The Kansas City Council on Thursday unanimously rejected an incentive package for a major redevelopment of the former Katz drugstore building in Westport.
Council members appeared ready to approve a scaled-down version of incentives, limiting a tax abatement from 15 years to 10 years. But Katheryn Shields, who represents the 4th District, said the project was nonviable after an amendment was approved that would limit incentives, require public parking access and set aside some units for affordable housing.
She presented the luxury apartment project as one of historic preservation. The Katz building with the adjoining clock tower is hailed as an historic landmark, owing to its distinctive Style Moderne architecture.
“They aren’t going to save it,” Shields said of the developers. “Not with this amendment.”
Lux Living, based in St. Louis, proposed building a six-story, 192-unit apartment building on top of underground parking behind the Katz building at Westport Road and Main Street. The overall cost of the project was estimated at $37.6 million.
Council member Kevin O’Neill, who represents a Northland district, said his problem wasn’t with historic preservation.
“I don’t like the project,” he said. “This is about luxury apartments and we keep getting into historic preservation.”
O’Neill noted that the property lies along the route of the KC Streetcar, where speculators have bought up property in anticipation of a Midtown building boom. He has previously criticized adding incentives into an area that’s already primed to benefit greatly from government investments.
“To me, this is about the project, not the historic preservation,” he said. “And I don’t like being lectured about how badly I’m going to feel after this vote. Because I won’t.”
Fellow Northland Council member Teresa Loar said the council needed to consider the needs of both the wealthy and the poor when making decisions.
“We have to do a balancing act here,” she said. “And we have spent the last six months dealing with the poor. And we have spent a lot of money dealing with that issue.
“Do we need this? I mean, people need places to live whether you’re really wealthy or you don’t have any money. But it’s the wealthy people that provide those dollars that come to help us take care of the poor folks.”
Loar said incentive packages like the one sought from Lux Living were crucial to growing Kansas City’s population and tax base.
“This is what this city is about,” she said. “We can’t just ignore this stuff and think our city is going to grow, because it won’t.”
Lux Living officials could not immediately be reached for comment on Thursday.
Shields pushed for more incentives and fewer requirements on the builder, who she said was saving a historic structure.
“Doing historic preservation is a very difficult thing,” she said. “And it is not going to happen in this city if we do not provide the support and the atmosphere for that to be happening.”
An ordinance sponsored by Shields originally contemplated giving the developer a 25-year break on the property taxes it would pay if the project went forward without other incentives. The redevelopment would have 75% of its property tax bill abated for 10 years and then 37.5% for the next 15 years.
That was more than the 10-year, 75% tax abatement recommended by an independent consultant who studied the proposal.
Ultimately, the Kansas City Neighborhood, Planning and Development Committee settled on a compromise last week.
Instead of the 25-year tax abatement sought by Lux Living, it passed a 15-year plan that grants a 75% abatement for 10 years, followed by a five-year period where the abatement level drops to 50%. And after 10 years, the project’s financial performance could be re-evaluated to see if continued tax breaks are necessary.
Additions to the proposal on Thursday included a set aside of affordable housing and a requirement that the developer make some parking available to the public.
Shields described those as nonstarters. Some considered sending the project back to committee for further evaluation, but after checking with the developer’s attorney during the meeting, Shields advised the council to kill the project.
Her fellow 4th District Council member Eric Bunch, who offered that amendment, could not immediately be reached for comment.
Last week, Kansas City Public Schools objected to the incentive request because the developer wanted more tax breaks than the independent analysis from S.B. Friedman recommended.
The school district is a frequent critic of tax breaks for development because most developments that get incentives occur within its borders. Schools in Missouri rely on local property taxes as a key part of their budgets.
In a statement, schools superintendent Mark Bedell said the district supported the 10-year abatement period suggested by the independent consultant.
“And we applaud our City Council members who did not give in to the unreasonable ask for more,” his statement said. “As we continue to emphasize, over-incentivizing projects is an inappropriate practice that has had Kansas City’s kids paying the price for too long. We look forward to continued collaboration along the way in these conversations and decisions.”
Council member Melissa Robinson, who represents the east side, said affordable housing was a top priority for the city. And she criticized the idea of taking funds away from the school district, which serves predominantly poor and minority students.
“This is about priorities,” she said. “This is about saying that we as a city have to have a community benefit. We have to address our most deepest challenges.”