At a community meeting in southeast Kansas City tonight, dozens of local residents gathered, apparently to vent their frustration with two of the main speakers: Owen Buckley, whose company owns what was once Bannister Mall (now a pile of rubble), and Councilman John Sharp.
Many of the people had come to previous meetings where Mr. Buckley and his attorney had painted a very rosy picture of what a soccer-centric redevelopment plan would look like. Even before the collapse of Wall Street, it was clear to me and my friends that this plan would never happen, and if it did, that it would be a failure of spectacular proportions.
So, we were in the small minority there who weren't upset that there won't be another pro-sports arena in Kansas City. That's probably why I felt so detached from the whole thing. That feeling only got worse as Councilman Sharp convinced some in the crowd that it wasn't enough to have given away the store (in the form of diverting to the developer any taxes on the land or from any economic activity that may happen there). No, we needed to give them even more "economic incentives" with the help of the State of Missouri.
Oy.
The irony of these "economic incentives" now is that -- not having the burden of property taxes -- the owners of the land have no incentive to develop it. There is minimal cost to them as they sit on the property in hopes a better deal will come along sometime ten or twenty years down the road.
Yet there was no suggestion of revoking the tax-exempt status of the land. And there was not one mention of the plan that wouldn't have been a spectacular failure, but which never had much of a chance due to the backward thinking in this town. Read about that in The Pitch.
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10 comments:
Property is not tax exempt. TIF only captures the increase in taxes after property is developed. Plus TIF has been approved for this site, but not activated yet, so it is collecting taxes as any other non-TIF site. No opinion on the project or incentives; just clarifying tax situation.
This is not a TIF. It is a Super-TIF, which I think is basically a black hole as far as the public treasury is concerned. I understand that property taxes are frozen and the money goes into an escrow which then reimburses the developer when improvements are made. I also have been told that the tax abatements are in effect now, though there is a 23-year time limit. My source says the TIF at Marion Park is about to run out though it hasn't been developed. So, it seems that a TIF can start before any development project.
There's a reason it's called 'abatement' and this project was given a 100% abatement.
What are you going to do about Dumb and Dumber? I don't know who goes first, Sharp or Jolly.
Well, I'd say Jolly's pretty much a follower, if that gives you a clue.
Any ideas?
Yes it was approved for Super TIF, but that only applies to City sales tax. The property has not been approved for abatement, only TIF, two entiely different things. TIF only captures incremental increase in real property taxes and 50% of incremental increase in local sales tax (100% of incremental increase of City sales tax if Super TIF). So, no matter what, the real property taxes paid before the redevelopment happens will continue to be paid throughout the life of the TIF (often called the "base year"). True abatement (which TIF is not) just stops all taxes and is rare rare rare (even most abatement progrmas require that the base year taxes are still paid so that the taxing districts don't get less than what they were getting). Lastly, the Trails TIF Plan was approved, but the capture of TIF revenue has not been activated. Activation can occur before development starts, but that is not the case here. You can confirm all of this with a call to the EDC or by checking KCMO ordinances. Again, no opinion on the actual project, but this is how the TIF is set up. Thanks.
Anon is right. The tax abatements don't kick in until development "goes vertical". However, existing property owners are discouraged from improving their property by the looming threat of an area-wide redevelopment. Also, I picked up this comment from a friend of mine, regarding the developer allowing an option to buy land within the TIF to expire:
This is a game of monopoly to Buckley (the developer). he doesn't own the old golddiggers building and that is one of most valuable pieces of property. so it is in his interest to shut this down and decrease the value further until he owns everything. He knows that he doesn't need an option.
I've been to a lot of community meetings this summer, but I missed this one. I wish I had not. Now, I'm reading things I don't much like (but not in the MSM).
Good reporting, thank you. Linking you in my blog so that my readers can be informed (and highly annoyed) too.
Craig,
What are you folks going to do about Sharp? His track record of being successful at anything is very thin. The election is 14 months away so who is going to step up to the plate and remove this failed leadership for the 6th?
Now Lane4 is paying even less in taxes as the 3-Trails Community Improvement District has removed the assessment on property to fund their activities. Only sales taxes now, and the "piles of rubble" Lane4 owns have no sales.
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