A controversial developer’s plan to build a 251-unit apartment project is moving forward, but without the incentives it initially sought from the Port Authority of Kansas City (Port KC).
A deal between the Port KC and St. Louis developer Lux Living stalled in May after criticism of the agreement from commissioners and representatives from the housing advocacy group KC Tenants.
After months of silence on the proposed $55 million, seven-story residential building, the plan received unanimous approval from the Kansas City Plan Commission Tuesday.
Lux Living initially sought a 25-year tax exemption on the project. It complied with Kansas City’s new affordable housing ordinance that requires multifamily projects to receive incentives to lease 20% of their units at rates that meet the city’s definition of affordable housing.
But Port KC president and chief executive Jon Stephens said Lux Living recently withdrew its requests for any incentives and notified the port authority the team doesn’t intend to pursue any exemptions from the port or any other entities.
“Therefore, the project is anticipated to be a privately funded, market rate project,” Stephens said in an email.
Additionally, Port KC plans to sell the land to Lux Living instead of leasing the property, meaning the land and any improvements on it will be fully taxed.
It isn’t clear if Lux Living still plans to include affordable housing in the project. The developer did not immediately respond to a request for comment on the project.
Bruce Eddy, who leads the Jackson County Community Mental Health Fund, said Lux Living’s decision to privately fund the project poses the question of whether the developer needed the incentives to build the project in the first place.
“There’s a lot of stuff that gets built without public subsidies, and I continue to be skeptical about the mantra that you need tax subsidies in order to create residential and commercial,” Eddy said. “It’s significant because you have a tacit admission that the market is working the way it ought to be.”
Eddy’s organization, which supports mental health agencies, relies on property tax revenue for its funding. The mental health fund can be affected when commercial developments receive tax breaks and often weighs in on the Port Authority’s decisions to award exemptions.
Port KC faced heated criticism from commissioners and community members at a meeting in May for considering awarding the 25-year tax exemption.
At the May meeting, Port KC Commissioner Kevin O’Neill said developer Lux Living has a “sketchy history.”
“For an out-of-town contractor to come in — and have that type of background and [want] that length of abatement of 25 years — I’m going to have a hard time supporting this,” O’Neill said.
At the same meeting, members of the KC Tenants organization criticized Lux Living’s affordable housing units and the company’s history.
“Given their track record, I don’t even know how you could consider them in the first place."Ruby Watson, KC Tenants member
“Before you all start dishing out bonds you should really do a deep dive on these companies,” Watson said.
The Midwest Newsroom published a report in May, detailing how Lux Living did not disclose Alston’s 2017 settlement with the Securities and Exchange Commission in response to a question in Port KC’s application.
Additionally, the St. Louis Post-Dispatch published a story describing tenants of Lux Living’s St. Louis apartment building, The Hudson, complaining about living in unfinished apartments and maintenance and security issues.
Lux Living’s Berkley Riverfront project still needs approval from the Kansas City Neighborhood Planning and Development Committee and the city council.
