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KC referendum seeks cap on development tax breaks

KANSAS CITY, Mo. -- A citizens petition is asking voters to put a cap on tax incentives for development projects in some areas.

Some believe it may impact growth around downtown, one of the areas targeted by the proposal.

The chair of the city's finance committee says construction of the new convention center hotel probably would not be happening if the proposed incentive cap was law at the time.

That's because creating projects downtown and in the Crossroads, where the infrastructure is nearly 100 years old, requires a big investment to update to modern standards.

In addition to city incentives, development deals often include tax abatements from school districts, the library and the county.

The petition wants voters to limit tax breaks from these other jurisdictions, so that developers would have to pay at least half of the taxes ordinarily due to them.

"Simply saying you can only have 50 percent and no more may just mean that a project doesn’t happen," Scott Wagner, 1st district city councilman said. "This is actually a nice experiment, if it actually passes, because then we can see what level of interest people will have in investing in Kansas City or doing developments."

The push comes after BNIM, an architecture firm, abandoned plans to build a new headquarters in the Crossroads when opponents objected to 100 percent tax abatements from the school district and library, as part of the deal.

Supporters of an incentive cap believe such large tax breaks should be restricted to only areas of greatest need, like blighted neighborhoods on the east side.

Wagner said the petitioners have followed the proper procedure to seek a referendum on development tax incentives.

The finance committee approved placing the question before voters in August.

The full city council will consider the petition next week.

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