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Government

Residential Development A Poser For Committees Revising Incentives

Two Kansas City council committees are facing difficulties coming up with hard numbers as they delve into the mayor's request for a more consistent process in determining how large incentives for property developers.

Some school and library districts and many taxpayers complain that the city gives up tax revenues that could be put to good use. Some contend that for-profit businesses should pay their own way, without any tax abatement.

Proponents of the tax breaks say they are established practice, a fact of life in today's business world, and often necessary to make a project feasible. Complicating the picture is competition with neighboring communities, some across the state line. 

In the second week of hearing input on the revisions, the Plans, Zoning and Economic Development Committee began to examine work the council has already endorse: the incentives formula and weighting system in the Advance KC program.

Committee Chair Ed Ford told his group that the formula looked very useful as a basis for evaluating development of commercial areas.  However, he said, many of the weighting factors for business, such as jobs likely to be created and business tax revenues likely to be generated simply do not apply to residential development projects.

For example, new downtown apartments, including those in the Power and Light building, do not directly generate jobs except during construction and renovation.  The apartments won't house businesses that can be taxed on inventories or profits or on the retail sale of projects. It is difficult to predict where residents will shop.  If they are moving to be closer to their downtown jobs, they are already paying city earnings tax.

Similar uncertainty surrounds housing developments and the residential portion of mixed-use developments in other areas of the  city.

Ford says the Neighborhoods Committee has been asked to offer some input on what factors should be scored for residential development areas.  He told his committee he expects some of those factors to be much more subjective than those for warehouses, factories, retail facilities or service businesses.

Ford's committee will continue hearing testimony from interested parties for at least two more weeks.

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