This project isn't just about rental units, either...it's about 60 or so new residents in new units, much-needed parking and retail.  It's not like someone is asking for a handout to build rental units.  If the numbers don't work out, fine, but Setien needs to adhere to due process, hear out both sides, look at the facts and then make a decision. Without grandstanding or pissing off the developers.

Not every project needs or should have incentives, but that's the PIEA's call.  Their responsibility is to evaluate and recommend proposals, right?  Every proposal they get can be viewed by someone as a waste of time and expense, but if you don't ask, then you don't get and they need to evaluate each and every proposal separately and on it's own merit, not just because they have a slanted view of blighted rental units in the urban core.

exactly.

From what I can tell, Setien was a real dick to the developers.

If our goal is to run off any and all the developers in this city, we are well on our way. 

Regardless of whether we think they need incentives or not, we should be welcoming and try to work with the only people that are going to help make KCMO a more dense and growing city again.

I don’t know if incentives are needed for this project or not, but they are NOT handing this right in the least.

I hope they go across the street and do the project in KCK now.

The funkhouser way of dealing with the evil developers is going to totally screw up this city and it will take years to heal the wounds and rebuild bridges.

Calm down.  They can still go to CPC and the City Council and get their handouts that way.

I don't care how they get their "handouts" and they may not even need them.

I'm saying that the city needs to treat these people with a bit more respect and at least listen to what they have to present and try to take in all the facts and make an honest decision based on those facts.

These developers are out to make money sure, but if you think they are milking a cow, you are freaking nuts.

Most projects can’t get funding with 10-15 percent “profit” (an arbitrary label) and these guys are trying to do it with 7-9% with incentives.  Like they said, it will not happen with 4% and you will get another fried chicken place instead of a high quality, higher density project that will no doubt add more retail and residential activity to the urban core of KCMO.

I just hope they know what they are doing or you won’t even have developers trying.  I think we are already beyond that point though.

I think you and I disagree on the role of incentives in development, but I agree with you here. Its just as frustrating to see an administration reject projects outright as it is to see an administration approve projects outright. The city should be working with developers. If the numbers don't work, work together to make them work. Find common ground. Be proactive as a city to find solutions that make financial sense. I'm pretty frustrated that Funkhouser seems to be replacing the rubber stamp with a brick wall. Just because the city needs reform in its incentive policy doesn't mean it should abandon its incentive policy.

Excellent points - thanks for some sanity. The entire point of having incentives is to support projects that the City's own plans say it wants. In this case, more density, more streetfront retail, hidden parking, etc. It's precisely what this corridor needs more of. But if the City's own boards won't follow-through then we can expect more crappy fast-food outlets, used car lots and thrift stores. That's assuming we get anything at all - it will likely just lead to more empty lots and more blight.

I forgot to mention that Ed Wolf was in attendance at the PIEA meeting.  He made a very noticable entrance after the Board meeting began, ensuring everyone saw him.  He said nothing, not testifying, but it was clear that he was there to ensure that the Funky Seven (the 7 new board members) voted the way they were told.

This is exactly the type of development the entire urban core needs...mixed use, street level retail with hidden parking.  And it's exactly the type of development that Funk has been saying the city needs along the proposed light rail route.  I hope some tweaking by the developers can make it work.

Following this story has led me to see it as just another black eye for the current administration.  Here is the perfect project for this corner, sitting and waiting for approval in a very difficult economy, in a city where new development has slowed to crawl or even stopped in the last year.  And the backers still not only don't get the needed incentives - they may still be able to scale down or build something else entirely, maybe another strip mall - they are patronized and not given at least the due process that anyone doing business with the city deserves.

  I agree with KCMax.  While I generally favor a use of incentives, I understand the need for more scrutiny that Funk has brought to the table.  These kinds of moves, however, demonstrate to me that KCMO has now gone beyond additional scrutinizing to just throwing up a big 'closed for biz' sign at City Hall. 

The city should do everything in their power to at least reach an agreeable compromise on this deal - reduced incentives, slightly cheaper building, whatever.  Projects like this can take our neighborhood success stories like W. 39th and push them over the edge, increasing property values and helping to pull in additional residents, fuel local shops, and better connect our core.  Instead, we've seen a proliferation of self-storage marts and car washes and gas stations representing the most lucrative uses for midtown properties.

First, the developer has owned the property for at least a year, almost as long as it has been vacant.  The rodent "infestation" and "blight" have occurred under his ownership, so it is quite disingenuous for him claim he needs incentives to remediate the blight that he allowed to happen.  Second, a 4% rate of return is about the same as the Power & Light district, and a $340,000 profit for this one little project.

I really want this to happen, but I also want the city use some common sense.  The developer is asking for a 100% tax abatement.  Our neighborhood surely needs this type of development, but we also need property owners paying taxes to support city services, schools, libraries, etc.  A Taco Bell without any incentives would bring in more revenue than a mixed-used building that pays no taxes.

Surely there is room for a compromise that makes the project workable for the developer and is fiscally responsible for the city.

Just some food for thought.

Did anyone catch this week's meeting of the Finance Committee?  The only part I caught while channel surfing was Russ Johnson (or John Sharp, getting some meetings mixed up) asking questions and making comments about the recent change in MO state law concering property taxes and how communities cannot have an increase that exceeds inflation.  Some allowances are made for new construction and such but it would seem that the state has put some limits on local taxing authorities.  Wonder how this might affect property tax abatements and how they are granted.  Plus it would seem that the state is encouraging more of a shift from property taxes to other tax sources a government body may collect.

My initial thought on this state law would be that it might be wise to grant property tax abatements without any other incentives for projects in order to protect the overall tax stream.  Of course, there are many tax authorities that are almost exclusively dependent on property taxes so any tax abatements granted by the city should have some protection of these other governemnt bodies.

Tax abatement does not mean tax free.....YOU STILL PAY TAXES.  Tax revenue STILL goes to the taxing jurisdictions.  They are just frozen the year the project is finished.....And we are just talking about proeprty taxes.   Don't forget e-tax, utility tax, sales tax....etc.  Right now none of those are being generated on the site.  Currenlty the only taxes generated are approx. $13k/year in property tax. 

this also doesn't take into account the proposed $10+ million investment in the site....Construction materials...i.e. taxes on those, and construction employment.

It doesn't take a genius to figure out this is a great project for the site, the neighborhood, and the city.  Too bad the Funky Seven didn't give anyone a chance to make a case for merits of the project before deciding against it.

And yes a Taco Bell probably would work here....but is that the type of development we want on this corner? 

The new state legislation EXCLUDES Jackson and St. Louis counties, in order to insure the school districts get a shot at every possible tax dollar.  That's fact, not opinion.

Your bias is showing.  4% of a half billion looks a lot different than 4% of a project this size.

$340,000 return on risking $10 mil + (quoting other peoples figures), that makes no sense at all.  Put your money in a zero risk investment and make the same return.  Most any construction project can see costs shift 5 to 10% in the blink of an eye, with no way to control the unexpected.

Abatement?  The most misunderstood and maligned tool for growth we have.  Dangerboy, you're not looking at the big picture and you're simultaneously buying into the concept of evil developers.

Are you talking about just on the school district level or everything in Jackson County?  The discussion happen to do with the city, itself, on a whole not just the city portion outside of Jackson County.

I don't quite understand your question. 

Let me rephrase my point:  You are correct that the state of Missouri has passed legislation that prevents counties from increasing property taxes beyond the rate of inflation.  However, the legislation excludes Jackson and St. Louis counties from this requirement.  These counties can increase their taxes to whatever level they feel they can justify, without limit.  The sole purpose for these exclusions is to provide maximum funding opportunity for the Kansas City, Missouri and St. Louis school districts.  The legislation also impacts the balance of these counties outside of those school districts. 

The school districts have had, and continue to have the option of declining the increase. Last year the Jackson County legislature requested that the KCMOSD elect to forego the increase that came as result of massive reassessment of downtown properties (as high as 1500% increase). They have so far been reluctant to voluntarily decline the windfall increase in funding.

Jackson County sets its own levy.  The KCMOSD sets its own levy.  KCMO sets its own levy.  So I can see that the SD is free to collect property taxes that exceed the inflation rate if assessments increase.  The discussion at the meeting centered on the city not being able to collect the full amount of property taxes on higher assessments.
In other words, if there is property that is accessed by a dirt road it is likely to have a low assessment.  If the city came along and paved the road it is then likely that the property's assessment would increase therefore more taxes generated and collected by the city to help justify the paving of the road. With the new legislation the city has no incentive to pave the road if it does not receive the full benefit, through increased taxes.

Jackson County nor the city is free from this requirement but the KCMOSD is.  If not then the City Treasurer and the members of the City Council on the committee are wrong and you are right.

Price Development Group now has a for sale sign on this property.  This would have been a good project.  It's too bad the developer was insistent on getting unneeded tax breaks.

too bad the PIEA Board were DICKS to the developer and maybe this project could have proceeded.  This project got killed from the top down....i.e. Funkhouser.  He instructed the new board members to kill it.

This and the fact that KCMO seriously dropped the ball on state tax credits, effectively killing several urban core projects is about the only real development news in KC and it's not good news.

The Business Journal even stated that the main reason St Louis got so many more state tax credit projects than KC was city hall and its total and complete lack of interest in continuing the redevelopment of urban KCMO.

It's been a pretty sad freefall in KC for the past year or so.  I never would have imagined it would be as bad as it has gotten.

Metro KC is just not as strong and economically diverse as I thought it was and that is not just KCMO, but the suburbs as well.