By Joe Jarosz
February 24, 2016
KANSAS CITY, Missouri — Two weeks ago, city officials announced plans that would address dangerous buildings in Kansas City.
Mayor Sly James wasn’t done. Last Wednesday, James made a presentation to the City Council’s Planning, Zoning and Economic Development Committee to introduce a resolution to encourage economic development in the most severely distressed areas of Kansas City based on federal designation criteria. The plan is called the Shared Success Fund and the mayor said the idea behind it is to direct the city’s continuing momentum and success of economic development to portions of the city that are not currently attracting enough development. Money for the fund, which the mayor estimated to be about $100,000 annually, would come from payments in lieu of taxes — or PILOT dollars.
Too often, he told the committee, developers choose not to build projects in certain areas of the city. This gives the city another tool in their toolbox to encourage development in distressed areas. Under the resolution, the city’s revenue from participating economic development projects would be put in the Shared Success Fund and an advisory committee would be established to recommend eligible projects to Council.
“It’s not that people don’t want to develop on the East Side,” James said. “It’s that they can’t get a return on investment.”
Initial criteria under review to qualify to receive these funds include a preference to provide Shared Success Fund money to projects that are commercial developments, involve capital investment in commercial real estate, generate high quality jobs, leverage other public/private investment and have a long-term impact. Under the proposal, projects will not be eligible for the Shared Success Fund if they qualify for Public Improvement Advisory Committee funds; if they are in business for the sale of package liquor, firearms or scrap metal, or if they are considered pawn shops, payday loan establishments, cigarette or smoke shops, tattoo/piercing parlors or adult-oriented businesses.
“In its simplest form, the fund is designed to share the economic development success of some parts of our city with all parts of our city,” James said. “The Shared Success Fund is a new way to help provide gap funding to get qualifying projects going. This fund isn’t something that will be able to transform an entire neighborhood by next week, rather the fund will build up over time. But we must start now so that we can add another tool to the city’s toolbox for developing all areas of our city, not just the areas where development comes easily.”
Pedro Zamora, executive director of the Hispanic Economic Development Corp., which serves the city’s West Side and Northeast areas, spoke in favor of the resolution, saying access to capital for community development corporations (CDCs) is progressing slowly and faces several challenges.
“Unless a CDC successfully meets these capital challenges, it will continue to have a difficult time fulfilling the promise of an outcome-oriented, inclusive and integrated approach to creating systemic change in low-income communities in Kansas City,” Zamora said. “With the Shared Success Fund, we can attract the private capital investments and scarce city tax incentives and subsidies necessary to fund these community-based initiatives beyond real estate investments to investment that promote human capital development. This fund can enhance social return while generating financial returns,” he added.
Joe Hudson, Political Director for the St. Louis-Kansas City Carpenters Regional Council, also expressed enthusiasm for the proposal.
“I’m excited about the opportunity the Shared Success Fund presents to put more people from underemployed areas of the City to work,” Hudson said. “Our union clearly derives an indirect benefit through the investment of economic development dollars in local construction projects.”