By Paul Thompson
September 28, 2016
KANSAS CITY, Missouri – The Kansas City Council’s Planning, Zoning, and Economic Development (PZED) Committee proposed changes to the AdvanceKC economic development scorecard on Wednesday, September 28 that paves the way for economic incentive reform Ordinance #160383 to be voted on by the full City Council on Thursday, October 6.
The economic incentive ordinance, championed by 3rd District Councilman Quinton Lucas, would cap the real property tax abatement that the city could offer a development project at 75%, among a host of other limits to economic incentive packages. The ordinance would also create the Shared Success Fund, which would in turn reinvest those extra funds to some of the most economically distressed parts of the city. Lucas notes that the measure is intended to curb an over-reliance on economic incentives for development projects.
“We want to make sure that the public knows that we’re actually thinking about incentive policy and that we’re not just giving away the farm all the time,” said Lucas.
The ordinance has been in limbo since May 12, when it was first directed to the PZED Committee. It would be held on the agenda on six different occasions: May 25, June 8, June 22, July 6, August 10, August 24, and August 31. On September 7, a second Committee Substitute received a ‘Do Pass’ designation, and the ordinance went before the full council on Thursday, September 22. Despite being co-sponsored by Council members Quinton Lucas, Lee Barnes Jr., Jermaine Reed, Alissia Canady, Heather Hall, Teresa Loar, and Katheryn Shields – what would amount to a majority of the council – the measure was once again held until October 6, 2016 after 3rd District Councilman Jermaine Reed was forced to leave the City Council session to handle a personal issue.
During that September 22 City Council session, 1st District Councilman and Mayor Pro Tem Scott Wagner explained his own hesitancy to pass the incentive reform measure by bringing up section 9a of the ordinance, which relates to the AdvanceKC scorecard that grades the merits of the city’s economic development projects. Wagner noted that the scorecard was already scheduled to be discussed at the September 28 committee meeting.
“It would seem to me that there has to be some resolution to the tool before you have some resolution to the policy,” Wagner said.
The Planning, Zoning, and Economic Development Committee had their chance to discuss the AdvanceKC Scorecard on Wednesday, though Councilman Lucas and 1st District Councilwoman Heather Hall weren’t able to attend the meeting. Committee chair Scott Taylor was joined by Lee Barnes Jr. and Katheryn Shields for the discussion.
The current language associated with the AdvanceKC Scorecard encourages incentives “only as necessary” while emphasizing the public benefit and a “positive fiscal impact on taxing jurisdictions” as part of the threshold for granting economic incentive packages. The scorecard also prioritizes investments in economically distressed areas, a net new development of quality jobs, and sustainable and socially responsible development practices that would emphasize elements like historic preservation and expanded housing choices for Kansas City residents.
Revisions proposed to the AdvanceKC Scorecard ahead of the September 28 committee meeting included an increased focus on development projects in economically distressed census tracts, splitting the economic development scoring system into separate “job-based” and “site-based” scorecards, and a switch from a “confounding” 300-point system into a 100-point system that will be easier to weigh.
On Wednesday, the PZED Committee added extra points for developments which create indirect jobs paying prevailing wage, bumping up the maximum from 10 points to 15 points on their site-based scorecard. The committee also added new point-scoring possibilities for properties that (1) have been vacant longer than three years; (2) have seen taxable property values decrease over the past five years; or (3) are being converted from an obsolete use.
For the job-based scorecard, a proposed alteration would provide additional points for projects that include second chance programs that encourage the hiring of employees with prior criminal records.
After adjustments were proposed on September 28, the PZED Committee agreed to hold the measure so that Lucas and Hall can add their two cents during the October 5 meeting. In the meantime, the city plans on posting the updated AdvanceKC Scorecard on its website for public consumption in the near future. From there, the plan would be to advance the ordinance on October 5, allowing the new AdvanceKC Scorecard to be set before the second committee substitute for Ordinance No. 160383 reaches the full council on Thursday, October 6.
Although alterations to the scorecard could still be made during the Wednesday, October 5 PZED Committee meeting, Lucas contends that the prospect of changes to the scorecard should not be reason enough to hold the ordinance the following day.
“I wouldn’t expect the AdvanceKC Scorecard to have any effect on how Ordinance 160383 is written,” said Lucas. “I continue to think that it’s an unnecessary delay to hold up incentive reform.”
Lucas added that the incentive reform ordinance would be a boon for the Northeast by providing dollars through the Shared Success Fund and directing investment incentives to the Independence Avenue corridor.
“The ordinance would play out exceptionally well for the Northeast area,” Lucas said.
Kerrie Tyndall, Kansas City’s Director of Economic Development, said the revenue that goes into the Shared Success Fund will be pooled together, as opposed to being designated for certain areas. How much money the Shared Success Fund generates, and thus how much the Northeast area stands to benefit, will be tied to the state of economic development throughout the city.
“It’s going to depend on the overall development pipeline,” said Tyndall.