Fencing Liberty Memorial? Is the Civic Irony Meter on the Fritz?

You need to be a hyped-up brand of clueless to propose a fence surrounding something named for Liberty, but the private Liberty Memorial Association wants to spend $1.4 million to do exactly that. (Yes, these are the same people who reacted to a minor spending cut by threatening to "douse the flame" on the Liberty Memorial.)

To justify their ironic request, they cite a fear that "undesirable activity" could take place at the park. They also claim that "the memorial, as a national historic landmark and home to the National World War I Museum, deserves the protection of a fence." If anything "deserves" fencing, I doubt that Liberty leads the list.

The open approach to Liberty Memorial, when viewed from the North or the South, is one of the visual splendors of our city. For a private group of elites to rob Kansas City of that vista just so they can keep out "undesirables" is an affront to common sense, good judgment and liberty itself.

Keeping my Word

I told Deb Hermann that I would not join in the line-by-line criticism of the Council budget, and I'll stick to my promise.

That said, I will point out, however, that Yael Abouhalkah has been uncharacteristically insightful here, here, and here. If I weren't a man of my word, I'd be writing something very similar.

Is the City Council Irrelevant?

Yesterday, Funkhouser went ahead and signed the ordinance extending the TIF package for the Savoy Hotel. While I criticized the extension here yesterday, and I questioned the good faith of the Council, the developer and even the developer's lawyer, it turns out that the only party truly deserving of scorn on this issue is the Council.

The developer, developer's attorney, Funkhouser and the other taxing districts went ahead and worked out a better deal without the Council, rendering irrelevant the Council's attempt to actually harm our city. Actually, as Mark Forsythe correctly pointed out the other day, they had already worked out a better deal before the City Council followed joined in Terry's Terrible Temper Tantrum and, incredibly, approved a worse deal for the city than was already on the table!

Truthfully, they went ahead and approved an ordinance that was worse than the developer had actually agreed to, just because Terry Riley was angry that someone else had negotiated the deal! Is that the sort of person you voted for?

Fortunately, the adults fixed the situation. Through written, good faith agreements apart from the Council, the developer agreed to do the right thing, whether the Council cares about the good of the city or not. Thank goodness Funkhouser worked with them to make it all come out okay.

Meanwhile, city hall observers are left to smirk at the Council's behavior. The more juvenile members of the Council have been claiming lately that the Mayor is "irrelevant", just because they don't talk to him much. Sadly, the Council is becoming Junior High at its worst, with cliques excluding others on the Council and bragging about it to the rest.

If Mark were the sort to join in those games, he would be out whispering to others that the Council is "irrelevant", and snickering at the silly ones who joined in Riley's malfeasance.

But he won't do that.

Instead, he realizes that the Council remains very relevant, and capable of much more mischief in the future. In this instance, he managed to prevent them from bringing as much harm to the City as they attempted, but he knows we are still burdened with Cauthen for a couple years because of their immature behavior. Alas, the City Council may be outsmarted on occasion, but they are not irrelevant. Fortunately, neither is the Mayor.

Savoy TIF - A Reason to Despair

If Kansas City is ever going to do the right thing, this should have been the moment. Everything was set up absolutely perfectly for success, and we absolutely blew it.

We have some fine and intelligent people on our City Council. We have a Mayor who even his most dogged opponents acknowledge has the political courage to stand up to developers seeking to get wealthy from tax funds. We have a budget crisis raging, to keep the focus on the budget imbalances created by bad decisions made in the past. We even have a sane economic development policy that the Council has already agreed upon, to help it make rational decisions.

Surely, under these circumstances, when a wealthy developer approached our City with his hand out, our Council would have the strength and good sense to honor their commitment to the citizens of Kansas City, right? Surely, at this moment of crisis, they would not screw us one more time, for old times' sake . . .

Wrong.

Absolutely incredible. With the sole exceptions of Mayor Funkhouser and John Sharp, the City Council went ahead and showered a rich developer with undeserved tax breaks, at the urging of a well-connected development lawyer who gave them money.

For a great explanation of just how bad a deal this was, go read Mark Forsythe's excellent analysis at The Kansas City Post. Make no mistake about it, Kansas City taxpayers are helping to make the rich richer, while facing cutbacks in basic services.

And your council member is fine with that.

If they're not going to stand up for us now, when will they stand up for us? When Terry Riley chooses not to play silly games over turf? When the development lawyer appearing before them has not greased their palms with substantial campaign donations? When the contrast between having money to pay for basic services and having money to pay for a "four star" restaurant is somehow sharper?

It's moments like these that make me wonder why I care. The deck is stacked in favor of the status quo, and even good people like my city council representatives are riding with Terry Riley and Jerry Riffel instead of Kansas City taxpayers.

I can only hope that sometime today, Mayor Mark Funkhouser vetoes this disgusting display of legislative sell-out, and that a few good council people will look themselves in the mirror and think about why they got involved in the first place.

I know it's politics, but, really, how could you fall this far?

PIMBY?

Yael Abouhalkah had a funny observation in his blog post about the proposal to stop siphoning money away from taxpayers to support the Costco TIF Plan.

Jan Marcason, a sharp and well-intentioned City Council member, also questioned what happened last week.

Marcason lives in the Southmoreland neighborhood in the 4th District and supports its housing repair program.

While everyone has heard the term "Not In My Back Yard", this presents an unusual case of "Please In My Back Yard". The elegant Southmoreland neighborhood has enjoyed access to free money, and nobody can really blame them for enjoying the opportunity.

But if you spend a little time driving around the old Northeast, or the East side, it's hard to understand why tax dollars should be funding housing repair in such a posh area. The Southmoreland website is a cheery, welcoming place, offering "Up to $10,000 or more matching grants to fix up your house."

Meanwhile, other neighborhoods can't get their weeds cut or their illegal tire dumps cleared.

Southmoreland is fortunate to be on the PIMBY side of the financial seesaw, while others struggle for basic services. Southmoreland doesn't want to share, and they have a brave and articulate councilmember to stand up and fight for the privileges they have enjoyed for over a decade.

Is it a fair fight?

Beer in the Bottoms? Let's Bulldoze the Power & Light District!

Last night, while researching my next homebrew recipe, I came upon a spot of amazingly cool news. In 2009, Kansas City will have another brewery opening up, this time in the West Bottoms. Dead Canary Brewing is a woman-owned and run new brewery, setting up in the West Bottoms down off 12th Street, among the haunted houses and great old brick buildings.

Folks, this could be amazing.

They are setting up Beer Pong and Dodgeball Leagues. They are creating a taproom. They are committed to brewing practices that are green and sustainable. They got started on this journey by brewing naked.

Most importantly, they are creating "high content, high flavor, knock you on yo ass beers." Beers like Cat House Stout - (Dry hopped mint chocolate imperial stout), Local No. 12 - (lemongrass maple strong ale), Speakeasy IPA - (honeysuckle grapefruit IPA), Bathtub Barleywine - (copiously hopped barleywine), and Chickory Rhubarb Imperial Porter.

This could do more for the West Bottoms than any TIF Project ever brewed up in a closed-door meeting between Kay Barnes and Mephistopheles. Really - the West Bottoms could become the new Crossroads X 20, with lots of inexpensive great old buildings around, acres of parking, and reasonable access to the highways.

But, since Wayne Cauthen and the prior City Council have gambled our city's future on the Power & Light District, which is already turning out to be a bit of a flop, I have a radical idea. Let's bulldoze the Power & Light District, and refuse to give any more of our tax dollars to Cordish and their cronies. (Yes, of course they will sue, but it will take years for them to recover anything, and a sensible jury might just rule in our favor if we can introduce evidence of all their broken promises and their racist dress codes.)

Now that we have freed ourselves of the millions upon millions of obligations to out-of-state developers, we can bring in some topsoil and put in the world's most awesome beer garden in all the paved expanse that currently exists down there. Let's be ambitious - let's create something that will make Munich's Oktoberfest seem like an unpopular fraternity's weekend kegger. (We can even, as a nod to our prior mayor, put in a rain garden, just to show we're not angry anymore.)

Then, we take a few million dollars and give them to our local brewers to create the micro-breweries of their dreams on the periphery of our new beer garden. Relocate Boulevard's and its emblematic smokestack downtown. Get 75th Street Brewery to open up a 12th Street Brewery. In a cross-state gesture of goodwill to make up for our outright theft of the 1985 World Series, offer Schlafly a space.

But don't forget the beginners, either! The Kauffman Foundation wants to support entrepreneurship - let them funnel a few million dollars to help ambitious homebrewers make the leap into micro-brewing. And, because cans are so much more recyclable and cheaper to ship than bottles, let the city open up a municipal cannery, offering access to its canning lines for each of the breweries on a cooperative basis - a green infrastructure project that ought to attract funding from every level of government.

As I think we demonstrated at 75th Street Brewery on Monday night, real beer is a big draw. People will come out for something unusual, and they appreciate a good party. Imagine if Kansas City was the undisputed Home of Great Beer. We would have to hire thugs to control the hoards of convention planners! Vacationers would come in year round, just to try the seasonal brews! Hotels chains would pony up their own money to get access to the crowds of tipsy beer-lovers walking around downtown.

Most importantly, it would be awesome.

My point in this flight of fancy is that for the millions of dollars we have blown on a cookie-cutter assemblage of national chain restaurants, we could have had something unique and truly attractive to Kansas Citians and conventions if only we had focused on local businesses and local flavor. This is the sort of impulse that Mayor Funkhouser has pushed with his New Tools initiative. Economic Development does not have to mean sending massive amounts of money to out-of-state developers for massive projects. Let's hope that the Council gets behind the concept and that we see some real Kansas City economic development.

In the meantime, let's raise a toast to Dead Canary Brewing. They might accomplish with beer what politicians have failed to accomplish with hot air and taxpayer dollars.

Is Silly Season Coming to a Close?

Funkhouser is talking about the economic crisis.

Marcason is talking about sewers.

Jolly is talking about red light cameras.

Hermann is looking at budget shortfalls.

Gottstein remains focused on her priorities.

The whole Council is waking up to the horrible mistake they made in extending Cauthen's contract over Funkhouser's smart-with-the-money objections, and giving Cauthen terrible evaluations that will never appear on his resume of fabrications.

The Finance Committee refused to go along with Cauthen's crazed scheme to take all the risk of the eternally-botched Citadel Project.

Meanwhile, Ed Ford is all by himself ranting and muttering darkly about recalls he is too lazy and ineffective to spearhead. (He brings to mind this nifty bit of analysis - "In fact, people who resort to using the threat of recall in Kansas City are announcing in clear tones that they are ignoranuses. They are stating boldly and clearly that they do not know what they are talking about, but they want attention, nonetheless. They are standing on their soapbox and loudly embarrassing themselves, hoping you will watch.")

Back when the Mayor and Council were elected, I thought we had chosen wisely. At times over the past year and three quarters, I've had moments of despair, but the past week or so has given me hope. The Mayor is focused on helping the city weather an economic crisis that Cauthen foolishly ignored, and the Council is actually working on something other than trying to run the Mayor's office (well, except for Ed Ford).

I'm beginning to hope that by spring, our elected officials will be acting more like a well-run student council than a self-indulgent drama club. (Well, except for Ed Ford.)

Furious at the Former Council & Mayor

News is starting to leak out that Kansas City taxpayers are going to get stuck with a $4 million bill to cover bond payments on the Power and Light District. That is $4 million dollars getting diverted to bankers instead of to snow removal or street repair. That's $4 million dollars that ought to be spent on Kansas Citians, instead of institutional bondholders. That is $4 million this year - who knows how much we'll get stuck with in future years, as the economy slows and we realize we're throwing good money to prop up a bad investment?

It's all because of the former City Council and especially the former Mayor, who blew our tax dollars for projections based on sparkles and unicorns.

Do you really want light rail? Do you want a downtown stadium someday? Do you want snow-free streets on the morning after a storm? Do you want sewers that don't flow into Brush Creek and cause fines from the EPA?

Well, too bad. We're spending that money on the Power and Light District, instead. Instead of all those things, we're investing in tax-favored, out-of-town bars and restaurants.

What's Behind the Weirdness?

Why did Jan Marcason go overboard and threaten Sharon Sanders Brooks if she didn't support the anti-volunteer ordinance NOW, as opposed to waiting a week? Why was it so important that the ordinance get passed before people had a chance to read it? It doesn't make sense if Marcason was really only trying to pass the ordinance . . .

Which leads us to the overwhelming question - what WAS going on in that backroom?

Will we ever find out?

Irresponsibility, Cordish, Convention Hotels, and Game Boy Games

A few days ago, I was going to write a piece about the chutzpah of the Cordish Company for trying to prevent light rail from proceeding on most logical route to downtown. Before I got around to writing my thoughts, though, I saw that Mark Forsythe had already written a piece that caught the spirit of what I was thinking, and did it more gracefully and subtly than I could have. One sentence in particular stands out as an effective, thought-provoking analysis of the real game being played here - "Isn't the real issue the kind of people Cordish fears that public transit will bring to the district?" Go read the whole thing.

To broaden Mark's points a little, though, this little flap is typical of the kind of power plays being played by Kansas City's monied interests. Cordish and the Sprint Center CHOSE to put their project right on Grand, and talked us out of millions and millions of tax dollars to do it. We put our faith in their ability to deliver a solid business plan - after all, they're smart, professional business people, right? Everybody who knew anything about Kansas City knew that we were looking at developing light rail down Grand. If they were truly foolish enough to create a business plan that hinges on Kansas City shunning light rail, well, cry me a river. We might as well shut down the Power and White District now, because the people running it must be fools.

In another example of taxpayers being looked at to bail out bad business decisions, a lot of people are now claiming that we need to divert tax dollars from our schools and streets and police officers so that we can build a big, fancy convention hotel. What?!?! When they built the convention center, did they or did they not anticipate this "need"? If they did, then they should have included it in their plans in the first place, and budgeted for it. If they didn't, and it really is necessary, well, too bad, so sad. You screwed up, and I don't want to give you any more money after you've demonstrated you won't spend it wisely. What will you "need" next?

When my son was very young, he wanted to buy a Gameboy. He saved his nickels and dimes, and did extra chores, until he had the money. I asked him about how much games would cost him, and he had prepared a list of games he wanted to buy and how much they cost. He had planned out how he would continue to save for each game, and how long he expected it to take. The kid had a business plan, and it didn't hinge on his old man stepping in and bailing him out.

Is it too much to ask our development community to show the same level of responsibility?

Blogger (and Commenter and Lurker) Meet-up

This evening a couple dozen bloggers and friends will be getting their drink on at the Flying Saucer, slamming TIF-subsidized beers and dressing like proper white people. Commenters and readers are most definitely welcome to join in the fun, so long as they dress the way that the Cordish Company thinks they should.

In the spirit of lazy blogging, I'll just cut and paste My Spyderweb's version of the notice:

This is it! Put the word out!!!
Flying Saucer
13th & Walnut
Kansas City, Mo

Monday 6/23, 5pm, because Monday is pint night and all drafts cost $2.75.

The KC Power & Light district parking is within the same building complex and is only $2 with validation...or lately you have to pay $2 to a dude right when you go into the garage. The lot across the street is a flat $5 if you park there after 5PM.

Cordish Complaining?

I was shocked that Cordish, the TIF Pig behind the KC Live district, has the gall to complain about festival licenses being issued to other districts in the city to allow outdoor drinking. They claim they were "promised" that the city wouldn't allow such competition.

Were those promises made in the same meetings when Cordish promised to have the district ready in the Fall of '07?

Just wondering . . .

Liberty Memorial Board Member Blows Smoke

I just about choked on my coffee this morning when I saw Tim Kristl, of all people, complaining about the budget cuts to Liberty Memorial and announcing that they are cutting the steam off on the Eternal Flame atop the phallus. Tim Kristl.

Tim Kristl, for those who don't know, is a symbol of city politics gone wrong. He was the punch line in the sick joke that was the Semler appointment - despite her flaws, nobody could say that she was the worst Parks Board appointee ever, because that title belongs to Mr. Kristl, and that trophy won't travel.

Mr. Kristl, a confidant of the former mayor, was one of the main paths to developer riches during the prior administration. Now that those developer incentives are draining the city treasury, the last person who ought to be complaining is Tim Kristl.

They say the birds will eventually come home to roost. Maybe they can roost on the flameless top of Liberty Memorial.

This Is What I Voted For

Despite numerous distractions along the way, I've never lost faith in the fundamental premise of why I voted for Mayor Funkhouser. It's paying off.

His handling of the budget mess has been masterful. First, he didn't play the "hide the cards" game of his predecessor. As soon as he got the structurally imbalanced budget from Wayne "I fixed the imbalance on my resume" Cauthen, he shared it with the rest of the Council, in a good faith effort to allow them to be fully informed and up to speed.

Then, he called on Cauthen to propose how to eliminate the $78 million imbalance immediately. Of course, Cauthen groused about it and proposed an unworkably harsh budget, but it got everyone's attention. Business as usual is dead, and everyone knows it.

Now, it's time for hard choices. Funk has the city talking about them - facing financial reality as the economic picture turns dark. He's come up with a way to get 20 more cops, focus on basic services, and improve our codes enforcement, but it's not easy, and it's not ribbon-cutting that is going to get us there.

Funk promised to work toward a city that works for regular folks. I look at his budget, and I think he's leading us toward that goal. Given the enormous stakes (Moody's has changed our credit outlook from stable to negative), I'm happy that we've moved past the "Don't Tax, but Spend Lavishly" atmosphere celebrated by the TIF pigs running the show for the past several years.

This is the hard work of governing, and Funkhouser has rolled up his sleeves. Thank you, Kansas City, for electing him.

Briarcliff TIF Pig Kristl Abuses His Seat on the Parks Commission

Tim Kristl is notorious for his, umm, moral flexibility in juggling many roles to benefit himself and his clients at the expense of Kansas Citians. Not surprisingly, he is one of the biggest TIF pigs behind the "Briarcliff TIF Boondoggle", the absolute nadir of Kay Barnes' free-spending cronyism.

In today's Kansas City Star, Kristl abused his seat on the Kansas City Parks Commission to lash out at Funkhouser once again. Tim, we understand that you have been feeding at the TIF trough for years, and that you fear that Funkhouser is going to bring some sanity to a system which has made you insanely wealthy. We understand how frightened you must be, knowing that the TIF audit Kay Barnes and Al Brooks are hiding is going to expose you and your cohorts when it finally comes to light. We understand that your history of seeking money from boards you are serving on has lowered your standards of personal behavior.

But get this straight, Mr. Kristl. Your duty as a member of the Parks & Recreation Board of Commissioners is "To improve the quality of life by providing recreational, leisure and aesthetic opportunities for all citizens and by conserving and enhancing the environment." Your duty does not include lying about what Funkhouser's audits have accomplished. Your duty does not include taking advantage of your position to try to attack the man who will be ending your ride on the gravy train.

One of the best things about seeing Funkhouser win this election will be watching him drive snakes like Tim Kristl from positions of influence and back under the rocks where they belong.

Is the Barnes TIF Tax-Give-Away Train About to Leave the Station?

One of the fascinating aspects of this mayoral contest is the inability of Mayor Kay Barnes to cope with the fact that she is finished. She is twisted up inside about the fact that Mark Funkhouser is likely to win, instead of her chosen Mayor pro tem, Alvin Brooks. She's ranting to anyone who will listen, and rumor has it that she is willing to say or do absolutely anything to prevent a new voice in City Hall.

Tony's Kansas City reports on what must have been one of the oddest scenes in Kansas City's strange political history. Kay Barnes held a secret gathering of "her people" to warn them that the gravy train for TIF pigs would end if Mark Funkhouser wins the election. Tony reports (apparently via the KC Prime Buzz, where the Star puts the material it doesn't believe Star subscribers deserve),

Mayor Kay Barnes endorsed Alvin Brooks for mayor at a private meeting she held last Thursday with a select group of KC business leaders.

Barnes secretively arranged the 8 a.m. breakfast at the Downtown Marriott, which Brooks attended.

In her invitation on Feb. 28 to about two dozen people, Barnes wrote:

"I wish to discuss with you my thoughts on the general election which will be held only 27 days from now. I am concerned that the progress we have achieved, in large part because of your efforts, is now in jeopardy."

Among the persons invited by Barnes: Lawyers Herb Kohn, Jack Craft, David Fenley, Jerry Riffel, Michael T. White and Mike Burke.

What kind of panicked insanity is this? Each of those lawyers is a TIF tax give-away lawyer - each of those lawyers makes hundreds of thousands of dollars by shifting tax dollars from our potholes and police into the pockets of wealthy developers.

Why are all these TIF tax give-away lawyers so excited to have Alvin Brooks step into Barnes' shoes? Because Alvin Brooks, in his 8 years as council person and Mayor pro tem, has never, ever voted against a single TIF give-away. Not a single one. Every time that some developer came to him and said "Rather than having tax money go toward helping Kansas Citians, I want you to give that money to me," Alvin was there to say "Yes". When 88% of tax dollars were going to the wealthiest districts, Alvin was there to ignore the East side in favor of the wealthy.

Did Alvin Brooks stand up for the poor when the Briarcliff zillionaires wanted tax dollars to line their pockets? Of course not. Instead, he stood up at breakfast with Kay to ask those TIF lawyers for campaign contributions.

Springsteen Next Weekend - a TIF Alternative?

In my last TIF post, I was pretty negative. In my heart of hearts, though, I'm a positive person, looking for answers to society's problems, and hoping to leave this world a little better for my time here.

So, today, I offer up my alternative to TIF. My only request is that you erect a huge statue of me after I'm gone.

First, let's focus on what we all want. We all want a thriving, interesting, active downtown. We all want good jobs downtown. We all want people to use public transportation. We all want to help the homeless (actually, that's a lie - we all say we want to help the homeless, but many just want them to disappear). We all want our basic services, such as police protection and snow removal, funded.

These are all good things.

Unfortunately, someone in Kansas City's past convinced us that the way to get these things is to give tax money to real estate developers and lawyers. I don't mean to cast blame, but I distinctly recall that the first person to describe TIF to me was Jim Glover. While Jim Glover is certainly an extremely handsome man, he is not the sort to chair the social committee. The fact that Jim was seduced by the charisma of developers and real estate lawyers is where we made our first wrong turn on our path to a lively, thriving, exciting downtown.

With a logic that baffles me, our fine city has decided that the best way to get a fun and lively downtown scene is to funnel our tax dollars to developers and their lawyers. The result is that we are going to be spending $79 million this year on TIF plans, and their most visible success is relocating a lot of IRS people from Kansas City to Kansas City.

Do you realize how much money $79 million is?!?!?! And what we could do with that money to give us a thriving, cool downtown?! And I'm not talking about some dim, distant day when the Penguins finally give up on Pittsburgh - my plan could start next weekend! I guarantee that my plan would have an impact immediately.

Here it is - there are 52 weekends in a year. Each weekend, we're going to spend a MILLION FREAKING DOLLARS on a kick-ass party downtown. I checked the Gomer's ads, and we can get 12 packs of Boulevard (gotta support the locals!) for $10.48, so, doing the math, we can get a million bottles of Boulevard to hand out FOR FREE - that's two and a little extra for every man, woman and child in Kansas City - for $833,333. The extra $166,666 we'll use to get Bruce Springsteen and a whole bunch of porta-potties.

And the thing is, we could do this EVERY WEEKEND, FOR FREE, and WE'D STILL BE SAVING $27 MILLION off what we're paying real estate developers to bring us IRS agents. IRS agents, or rock stars - what kind of choice is that?

Think of the spin-off benefits! People would not want to drive downtown and park, and, with all that beer flowing, they shouldn't drive home. Light rail would be jam packed, as would the Max and every other form of public transportation available. The businesses downtown would make a retail killing - pretzels, pizza, and tasteless t-shirts are some products with known appeal to this sort of crowd. And we could tax everything! Heck, the homeless could even recycle the bottles and make money off them, too!

Now, if we threw a million dollar party every single weekend, can you imagine how many people would come here every weekend, and how many would find a way to stay here? Omaha, St. Louis, Wichita, Chicago, Minneapolis, Denver - they'd all be ghost towns on the weekends.

Remember, this is still $27 million LESS than what we're paying the developers and their lawyers. You'd have to pay for my statue out of that, but you could use the rest for other stuff.

Maybe you'd want to take the 8 solid blocks on the north side of downtown that has been flattened by - umm, yeah, civic-minded real estate developers again - and put up a whole bunch of Butler buildings (local industry again) and stock them with Nintendo Wiis and pinball games, that people could play for FREE. Maybe we could permanently shut down some of the roads that the city has closed for construction and have the coolest go-cart tracks ever through downtown. Maybe we could dig another huge hole or two, and have some awesome moto-cross space!!

The mind boggles when you have $79 million of taxpayer money to play with. Maybe, you'd just want to have the parties, and use the extra $27 million for basic services, like police and snow removal. It's your money - it ought to be your choice.

TIF and Tax Abatement

(Updated and bumped: Joe Miller of Kansas City Soil does a great job in this post of excerpting a good article by the Star on just how badly TIF is hurting this city.)

A commenter asks: What is the difference between TIFF and tax abatement. Does KC use both to spur development? Do different parts of gov. approve each?

TIF is a form of tax abatement. When used properly, it's kind of cool. Let's say you have an old, decrepit buidling you want to knock down and put an office building up in its place, that will bring 100 new jobs to the area. Unfortunately, the dollars just don't quite add up. By the time you add in the increased property taxes, parking, and some streetscape improvements, etc., you'd wind up losing money on the deal. So, no new jobs, and same decrepit building. And the increased city revenue that might have come from the increased property value and all that economic activity won't ever happen.

Well, TIF might give you an extra income stream. Under TIF, the city comes and says, okay, if you build it, we will take the money you would have to pay in increased property tax, and let you spend it on the project. And we'll let half the local sales taxes, earnings taxes, utility taxes, etc. go toward making it happen. On top of that, if it's in an area the state government really wants to develop, we'll kick in state taxes, including the income tax from the new employees.

Suddenly, there's a whole lot more money to make the project happen. And, theoretically, it's no real loss in taxes, because the project would not have happened without the help.

The problem is that developers understand that this money is available without much control. Nobody really wants to raise a fuss about it - the people involved in the process, from the EDC, to the city government, and pretty much on down the line, all have a bias in favor of getting the deal done. Indeed, the organization that handles the money on these projects is the same organization that is supposed to recommend whether to implement the plans - and is a subset of the Economic Development Corporation of Kansas City. Please note that the name of the organization is not the "Responsible Watchdog for Tax Dollars Corporation". Similarly, the city council gets campaign donations from the same developers, lawyers and construction companies who have a strong bias in favor of these projects.

Economic development sounds progressive and positive. Indeed, economic development IS progressive and positive, but cutting the city and schools who need tax revenue is not. That's what TIF does - in fact, it does a little worse than that, because it increases the services the city needs to deliver, without adding to the tax base to pay for those services. The next time you want to complain about a pothole on Troost, think about the smooth, manicured roads at Briarcliff that the BMWs and Lexi are gliding over, while the tax dollars generated there go to line the pockets of the developers.

Now, beyond TIF, there are a bunch of other forms of tax abatement. Under RSMo Chapter 353, there is a state tax abatement opportunity, similar to TIF. Kansas City's Planned Industrial Expansion Authority hands out tax abatement like the Secret Santa used to hand out hundred dollar bills. To be honest, I don't even know all the different forms of tax abatement and governmental support available to those who have money and want to make much more of it.

In a nutshell, if you want to make money in commercial real estate Kansas City, you'd be a complete jackass to pay your fair share to support city services or our schools. Instead, hire a competent real estate development lawyer, and make more money. But, to answer your questions, my dear commenter, TIF is a form of tax abatement, Kansas City uses many forms of tax abatement to "spur development" (and help developers get wealthier), and the approval policies for each form of tax abatement differ enough that you should hire a real estate development lawyer to guide you through the gilded, byzantine world of taxpayer financing.