Petition aims to cut tax breaks Kansas City gives for new developments

KANSAS CITY, Mo. -- Kansas City's downtown continues to grow. But the controversy over many tax incentives used to lure new businesses here is also growing.

Tucked amid high rises in downtown Kansas City at 9th and Broadway is a vacant lot that could soon be home to a new luxury Hyatt hotel.

"We started monitoring projects and began to realize something more needed to be done," said Jan Parks, spokesperson for the Coalition for Kansas City Economic Development Reform.

The coalition is concerned because of how big tax breaks projects are getting.

According to the Hyatt proposal, the hotel could be essentially tax free for 10 years and get breaks for another five years, costing the city more than $8 million.

"There's just something about the fact you're taking money away from average citizens to put luxury items in, like hotels and upscale apartments," Parks said.

The problem is that all the money developers and new businesses aren't paying in taxes short changes groups that benefit from property tax revenue.

"If everybody is getting tax breaks all through downtown, then all the sudden the Kansas City School District starts to say, 'Wait a second. We haven't seen an increase in property tax revenues, at least in this area, an important part of the city, since 1997.' And that's a real issue," Kansas City councilman Quinton Lucas said.

That's why two years ago, Lucas helped pass an ordinance to cap tax breaks at 75 percent unless the development was going into a distressed area.

"How can we make it so they see new money coming in on projects from day one? Even if it's not a lot, at least it's something," Lucas said.

Although the ordinance has helped, developers are finding new ways to skirt it. That hotel proposed at 9th and Broadway -- the parking lot it's going to cover was deemed "blighted," making it eligible for bigger tax breaks. But other parts of town are still left out.

"Go figure, right? It's blighted, and it's in this distressed census tract. I think there are a lot of Kansas Citians who are waking up today in neighborhoods that might not be quite as a nice as 9th and Broadway," Lucas said.

So the Coalition for Economic Development reform is fighting back.

It's now gained enough petition signatures to force a public vote on limiting tax breaks to 50 percent.

"We need to hit a balance in Kansas City, and we're not there yet," Lucas said.

This Wednesday, the city's finance and governance committee will review the petition for capping tax incentives and consider putting it on the August 2019 ballot.