The Country Club Plaza isn’t what it used to be.
On the outside, its Spanish-style architecture and intricate facades have inspired many residents to call the Plaza the “crown jewel” of Kansas City.
But look a little closer. In recent years, storefronts have hollowed out, sales have slumped and the aging landmark has flipped from owner to owner struggling to revive the once-vibrant shopping district.
Under the new ownership of Dallas-based Gillon Property Group, a rescue plan is underway. Now, city officials and community leaders are facing a massive tax incentive request that they worry could hurt Kansas City Public Schools and other government services.
“A lot of people told us not to” buy the Plaza, said Dustin Bullard, the vice president of partnerships and place at Gillon Property Group, at a Dec. 3 meeting at Kansas City Hall. People said “it seemed tired, it’s unsafe. There’s deferred maintenance. It’ll never be the same as it once was. We didn’t believe that. We believed that the Plaza had meaningful history, very unique architecture. It has great walkability and extremely strong community touch.”
The developers behind the project are seeking a $309 million tax incentive through the Port Authority of Kansas City (Port KC) that would cap the Plaza’s property tax bill for three decades. That would particularly impact Kansas City Public Schools, which receives the majority of the Plaza’s property tax revenue.
Kansas City also is in the process of creating a tax-increment financing district for the Plaza renovation. That kind of tax incentive would essentially take most of the new sales taxes paid at Plaza shops created or bolstered by redevelopment and, instead of spending it on city services, divert it for infrastructure upgrades in the Plaza for the next 23 years.
That incentive would be worth about $110 million over the life of the plan.
Port KC tax breaks
The majority of tax incentives for the Plaza redevelopment would come from Port KC in the form of property tax breaks.
Under the plan, Port KC will technically own the land in the Plaza and lease that land to the Gillon Property Group for a small price.
But because government agencies like Port KC don’t pay property taxes, that gives them the freedom to collect what’s called a “payment in lieu of taxes” — essentially a custom tax rate that’s much lower than what Gillon would owe if it owned the property directly.
The proposal has not been finalized. But the developer sent a document to Kansas City’s taxing jurisdictions on Nov. 6 showing that Port KC intended to give the project a 100% tax exemption on all improvements for the next 30 years.
That means that the assessed property value will be capped for the next 30 years, with a 2% increase on every odd-numbered year. The Gillon Property Group will continue to pay its current property tax bill for that period — roughly $4 million per year until 2054.
But that’s a fraction of what the ownership group would otherwise owe. Over those three decades, the Plaza’s owners will get a break on 72% of their total estimated property taxes they would otherwise pay without the tax incentive, or about $309 million. That’s about $10 million per year.
By comparison, the KC Current received a 90–95% tax break on its riverfront stadium district for 10 years — a similar tax break to the Plaza, but for a much shorter period of time.
And this is where things get tense.
Economic development agencies give tax incentives to developers based on a “but-for” argument.
Basically, developers say that the project would not be possible “but for” a break on their taxes. If Kansas City is willing to sacrifice some property tax revenue for a few years, the developer can break even and construct new buildings that, in the long run, will generate more property taxes further down the line.
But if you give up too much future property tax revenue, you’ll miss out on all of the benefits that you would otherwise get from these kinds of projects.
Taxing jurisdictions, which are the bodies of government that rely on property tax revenue to pay for their budgets, will lose out on a potential $309 million over the next 30 years. Taxing jurisdictions include schools, libraries, fire districts, the city and county and smaller agencies like the Jackson County Community Mental Health Fund.
In this case, Kansas City Public Schools will lose out on the most money. The school district receives about 61% of all property taxes generated by the Plaza.
So if this proposal is approved by the Port KC Board of Commissioners, KCPS is estimated to miss out on $188 million by 2054 — an average of $6 million per year. In 2025, that’s equivalent to about 2% of the school district’s local revenue.
‘I feel pretty underinformed’
When Port KC announced that it would consider this proposal at its Nov. 17 meeting, KCPS fought back.
The Port KC board meeting kicked off on that Monday afternoon with about two dozen KCPS parents in the Zoom virtual meeting room, ready to give public comment to the board in opposition to the proposal.
“I want to live in a city that can provide a quality, free public education to every student,” said Laura Wittmer, a parent of a KCPS preschooler, “not a dog-eat-dog situation where you’re sitting there trying to figure out, do you need to flee to a new community altogether? Do you need to find a way to shell out $20,000 a year for private school?”
Ultimately, leaders at Port KC decided before the Nov. 17 meeting began to postpone a decision on the tax incentives for the Plaza. In the meantime, Port KC CEO Jon Stephens said the agency would engage in further discussions with the school district.
“The leadership at Kansas City Public Schools appreciates the Port KC board not rushing this project through in line with the District’s request for increased participation and transparency,” said KCPS spokesperson Shain Bergan in an email. “KCPS Superintendent Dr. Jennifer Collier looks forward to negotiations that lead to Kansas City’s kids and teachers benefiting from this investment in our region’s future.”
Other parents were frustrated that it was impossible to find public information about the proposal and that they were only given three days of notice that Port KC intended to make such an impactful decision.
That’s partly because Port KC chose not to present this proposal at a development committee meeting, which is the standard for most other projects. At that meeting, members of the public would have seen more information about what the project would look like and more financial information about the developer and the scale of the tax incentive.
Meredith Hoenes, a spokesperson for Port KC, told The Beacon that the agency skipped the development committee due to “timing.” But she said the full approval process will take a month after the developer makes a presentation to the board. Over the course of that month, the public will be welcome to provide more feedback before the final approval.
At the Nov. 17 meeting, even some members of the Port KC Board of Commissioners did not know any information about what was being proposed.
During the public comment period, Port KC Commissioner Morgan Said asked Stephens to provide some background on the proposal that staff had presented to the school district.
“I feel pretty underinformed about exactly what it is that we’re talking about,” Said said, “outside of just, in general, the Plaza may receive incentives someday, administered by Port KC.”
But Stephens declined, saying that he didn’t want to present the full proposal before certain details were nailed down by City Hall.
The Beacon confirmed the details of the tax incentive package by obtaining the document that was shared with the taxing jurisdictions. A spokesperson for Port KC declined to provide the details directly.
To approve the incentives, the Port KC board will need to vote “yes” on two separate measures over the next couple of months. Port KC expects the board to take the first of the two votes on Dec. 15.
Public-sector pushback
Kansas City Councilmember Wes Rogers, who also serves on the Port KC Board of Commissioners, will be one of the seven people who ultimately make the final decision on tax incentives for the Plaza.
(Port KC is a state-sanctioned agency that operates independently from the Kansas City Council, so the taxation deal will never come before the City Council for a decision.)
Rogers believes that the Plaza redevelopment has the potential to boost KCPS revenues. And he said he’ll only vote for the incentives if they ultimately leave the school district better off than it is now.
“We have to do something to make sure the Plaza’s future is as bright as its past,” Rogers said. “We cannot do that in such a way that it hurts KCPS. And in fact, we can’t do that in a way that even keeps KCPS where it is now. This deal needs to be something that both improves the Plaza and puts money into the kids who go to public schools.”
That might sound like an oxymoron — by definition, a property tax break will divert money that would otherwise go to schools.
But the purpose of tax incentives is to make new development possible by getting a project across the finish line. If development agencies are strategic, they can sacrifice some property taxes in hopes that it will pay off later with higher property values and therefore more property tax revenue down the line.
Rogers said the city needs to move quickly on the Plaza. But not so fast that the public can’t keep up.
“We’ve got to incentivize stuff to get good projects done,” he said. “But we shouldn’t hide that from the public. We should be open about what we’re doing because I think it’d be a lot more buy-in if we were showing people what the trade-offs are.”
And that’s one of the big concerns for Bruce Eddy, the executive director of the Jackson County Community Mental Health Fund. He runs one of the taxing jurisdictions that’s set to lose out on potential property tax revenue if the Port KC incentives move forward.
Eddy gets the sense that the Port KC incentives are being pushed through without much careful consideration for the real financial consequences.
He compared it to the Power and Light District, where Kansas City ended up being on the hook for debt payments for years because the developments didn’t generate as much revenue as anticipated.
“Here’s a developer that’s making a lot of lovely promises, and we hope that they are able to do that,” he said. “But that was the same desperation that fueled developments like Kansas City Live, and it turned out that the promises were wildly unrealistic.”
Last month, Eddy was notified, along with the other leaders of taxing jurisdictions, that Port KC was considering tax incentives for the Plaza.
Port KC leaders have been confused why, if they had concerns, it took two weeks after seeing the proposal for them to speak up.
But over the years, Eddy has become cynical about whether the developers and Port KC are actually interested in what he and others have to say.
“Port KC does receive public comments,” he said. “But they have a very poor record of responding to them. You basically have to have a sit-down strike in their lobby to get their attention.”
Eddy has raised concerns with Port KC for years about the way it handles tax incentives. Those concerns include whether it’s doing a rigorous enough financial analysis to make sure that developers aren’t embarking on risky projects cushioned by handouts that they don’t need.
“Gosh, there’s a lot that we’re not seeing,” he said. “And if they don’t follow through, isn’t the public at risk? And we won’t know that for 10 years or more. And by then, all these politicians will have served their terms.”
This story was originally published by The Beacon, a fellow member of the KC Media Collective.
