Dec

27

TIF abuse reaches new heights in Briarcliff

December 27, 2006 |

Now I know that the current council really has no shame at all when it comes to handing out tax breaks… The posh Briarcliff West development is set to get a Super TIF tax break for a new hotel and office building, on top of an existing non-Super TIF. Super TIF is a new scheme that diverts all tax money. It was created as way for blighted areas to compete with regular TIFs, which were long ago co-opted for suburban development on virgin farmland.

Outgoing 2nd District Councilwoman Bonnie Sue Cooper is the driver on this new Briarcliff Super TIF. Her attitude is that the Northland deserves tax breaks because it’s “unfair” for only blighted areas to get them. Briarcliff is far from blighted. It’s one of the poshest new developments in the city, even giving Leawood a run for its money. Briarcliff is also home to Mayor Kay Barnes.

Are we really supposed to believe that Briacliff needs mega subsidies to compete? I call bullshit.


Silent deal underpins Briarcliff request
Arrangement calls for council to back Super TIF in Northland
Kansas City Business Journal - December 22, 2006
by Jim Davis
Staff Writer

A request for extra-strength tax incentives to bring a hotel and an office building to the upscale Briarcliff area is unlikely to face serious opposition from the Kansas City Council, thanks to an unwritten deal councilmembers struck three years ago.

In January, the council will review the Tax Increment Financing Commission of Kansas City’s unanimous endorsement of Briarcliff Development Co.’s request for Super TIF. Approval would divert all new property taxes and all new sales, earnings and other economic activity taxes to the developer — adding $15 million to a regular TIF benefit of $11.7 million for the $91 million expansion.

Councilwoman Bonnie Sue Cooper engineered the extraordinary incentive for an area whose offices are fully leased and whose lease rates for new space may exceed the Northland average by $10 a square foot.

Three years ago, when city officials drew boundaries for areas eligible for aid through the Missouri Downtown and Rural Economic Stimulus Act, Cooper wanted to include Briarcliff and other parts of her 2nd District north of the Missouri River.

“To ignore the Northland like we don’t exist — that just doesn’t seem quite fair to me,” she said at the time.

The council excluded most of the Northland from the incentive program. Although Briarcliff couldn’t qualify for Modesa’s diversion of state taxes to help finance construction, the council agreed to back the development’s future entreaties for Super TIF.

Cooper called the agreement, which wasn’t memorialized in a council ordinance or resolution, a fair acknowledgment of the Northland’s import to Kansas City.

“We’re kind of the cash cow,” she said.

Cooper, a member of the council’s Planning, Zoning and Economic Development Committee, which will consider the TIF plan amendment before it goes to the full council, said the proposed 200-room, full-service hotel would serve businesses in and near Briarcliff, as well as people attending conventions at Bartle Hall, five miles to the south.

Diverted taxes would pay for a $7 million parking garage, as well as improvements to roads and other infrastructure.

Councilman John Fairfield, who also represents the 2nd District and serves on the PZ&E Committee, supports Super TIF for Briarcliff. The request also calls for diverting three-quarters of economic activity taxes on the Briarcliff Village shopping center, which opened in October.

“Having additional hotel space this close to Downtown is a good thing,” Fairfield said. “The only way it’s going to happen is with Super TIF.”

The council first authorized Super TIF in January 1995 for downtown hotels. Since then, the tool has been used in several other places. Most recently, the city approved Super TIF for the East Village redevelopment east of City Hall, which will be anchored by JE Dunn Construction Co.’s new headquarters and include more than 600 new housing units.

Briarcliff would be the Northland’s first Super TIF recipient.

Former Councilman Ed Ford, who’s running again for election in 2007, said he pushed the city to adopt an economic development policy before leaving the council in 2003. In August, voters approved a new city charter that calls for the council to enact a policy for “the prudent issuance, management and use of debt, including bonds, and the use of economic incentives.”

Action probably won’t come until after the new council and mayor take office, Ford said.

“The new council may decide we’ve gone too far,” he said. “Obviously, you can’t undo anything that’s been approved, but is this what we intended with the use of this tool? Did we intend a Super TIF for a hotel in Briarcliff?”

Incentive info
Tax increment financing — TIF returns to the developer all property taxes and half of sales, earnings and other economic activity taxes generated by a project.
Super TIF — Returns all taxes on property and economic activity to the developer.
Missouri Downtown and Rural Economic Stimulus Act — Modesa returns to the developer as much as half of qualifying downtown investments’ state sales and income taxes.


Comments

11 Comments so far

  1. Tony on December 27, 2006 8:20 pm

    Awesome post. I’ve got nothing to add other than you’re 100% right. Corporate, City Council Sponsored welfare at its worst. Thinking of a good nickname . . . Tax Break Bonnie is the first thing that comes to mind.

  2. doinkman on December 27, 2006 9:59 pm

    Yes, great post!

    Bonnie says the Northland is “kind of the cash cow”, well then why do they need these subsidies? If the region is already a cash cow that would indicate to me that the economic engine is already started. Is that too logical of thinking inregards to our city council?

    Furthermore, the notion that building a hotel 5 miles north is great for “Having additional hotel space this close to Downtown” doesn’t pass the laugh test for me.

    Tony: I vote for Cash Cow Cooper.

  3. BlogKC on December 27, 2006 10:16 pm

    I also like Cash Cow Cooper, despite the misogynistic undertones. It goes well with Credit Card Kay.

  4. KC Guy on December 28, 2006 8:27 am

    If this is bad (which I agree it is) what civic action is being done to stop it? What citizen action? What government action? Who is the oversight person?

    I like reading about these things here, but what is lacking is information detailing the response or reaction to such corruption.

  5. vichykc on December 28, 2006 8:36 am

    Response? There are probably a few dissenters on the council, or former councilman like Ford, but it seems in this town unless your getting your name in the papers you’re a lame duck. Even negative press is good press in this town.

  6. Ryan on December 28, 2006 12:45 pm

    Politicians who oppose corporate welfare and TIF abuse and support fiscal responsibility get raked over the coals in the Star, maligned by the establishment, ignored, and don’t serve for long.

  7. Joe Medley on December 28, 2006 6:01 pm

    TIF is only the tip of the iceberg. With TIF, most of the time property taxes are just frozen at current levels. With PIEA and 353, property taxes are completely eliminated. Also, TIF plans are required to report to the TIF commission and the TIF commission to the General Assembly annually. That means I can point you to a single document that outlines where all the money is going for KCMO’s TIF plans. As far as I’ve ever been able tell, there are no such requirements for PIEA and 353.

    The time for action on this may be getting close.

    * TIF reform bills for the 2007 session have been filed in both houses of the Missouri General Assembly.

    * A group called Reclaim Democracy has comissioned a study of TIF by the economic department of UMKC. The study is scheduled to be released in January. Members of this group were not sure they understood it well enough to take a position on the issue, so they asked UMKC to find out exactly what effect it has had on Kansas City, Missouri. People close to this group tell me that Mark Funkhouser was very cooperative with the study’s authors.

    * A group that I’m involved with is holding an educational forum on TIF next Wednesday evening. Panelists include a community activist, a KCMO TIF compliance officer, and a representative of the MainCor Community Improvement District. Anyone interested in attending can read the details here: http://dfa.meetup.com/61/calendar/5312378/

    * Somebody has started a blog that focuses on the abuses of development incentives. It’s address is http://www.kctifed.blogspot.com

  8. Adrianne on December 28, 2006 6:48 pm

    Another reason why EVERYONE should vote in the upcoming City Council elections. The way to show your disapproval is with a vote of no-confidence.

  9. laamr mickens on January 3, 2007 5:12 am

    Isn’t it funny how the Bonnie Sue and Fairfield can support TIF’s for areas like the Northlands, but we can’t even get them to spend money of the Third and Fifth Districts? Areas that were intended for TIF’s? Areas that more than qualify for TIF’s?

    I’m doing a project that both Bonnie and Fairfield have known about for nearly three years? Funny how they can’t seem to help generate monies for the Urban Core, but they and their cohorts can get money for the Northlands? And Bonnie has the nerve to say the Northlands are being ignored? No wonder poverty and the death toll keeps rising in my community; while they make sure that their homes and way of life prosper. Must be nice to be selfish! Thank God they won’t be back!

  10. OutofBusiness on January 3, 2007 10:42 am

    Another casualty of this program is all of the vital small businesses on North Oak that were declared ‘blighted’ and now have to find new diggs.

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