Mayor's GrowKC Fund to use incentives east of Troost

[FangKC]

Mayor will introduce tool aimed at boosting East Side development

Kansas City Mayor Sly James on Wednesday will introduce plans for a new economic development tool aimed at encouraging development in disadvantaged East Side communities.

The tool, expected to be called either the GrowKC Fund or Shared Success Fund, was conceived of by Charles Renner, a development attorney with Husch Blackwell LLP. The mayor is scheduled to introduce a resolution calling for its creation during the 1:30 p.m. meeting of the City Council’s Planning, Zoning and Economic Development Committee.

...

His solution, which is at the heart of plan to be introduced by James, involves payments in lieu of taxes, or PILOTs, which are annual sums that developers frequently agree to pay the school district and other taxing jurisdictions in return for their support of incentive requests.

Under the new plan, the PILOTs the city receives, which are generally about 20 percent of total PILOTs granted, would be placed in a fund to help projects in distressed areas.

Specifically, Renner said, the funds would be used to fill financing gaps that may remain for projects even after incentives are approved. That heightened potential for public support, he said, is expected to attract developers to distressed areas that might otherwise be overlooked.

...

http://tinyurl.com/hnmuyss

[FangKC]

The mayor's press release.

Mayor James Proposes Shared Success Fund

Fund would channel dollars to severely distressed areas of the city

Mayor Sly James today proposed a resolution that would direct the city’s portion of payments in lieu of taxes on economic development projects to a new fund specifically designed to benefit areas of the city determined to be severely distressed, based on federal designation criteria.

Dubbed the Shared Success Fund, James said the objective is to direct the city’s continuing momentum and success of economic development to portions of the city that currently are not attracting enough development.

“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 told the City Council’s Planning, Zoning and Economic Development Committee.

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.

Initial criteria under review 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.

“The Shared Success Fun is a new way to help provide gap funding to get qualifying projects going,” James said. “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, 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 express 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.”

http://kcmayor.org/newsreleases/mayor-j ... ccess-fund

[DaveKCMO]

thumbs up!

[missingkc]

So, which will it be? A lawsuit or legislative uproar over the exclusion of gun shops?

[kboish]

http://www.bizjournals.com/kansascity/n ... efore.html

I wasn't quite sure where to post this, but thought this thread may be appropriate. I was reading this article in bizjournal and thought I'd look into it a bit to see if some of the quotes were true. Specifically, this quote... which basically says Kemper believes incentives are making his budget unsustainable.

Rather, he said, his intent is to shine light on the real tax-dollar total being diverted from the basic services that local libraries, schools and others are attempting to provide for children and other taxpayers.

"There comes a moment when you say, 'I'm sorry, but my (library) revenue's growing at 1.2 percent, when the inflation rate is 2 percent a year,'" Kemper said. "If that continues, I go out of business. ... Our revenue from property tax has been more or less flattened at around $15 million over 10 years, while (private-sector) revenue has been growing during that time, even with the Great Recession."

I looked at the libraries oldest CAFR available (2008-2009) and their newest (2014-2015). In each of these they list the last ten years worth of general governmental revenues by source for the library (p. 54 and 65 in their respective CAFRs). It shows property taxes at $12,438,022 in 99-00 and $16,782,445 in 14-15.

This would be an annualized growth rate of 2.32%. Correct?

Now, you could pick a shorter time frame and obviously show a different growth rate, but it seems like when you're talking property tax growth you typically want to look at the longest time frame to get a better idea of the average.

This is especially true when you consider the middle years included a growth rate in housing never before seen in history and a subsequent housing bust never before seen. You would likely not want to start your time period during the middle of that recession as he seems to be doing. In fact if you look back only to 2009 the number seesaws back and forth around $16 million. I guess the question is- Is this last 5 years an effect of the largest housing market collapse in history and the subsequent recession or is this because of a tax abatement policy that has been in place for 30 years?

Maybe I'm missing something?

http://www.kclibrary.org/policies-financials

[DaveKCMO]

never underestimate a libertarian's ability to cherry pick data to make government look bad.

[Eon Blue]

"Anti-Tax Libertarian in Charge of Public Institution Concerned about Taxpayer-Funded Revenue Stream"

[loftguy]

Have to hand it to Crosby. He hates equally every abatement and TIF from which he does not benefit.

[FangKC]

Nor will any Kemper talk about the role of banks, and other lending institutions, in the decline of the City east of Troost (which is a pretty substantial land area). The redlining (lending institutions not granting mortgages in predetermined areas) that went on for decades, and to some extent, still goes on. Property values collapsed, and thus, tax revenue from that whole part of the City collapsed as well. It wasn't only black people that couldn't get mortgages, but if a whole area was redlined, it was probably pretty hard for Hispanics, Asians, and whites as well.

If Crosby is unhappy that the library doesn't get enough property tax revenue, then he only need look at the portraits of his ancestors, because I'm sure they had a hand in it.

[FangKC]

KC, KCK mayors promote plan to help struggling neighborhoods

The Local Initiatives Support Corporation (LISC) is spearheading the loan fund, with support from the Kauffman Foundation, Hall Family Foundation, Kansas City municipal government and the Unified Government of Wyandotte County.

The money will go for such “soft costs” as architectural drawings, financial and environmental studies, legal fees, market research, community engagement and other pre-development work in low- to moderate-income areas on both sides of the state line.

“This is really challenging and complex work,” LISC executive director Stephen Samuels told dozens of neighborhood advocates at Monday’s announcement.

He said the funding is intended to help worthwhile projects get past the difficult startup phase and cultivate economic markets that have suffered from a vacuum of activity.

http://www.kansascity.com/news/politics ... 51187.html

[FangKC]

Fund aims to kickstart development in distressed KC, KCK neighborhoods

http://www.bizjournals.com/kansascity/n ... nt-in.html