by Alan McArthur
Representatives from the city of Kansas City came to the Platte County R-3 School Board meeting on Thursday night to discuss a current bill in the Missouri House of Representatives which would affect the Kansas City International (KCI) airport property.
House Bill 1836 states that development on property owned by a city near or adjacent to a commercial airport would not be subject to a tax on possessor interest such as a tax on a lease.
The legislation would affect property at approximately 10 airports in Missouri with an actual impact on KCI and the Spirit of St. Louis Airport in St. Louis.
The bill was introduced by Representative Timothy Flook, of District 34, and co-sponsored by District 30 Representative Jason Brown of Platte City.
According to Christopher Byrd, attorney representing Kansas City at the meeting, Kansas City owns about 15,000 acres of land around the airport and is planning on developing about 6,000 acres. Currently the county and taxing entities receive no property taxes from the land because it is owned by Kansas City and exempt from property taxes.
The largest percentage of property tax collected goes to the school district with a levy of $4.19 per $100 assessed value. The only other school district affected at KCI is the Park Hill School District.
The city of Kansas City is offering to pay the school districts an amount of $0.08 per square foot of a building's foot print through the lease agreements. Kansas City will charge the developer an amount for the parking lot area of the developments.
Byrd said the city cannot sell the land, but can lease the land, allowing a developer to construct a building on the property, which would then later revert back to the city's possession.
“When the tax issue comes up developers are balking at the idea,” said Byrd. “We compete against other places with airport ground for lease, like Dallas, LAX, Boston and New York. All of them are tax abated. Missouri is one of only four states with the tax, so we are automatically at a disadvantage.”
Currently, Kansas City has developer Trammel Crow building the first phase of a warehouse development on the south side of KCI. Kansas City hopes the development will spur additional development on nearby property.
“This is a job creation issue,” said Byrd. “There will be 40 to 50 people at the first building with the potential for 11 phases. Each job will pay between $55,000 and $65,000. Those are jobs we need in Platte County.”
Several members of the board questioned the proposed legislation for the land.
“Why is the city seeking legislation?” asked Bob Shaw, board president. “It is one thing to look at the projects individually; it's another to apply this to the entire property.”
“We don't know what is to be developed out there, and this brings certainty to whether a project will work or won't work,” said Byrd. “Developers will turn around and walk if the problem is not solved.”
Shaw responded saying that some do well without tax abatements, referencing TD Ameritrade and Farmland Industries.
“Ameritrade wanted tax abatements, but wasn't given any and still came to Kansas City,” said Shaw. “Farmland was given every tax abatement and went out of business. If a developer is not willing to pay their share to society for taxes, what else are they unwilling to do?”
“The bottom line is the most important,” said Byrd. “It's not about whether to abate taxes or not. Right now the school district gets nothing for that property and if we don't fix this there will still be cows out there 20 years from now.”
Another board member spoke up against the proposal.
“You can't believe this won't bring families to our district,” said Carey Rolofson, board member. “The city's had a hard time developing the property and I don't think it should be our burden.”
“Is the board against 500 new high paying jobs in Kansas City?” asked Byrd.
One of the arguments brought up was about an increase in children living in the school district, but no new commercial taxes to help support the education of the children.
“Many homeowners have already had a big tax increase this year from reassessment,” said Shaw.
Shaw said it was not fair for current taxpayers to have to pay more for educating more children, while the district was getting no more income from the commercial development.
Superintendent Mark Harpst said he would be willing to try to negotiate a better price with Kansas City.
Harpst pointed out that on a 500,000 square foot building the district would normally receive about $134,080 with a discount and would receive only $40,000 with Kansas City's offer.
Kansas City's attorney then said that he expects the legislation to move quickly through the house.
“There is legislation in the house to accomplish the goal of Kansas City and it has a lot of traction with the leadership,” said Byrd. “I am confident it will be out of the House in two weeks.”
“At the same time, if it fails, it could be put on several other bills,” said Byrd. “The leadership thinks it is good for the state of Missouri. This is a big issue with job creation that as the country has economic trouble that Missouri will not be part of it.”
“Kansas City would prefer the board be in support of the bill and lock in future revenue to the school district,” said Byrd. “If not, the bill could pass and the school district would get nothing. The only way the school district gets money is to enter negotiations and support the bill.”
Some board members were upset because the bill was sponsored by Platte City Representative Jason Brown without the knowledge of the school district.
“I guess I'm appalled because our Representative Jason Brown did not bring this to us,” said Patricia Stinnett, board member. “This was filed behind our back.”
“We are not intending to go behind anyone's back,” said Byrd. “The intention was to talk with both school boards and the first board meeting was this one.”
A representative from KCI then spoke up to the board.
“Since the mid 80's only two facilities have been built at the airport,” said David Long, deputy director of aviation. “From 1986 through about 1990 there was nothing.”
“There are a lot of areas in Platte County that have not had development for 30 years,” said John Cady, the attorney for the school district. “Just because they have not had any development doesn't mean they need tax abatement. I had a discussion today with a person who intends to put warehouses near KCI, but when he found out about this project he is hesitant now.”
“Without this tax abatement, 20 years from now the airport will still be the same as it is now, empty,” said Byrd.
Byrd made the point that the development on KCI property would create development around the airport.
“One thing to keep in mind is with the increase in jobs it will spur other development and development outside of the airport,” said Byrd.
Stinnett asked Byrd how many airports would be affected by the legislation.
Byrd responded that there are about 10 airports in Missouri that will be affected.
“I think the impact here is more than anywhere else,” said Mary Temperelli, board member.
“This airport is one it will greatly affect, as far as the amount of land developable,” said Byrd. “The only other airport it will really affect is in St. Charles.”
Several board members then stated their opinion about the legislation.
“I recognize the economic engine an airport can bring,” said Rolofson. “It's under utilized now and I think we should probably look at negotiating a fair and reasonable amount with the city.”
“While I hate all tax abatement, we've made deals in the past we could live with,” said Dick Modin, board member. “I only care about this district and our kids; I'm not concerned about Kansas City or getting jobs for Kansas City. It's obvious some (representatives) who are supposed to be looking out for our kids, aren't.”
“The current offer is not acceptable to me as a superintendent,” said Harpst. “We have more to lose or gain than anyone else in the state.”
“I think our best option is to negotiate,” said Karen Wagoner, board member.
“As you know I have a history of being repulsed by tax abatements,” said Shaw. “It seems like every time we turn around there is a new tax abatement from Kansas City. Our best option is to consult with legal counsel to talk about possible negotiations.”
Byrd reiterated his feelings about how quickly the bill will move through the legislature.
“It may be three to four weeks before this will pass,” said Byrd. “It will not be a protracted bill; my goal is to get this out by spring break. If it passes both houses before an agreement is done, then it passes before an agreement is done.”
The board decided to have Harpst attempt to negotiate a better price with the city of Kansas City. The next hearing on the bill may be on Wednesday, February 27 in the Special Committee on Job Creation and Economic Development for the Missouri House of Representatives.
The board also heard an update saying the construction work at the new Pathfinder Elementary school is back on schedule after a delay last month. Craig Shonk, Manning Construction project manager, reported that the change in construction techniques to put the walls up first and then pour the concrete slab for the school was moving forward.
The change was expected to cost the district an extra $40,000 to $50,000, but according to Shonk there will be no cost increase to the district.
The board also approved a bid for six new buses to replace four buses. The new buses include four 84 passenger buses, one 53 passenger bus and one 24 passenger bus. The buses replace two 77 passenger buses, one 72 passenger bus, and one 45 passenger bus. The total price for the six new buses totals $548,080.