Critics oppose Kansas City helping pay for competing KCI parking. Why is it moving forward?

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Kansas City should not spend millions of dollars subsidizing a private parking lot that will compete with the city’s own airport parking operations, critics both inside and outside City Hall say.

Yet the city is well on its way to doing just that this week. A city commission that greenlights tax abatements will consider a Northland developer’s request on Friday for more than $16 million in public assistance that would help build a privately owned, 4,000-space, covered parking lot near Kansas City International Airport.

Not only would the lot compete with the city’s own airport parking operations, but $5.5 million of that property tax handout would go to build two roundabouts on the airport’s main access road. Roundabouts that city officials concede are not needed for anything but to make it easier for customers to access the private lot and other retail businesses that the developer hopes to attract, including fast food restaurants, hotels and a convenience store.

“I think when we look at what types of projects we should incentivize, it should be benefiting the residents of Kansas City, not benefiting tourists, especially not benefiting things like incentivizing fast food restaurants, parking lots, or any type of other things like gas stations,” 6th District Councilman Johnathan Duncan said in August before a council majority moved to push Richard Chaves Jr.’s development project forward.

He and others have also questioned the public process that’s pushed the project ahead to this point, as the council parted with its usual practices of requiring that projects getting tax increment financing have a TIF plan in place before receiving TIF money.

Yet that is essentially what happened with this project, as the council voted to advance the Chaves development $700,000 before he had even filed an application for TIF funding. Officials said it was essentially a loan.

The day after the vote, Northland activist Jaz Hays, went on X, the social media platform formerly known as Twitter, to say the project was not worthy of a taxpayer subsidy and implied that Chaves and his supporters had bought council support with $108,000 in campaign contributions.

“Hey, if the city is in the business of issuing loans, can regular people at least get them? If me and my neighbors want to build or buy cooperative housing, will the city spot us $700k,” Hays wrote.

Neither Chaves nor the attorney representing him on this project responded to requests for comment.

Lacked access

Chaves has been working on the parking lot plan and adjacent commercial development since August 2019, when the investment group he heads bought 58 acres immediately north of Northwest Cookingham Road and east of Interstate 29.

The weed-covered lot has been vacant for years. Adjoining it is the site of a decades-old office building that the Chaves group also owns, which was built where Bonnie and Clyde shot it out with police back in 1933.

“Thirteen lawmen surrounded them but the gang shot their way out and escaped,” a historical marker states.

Chaves, however, was not lucky enough to escape the hassle that developing the site would entail because the site was hard to get to, and the process of getting help from the city to add a point of access proved tricky.

Currently, the only way to drive to those 54 acres is via a stub of a road that opens onto Ambassador Drive, which provides access to the office building.

Chaves told city officials that north-south Ambassador was suitable, if all he wanted to do was build his company’s Peachy Airport Parking lot for air travelers to leave their cars while they were away.

But he needed road access from east-west Cookingham so vehicle traffic can get to the fast food joints, hotels and other businesses that may be built there.

And without being able to assure those potential tenants or buyers of that access in the future, he can’t secure their commitments, which are necessary to get the project to work.

“The conversations say, ‘OK, well, where’s the access?’” Chaves told a council committee in August. “And once I say it hasn’t been done yet, the conversation ends.”

His original designs in 2020 showed a planned access road off Cookingham, but state and local officials said the road would pose a safety hazard because it would be too close to the ramps on and off I-29.

Someone would have to build one or two roundabouts, but the state, which owns the road, was not about to do it for a single developer, as traffic numbers didn’t justify it.

So when the city finally signed off on his now-$106 million development plan in 2022, it required that there be two traffic roundabouts, one on either side of the interstate. But the agreement didn’t make clear who would pay for them.

‘Positive move’

It wasn’t revealed until a year later, as Chaves prepared to break ground for the parking lot, that he had no intention of paying for the roundabouts on his own.

Taxpayers would have to foot the bill.

City Aviation Director Pat Klein objected, asking City Council members in an email why taxpayers should pay for roundabouts for a parking lot that would hurt the airport’s bottom line.

Parking generates roughly $55 million a year for KCI, the now-retired Klein wrote, “and having the City participate in funding improvements which will compete with our parking assets doesn’t seem the best use of City funds.”

But the council went ahead anyway, citing the overall economic benefits of the parking lot development. Teresa Loar, who was nearing the end of her term representing a Northland district, said the Chaves investors deserved the city’s help.

“They have just been piled on and piled on with stuff, and they’re trying to make Kansas City a better place,” she said at a May committee meeting.

At the groundbreaking ceremony two days before the council instructed the city manager to find a way to pay for the roundabouts, former Mayor Sly James called the Chaves development “a positive move for the Northland and all of Kansas City because it acts as a direct gateway to the new airport terminal.”

He said it will provide jobs, tax revenue and needed services for both travelers and local residents in a growing part of town.

TIF money

To minimize one of Klein’s concerns, the city manager’s office proposed a funding plan this summer that does not divert the city’s limited funds for fixing existing roads to a project benefiting a single developer.

Instead, the roundabouts would be paid for out of the increased property taxes that the fully developed property would generate compared to what owner Kansas City Airport Parking LLC now pays into the treasuries of the city and other local taxing districts.

Whether that incremental amount of money can be used to pay for the roundabouts and other infrastructure costs at the development is the question that the city’s Tax Increment Financing Commission will be taking up on Friday morning.

What makes this project unusual and has raised criticism even on the City Council is that the council committed $700,000 to the roundabout construction on the assumption that the TIF plan will be approved.

That’s not how it’s normally done. Developers don’t normally get TIF money until their TIF plans are approved.

But Chaves asked for an exception. The appropriation will pay for costs associated with the curb cuts to access the site, which the Missouri Department of Transportation wanted in place before approving construction of the roundabouts.

And the roundabouts are key to the TIF plan.

“It’s a chicken and egg thing,” Chaves’ attorney, Patricia Jensen, said at a council committee on Aug. 23..

Mayor Quinton Lucas and some others were not comfortable that day with the process, if for some reason the TIF plan does not go through.

“It feels like we’re putting the cart before the horse,” Councilman Johnathan Duncan said.

Finance Director Tammy Queen agreed.

“If the development does not proceed, there will be a hole in the city’s budget that will have to be filled somewhere,” she said.

But based on the assurance that the city would be paid back no matter what due to the terms of the city’s agreement with the Chaves group, 10 council members voted for the appropriation the following day.

Without commenting on his reasons, Councilman Eric Bunch joined Duncan in voting no.

The TIF Commission, which is made up of elected officials and community members appointed by the mayor, is scheduled to evaluate the Chaves TIF plan at its 10 a.m. meeting on Friday. One condition of TIF tax breaks is a determination that the project would not happen without them. Commission staff have recommended approval.

A public hearing on the plan is scheduled for next month. But the council will make the final decision.