Kansas City Council Approves Tax Break For Luxury Apartment Tower Downtown
The developer of the One Light and Two Light luxury high rises in downtown Kansas City, Missouri, will get tax breaks to build a third luxury apartment tower, Three Light, at 14th and Main streets.
On Thursday, the Kansas City Council in an 8 to 4 vote authorized a 100 percent tax abatement for 23 years to Cordish.
The city has already agreed to pay more than $17 million for a parking garage for the developer's project, as it did for the first two.
Mayor Sly James, along with Mayor Pro Tem Scott Wagner and councilmembers Heather Hall, Teresa Loar, Jermaine Reed, Lee Barnes, Scott Taylor and Kevin McManus voted to approve the incentives. Council members Dan Fowler, Katheryn Shields, Jolie Justus and Alissia Canady voted no. Councilman Quinton Lucas was absent.
The approval was not a surprise — an agreement has been in place with Cordish since 2003, before Mayor James or the current council were in office.
But the agreement received some pushback when it came before the council in March. The current council has passed legislation capping tax abatements at 75 percent, except for in truly blighted parts of the city. Because the agreement with Cordish was in place prior to that ordinance, it is not subject to those limits.
Councilwoman Shields said the market downtown has changed in Kansas City, Missouri, so much that if the development were to fail, another might go up in its place without incentives from the city.
"If it saves us $17.5 million dollars of general fund tax dollars, which we don't have, and it saves us subsidizing the school district ... another $4 million, then I'd just as soon this project didn't go forward," Shields said.
Taxing jurisdictions like public schools and libraries lose out on property tax revenues from tax-abated projects.
Under the deal approved on Thursday, Cordish will have to make increased payments, or PILOTs, to those jurisdictions to make up for the lost revenue.
Kansas City Public Schools superintendent Mark Bedell previously testified before the council that while he was not happy about the agreement, he is grateful for the boost in PILOTs, and understood the city's previous commitment to the developer.
Shields worried the city has already given too many sweet deals to developers.
"The more a city gives up in incentives, the more developers expect to get in incentives," Shields said.
Shields added that this is not the last time the city will have this exact same conversation with Cordish — under the 2003 agreement, the city also committed to building parking garages and awarding tax breaks for Four, Five and Six Light, should they ever happen.
Lisa Rodriguez is a reporter and the afternoon newscaster for KCUR 89.3. Follow her on twitter @larodrig.