Tax incentives for a rich guy hotel by Kansas City’s Kauffman Center still a bad idea
The search for City Hall bennies has been on pandemic pause during the year of COVID-19. But it, too, is starting again, making true oversight crucial at 12th and Oak.
Already there are suggestions that backers of a luxury hotel project near the Kauffman Center for the Performing Arts are back to lobbying members of the City Council. The Neighborhood Planning and Development Committee is thinking about a new hearing on the proposal, perhaps later this month.
New restrictions on development incentives go into effect June 25. Perhaps that explains the rush to reconsider the PAC hotel project.
The $63 million plan first surfaced more than three years ago, and was rightly seen as going too far even for those who usually support incentive excesses. Why should taxpayers provide incentives for a hotel designed to cater to rich people, at $500 or $600 a night?
Even the Tax Increment Financing Commission said no.
That hasn’t stopped the project’s developers, who argued in March that development projects “need a break to get established.”
In February, Mayor Quinton Lucas proposed a “super board” to provide one single review of all incentives for private projects. Right now, those goodies are reviewed by an alphabet soup of various agencies.
As it turns out, though, consolidating agencies like the Port Authority and the TIF Commission ran afoul of state law. In April, Lucas offered a new plan.
The idea: Establish the five-member super board, then appoint those same five people to every relevant incentive board or commission in the city. That would leave the individual agencies intact, but give real power to five mayoral appointees.
The plan remains bottled up in committee. A full council vote could come later this year.
A super board with actual power remains a good idea. Kansas City is plagued by mysterious boards handing out millions in tax abatements and other benefits to private companies, usually with little public scrutiny.
Ever heard of the LCRA, PIEA, EEZ, IDA, EDC, or the EDCLC? Probably not. But the boards of these groups serve as gatekeepers to divert money into the pockets of connected developers for their favored projects.
The long list of alternatives provokes “incentive shopping,” where developers who lose in one venue seek a friendlier reception somewhere else. Eventually, they find someone to say yes.
Developers of the luxury hotel oppose the super board, of course. “We believe such a system would exacerbate the prevailing anti-developer echo chamber at City Hall and will further cause our city to stagnate,” developer Eric Holtze wrote in this newspaper in March.
There’s a reason for that echo.
The PAC hotel remains the wrong project at the wrong time. Kansas City is in a battle over funding for its police department. Homelessness and affordable housing remain critical concerns, and tax revenues are wildly inconsistent.
The new, more restrictive incentive policy needs time to work.
Kansas City is just beginning to understand the impact COVID-19 has had on its budget, and the city’s health.
Now is not the time to lavish incentives on developers, particularly for projects designed to cater to the wealthy. And if there’s demand for another luxury hotel, why do developers need help from taxpayers?
We urge the City Council to wait and see how the city recovers from a pandemic. Let’s set up a super board with real authority to consider handouts. Then the city can pursue a reasonable, transparent effort to grow its economy for all its residents.
