PortKC’s oversight failures are now Missouri lawmakers’ problem

This rendering from Lux Living’s website shows the company’s plans for a 250-unit apartment development along the Missouri Riverfront. Contributed photo

In June 2025, I wrote that PortKC, Kansas City’s ubiquitous subsidy-granting agency, was too powerful, too poorly run, and subject to too little oversight. Evidence from the past year has only strengthened that conclusion.

If Kansas City’s leaders are unwilling to demand more, state legislators must.

PortKC’s portfolio has grown far beyond its original mission. What began as a focus on river commerce has become one of the region’s most powerful economic development organizations, issuing subsidies, facilitating real estate deals and exercising authority that often receives less scrutiny.

At the time, I raised two primary concerns. The first was structural. PortKC receives a substantial share of its revenue from the very development transactions it approves. Nearly half of its net operating revenue comes from developer and transaction fees. That creates an obvious conflict; the agency has an incentive to say yes.

The second concern was managerial. Independent audits repeatedly identified significant deficiencies in PortKC’s internal controls. Auditors warned that key financial responsibilities remained concentrated in too few hands and lacked adequate oversight. Management acknowledged the findings and promised corrective action, yet the deficiencies remained.

Since that column was published, another audit contains the same finding. Five years is an extraordinary amount of time for an organization to ignore known governance problems. At this point, either management lacks the capacity to fix the problem, lacks the will to fix the problem, or the board is unwilling to insist it be fixed.

Two recent pieces by Thomas Friestad in the Kansas City Business Journal (here and here) illustrate why stronger governance and transparency are necessary. Project Blitz was initially announced as a $500 million data center in Kansas City’s Northland though application materials suggested total investment could ultimately reach several billion dollars. Developers sought roughly $570 million in combined state and local subsidies for a project projected to create just 12 full-time jobs. Then, according to Friestad, the project’s partners later became embroiled in arbitration involving allegations of cost overruns, delays, financing difficulties and management failures.

The arbitration panel reportedly rejected the claims and is determining whether any compensation should be awarded. That does not mean every allegation raised was false.

The application was ultimately withdrawn.

PortKC’s application asks about prior litigation, arbitration and similar disputes. But the application was submitted before the arbitration began, meaning the dispute did not need to be disclosed. PortKC’s review process apparently does not account for events occurring after an application is submitted. Yet public subsidy decisions can take months, and during that time, projects may encounter financing problems, legal disputes, major cost increases or other changes. Agencies granting such large subsidies should ensure that all information is disclosed and evaluated before incentives are approved.

Even PortKC’s CEO conceded that the controversy illustrates the need for continuing disclosures throughout the process, not just at the outset.

Project Blitz is not the first time there has been reason to question PortKC’s diligence. In 2022, the agency considered a Lux Living apartment project that carried approximately $12.6 million in tax incentives. During public testimony, critics highlighted the developer’s history of tenant complaints, litigation in St. Louis, and an SEC sanction against its CEO. PortKC officials acknowledged they were unfamiliar with some of those concerns, including issues that had already been publicly reported in St. Louis.

The board ultimately declined to advance the Lux Living project, but only after public testimony introduced information that had not surfaced during the agency’s own review. That episode and Project Blitz both demonstrate the value of outside scrutiny. In both cases, critical information was discovered by third parties rather than through PortKC’s own vetting process.

Recall that PortKC is funded in part through fees collected from development transactions. It receives application fees, transaction fees and ongoing administrative fees tied to approved projects. That arrangement creates a glaring conflict. Agencies should be incentivized to protect taxpayers, not rubberstamp applications.

As PortKC’s finances are increasingly tied to development transaction fees, it has an institutional incentive to approve projects, not aggressively vet them.

If PortKC lacks the expertise or will to uncover such information on its own, Missouri lawmakers should ask whether it should be exercising such significant power in the first place. Kansas City’s City Council has shown no desire to rein in the agency or even require Mayoral appointments receive their approval.

Therefore, the General Assembly should revisit Missouri’s port authority statutes. Major subsidy applications should be subject to stronger disclosure requirements regarding litigation, arbitration, financial risks and significant project changes. Truly independent financial reviews—not ones funded by the applicant—should be required before subsidies are approved. Local taxing jurisdictions should play a greater role. And lawmakers should remove the glaring conflicts in which agencies benefit from development deals they approve.

None of this would prevent worthwhile projects from moving forward. They would simply bring more transparency and accountability.

Five consecutive audits identified the same deficiency in PortKC’s internal controls. Meanwhile, the agency continued to expand its role in economic development, pursue larger and more complex projects, and seek additional authority while failing to properly vet applicants. This is not only a problem of oversight. It is a failure of governance. And if local officials refuse to address it, the state must.

Missouri Independent is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Missouri Independent maintains editorial independence. Contact Editor Jason Hancock for questions: info@missouriindependent.com.