Kansas City Council clashes over spending millions in city funds to support midtown apartment project
In the end, a committee moved to allocate a third of the TIF funds to the city’s Housing Trust Fund.
Debate among Kansas City Council members grew heated Wednesday during a Finance, Governance and Public Safety Committee meeting over a proposed ordinance to continue funding development projects in midtown using tax increment financing (TIF).
Sponsored by At-large Councilwoman Katheryn Shields and Councilman Eric Bunch, the ordinance directs City Manager Brian Platt to use surplus money generated by TIF to support midtown developments , including a $105 million project by Chicago-based developer MAC Properties along Main Street and Armour Boulevard.
Councilwoman Melissa Robinson, who represents the 3rd District, took issue with that part of the proposal, which would help offset the costs of 385 apartments along the expanded streetcar route.
Instead, Robinson introduced a committee substitute that would direct two-thirds of the available funds to the city’s Housing Trust Fund, a program meant to preserve and increase the city’s affordable housing stock.
“We neglected to do that,” she said. “Instead we're giving one developer the exclusive opportunity to utilize the city's dollars to displace poor residents who are unable to afford MAC Properties rent.”
In the end, the committee moved to allocate a third of the TIF funds to the city’s Housing Trust Fund, which Shields said she supported.
The updated ordinance was approved by a 3-2 vote and now moves to the full council for debate.
Robinson said she was unhappy with the outcome of the meeting, which at times led to heated exchanges. At one point, Shields was heard to utter a barnyard epithet.
“We're writing checks to developers who refuse to ensure properties are affordable,” Robinson said. “I am incensed at what happend at city council today.”
The Midtown Redevelopment Tax Increment Financing Plan was approved in December 1992 with the goal of eliminating blight, growing the city’s tax base, increasing employment, preserving existing housing and constructing new residential housing.
Generally, tax increment financing, or TIF, uses property and other taxes generated by a new development to pay for construction and improvement costs. It’s one of several tax incentive programs that developers can apply for to offset the costs of their proposed development projects.
The Midtown Redevelopment Plan expires in April 2023. When that happens, Kansas City will be able to collect property and sales taxes generated from the Midtown TIF District amounting to about $1.8 million.
The ordinance offers guidance on how the city should use that money:
- One-third would go to the city’s Rehabilitation Assistance for Midtown Properties (RAMP) program, which provides financial assistance to homeowners to maintain and rehabilitate their homes using TIF funding.
- Another third would go toward the development of new residential units within the Midtown TIF District. The ordinance proposes that City Manager Platt use the Planned Industrial Expansion Authority, a tax incentive agency, to help fund the proposed MAC Properties development. The ordinance proposes contributing no more than $526,051 per year over 20 years — amounting to about $10.5 million.
- Under the original ordinance, the remaining third of the money would have been used to subsidize renters living in the TIF District. That section of the ordinance was replaced with language to direct a third of the money to the Housing Trust Fund.
Opposition to the ordinance
Robinson said the city is continuing to make it more difficult for people to afford to live in Kansas City. She said that continuing to invest in the kind of development MAC Properties is proposing is a slap in the face to unhoused residents in the city.
“We continue to vote in ways that are incongruent to how we say we want our city to grow and what we want our city to be, and what the identity is of Kansas City,” Robinson said.
The tenant union KC Tenants has criticized Shields’ ordinance for proposing to give more money to MAC Properties, which already owns many apartment buildings in midtown.
“It's money that comes from taxpayers money,” said Briana Van Deusen, a member of KC Tenants, referring to the use of tax incentives to fund the MAC Properties development. “We're basically funding our own displacement. And none of the apartments that they're building are going to be truly affordable. We're not going to be able to live there.”
Van Deusen, a midtown resident for most of her adult life, was one of several KC Tenants members who attended the committee meeting. She said KC Tenants supported Robinson’s committee substitute to divert funds to the Housing Trust Fund.
“We don't want another developer coming in and displacing the people that actually make midtown what it is,” she said.