Kansas City Council Caps Tax Incentives, Approves Community Improvement District For Two Hotels

Oct 6, 2016

A busy day for Kansas City councilmembers ended months of debate by cutting back the city’s economic development incentives while awarding money to two hotel projects.

Just two weeks ago, the council had deadlocked on the incentives measure and decided to delay a vote. On Thursday, the tide had shifted. The council voted 9-4 to approve the plan.

The ordinance caps tax incentives at 75 percent of a projects cost in most case. The exceptions include distressed areas and projects that do well on the AdvanceKC scorecard, providing things like high-paying jobs.

While the measure picked up support, some councilmembers, including Kansas City Mayor Sly James, still objected to it. Among other things, he had concerns about the Shared Success Fund, which would target some of the developers’ payments in lieu of taxes to distressed areas.

“The Shared Sucess Fund has not been sufficiently debated,” said James, pointing to reservations expressed by the Kansas City Public Schools and other taxing jurisdictions about the fund.

Councilwoman Katheryn Shields said the ordinance might not be perfect but called it an important first step.

“We’ve reached the point, where we’ve come together in agreement on most points,” said Shields. “What most people are saying is ‘We agree with this ordinance. We really want to see how you’re going to implement it.”

After passing that, the council turned to the question of whether to declare the InterContinental Hotel blighted. The possibility of giving that designation to one of premier hotels on the upscale Country Club had caused an uproar.

The issue? The state of Missouri’s legal definition of blight versus what most people consider blighted, which tends to be more rundown areas and vacant houses than luxury hotels.

The InterContinental sought the designation so it could become a Community Improvement District and charge a one-cent sales tax. That money would raise about $5 million and pay for part of $16 million in renovations at the hotel.

Councilman Lee Barnes introduced an amendment, seeking to bridge the two definitions of blight. As part of the amendment, the InterContinental Hotel agreed to hire local workers and give $250,000 to a program to help repair senior housing.

“While there’s a lot of concern about how can the InterContinental be blighted, legally, it is,” says Councilwoman Alissia Canady, “But they are also willing to acknowledge that. They’re willing to do something about the real blight we’re concerned about in Kansas City.”

The amended measure seemed to allay most councilmembers' concerns. The ordinance passed 11-2.

The council also approved, unanimously this time, a CID for the downtown Marriott-Muehlebach. That one-cent sales tax would raise half of the money for $33 million in renovations to the 980 guest rooms.

This proposal had been received as a whole more favorably than the one for the Intercontinental. Councilman Quinton Lucas said this project was different because of what the city was being offered, 200 parking spaces and a hotel room agreement for conventions.

“If you offer us a lot of stuff, if you’re going to work with us to help us bring conventions, to help us build our downtown, to help us make Kansas City better, then we’d love to talk to you,” said Lucas.

The Kansas City Council also voted to fund a proposal to establish a three day arts festival in Swope Parks. Mayor Sly James championed using nearly $250,000 from the Neighborhood Tourism Fund as seed money. There were minor objections that the money was intended to be used in neighborhoods and not on a citywide event. It passed 11-2.

Maria Carter is the News Director at KCUR 89.3.