The Port Authority of Kansas City backed off Monday from a vote on a sweeping tax incentive package for developers of the Country Club Plaza.
Port KC’s special virtual meeting was attended by about 160 participants but was delayed for more than 17 minutes by a remote hack. The hack set a tone for a contentious meeting where many attendees derided the proposal and a process that has been delayed several times already.
The decision punts the vote into next year after Kansas City Public Schools Superintendent Jennifer Collier called the deal “a betrayal” and dozens of parents, teachers and neighborhood leaders lined up to oppose it.
How Port KC incentives work
Under Missouri law, Port KC has the authority to issue bonds and technically take ownership of development projects, leasing them back to developers. Because government agencies don’t pay property taxes, this structure allows Port KC to collect “payments in lieu of taxes” or PILOT fees, which functionally become a custom, reduced tax rate instead of what developers would otherwise owe.
The PILOT from a proposed Plaza renovation, which calls for several taller apartment and hotel buildings in the historic shopping district, would be paid out to the same recipients at the same rates as standard property taxes. For example, roughly 61% of the PILOT money in this proposal would go toward Kansas City Public Schools just like standard property taxes.
What Gillon wants
The current Plaza owner, Dallas-based Gillon Property Group, is seeking up to $1.4 billion in conduit bonds from Port KC to finance a 15-year overhaul of the Plaza. Gillon has said it will invest $1.49 billion into redeveloping the Plaza but seeks the conduit bonds as a tool to obtain tax incentives.
The incentive package would lock in property tax payments at 2024 levels for 30 years, with annual increases starting in year four. The rate would then increase 1.5% annually through year 20 and then 2% annually in years 20-30.
Port KC CEO Jon Stephens laid out the math. Base PILOT payments would total $209 million over 30 years. New construction — 750 apartments, 278 hotel rooms, 1.7 million square feet of commercial space across 19 blocks — would generate roughly $57 million more.
New buildings would receive steep exemptions. New office and retail projects would pay just 10% of typical property taxes for the first decade, stepping up to 70% by years 26-30. Hotels and apartments would start even lower, at 5% of typical taxes.
Stephens framed the deal as a lifeline. The Plaza has shed half its appraised value since 2021. The previous owners defaulted on a $300 million note in September 2023. And last Friday, Lockton Companies announced it’s leaving its headquarters at the north edge of the Plaza for Leawood.
Chris Harren, Gillon’s senior vice president of development, said the company has been “in contact with Port KC staff and KCPS school representatives intensely over the past week.”
‘A betrayal’
Collier wasn’t buying it. She said the district was evaluating proposals as late as 11 p.m. the night before the meeting — and still couldn’t reach acceptable terms.
“This proposal represents a betrayal of our community’s commitment to our schools,” she told the board. “The proposal is a loss for our teachers, our students and our residential taxpayers.”
She noted that while the deal is pitched as 30 years, some parcels wouldn’t pay full taxes for 39 years because the clock doesn’t start on tax breaks for individual buildings until construction starts. She also pushed back on claims the revised deal represented progress — the November version would have rolled payments back below current levels, while this one merely holds them flat.
“Let me be very clear: This is just the district getting money that we were already getting,” Collier said. “It is not more money for KCPS kids or teachers.”
The district had asked for 30% of new growth during the incentive period to account for teacher raises. They didn’t get it.
“We’ve been forced to negotiate against ourselves,” she said, “and we will not be forced under duress to endorse something that is not what’s best for Kansas City’s kids.”
‘Treat us like partners’
Kansas City Public Library CEO Abby Yellman said taxing jurisdictions had been largely shut out of negotiations.
“Outside of the initial pro forma, we have not received updates about this project,” Yellman said. “The lack of communication makes it difficult for all of us to really assess what those impacts are.”
She called for accountability measures that don’t yet exist and said both schools and libraries are facing state and federal cuts that mean they need every dollar they can get.
“The reductions to our revenues are not sustainable for the schools nor for us,” Yellman said.
Education advocate Tiffany Moore reminded commissioners that KCPS families shop at the Plaza, work at the Plaza and voted overwhelmingly for the district’s first bond in 57 years last spring.
“This deal is not ready,” Moore said. “This deal is bad for public education, bad for the city, and in the long run, bad for the Plaza’s reputation as a Kansas City crown jewel.”
What’s next
Taking cues from the speakers, Port KC Board of Commissioners Chair Jack Steadman asked to delay the vote to take in more public comment and engagement. The board agreed.
Port KC will take up the bond inducement vote again in 2026. After that, a second authorization vote would be required before any incentives are issued.
The property tax package is separate from a $110 million tax increment financing plan for Plaza infrastructure that still needs City Council approval. Gillon has said it wants to begin construction in 2026.
This story was first published by The Beacon, a fellow member of the Kansas City Media Collective.
