard at their respective councils, Parks says the group will appeal to the Missouri legislature to change the definition of blight, adding specifics and adding that “hotels can’t be designated as blighted.”
A previous version of this story erroneously reported that KC TIF Watch had "merged" with Team TIF St. Louis. In fact, it is partnering with the group.
Peggy Lowe is investigations editor at KCUR. She can be reached on Twitter @peggyllowe.