Here’s why that shiny new government building doesn’t really help taxpayers

I played Leonard Nimoy last week and went In Search Of …

The object of my quest? A moving sidewalk.

Its location? Underneath Pershing Road.

My obstacle? Three security guards.

First, some background.

In 2006, the Internal Revenue Service dedicated a new building near Union Station where workers now process tax returns. It’s a heavy-looking thing with window slits that seem designed to enable archers to fire upon advancing enemies.

A colossus at 1.1 million square feet, the new building consolidated IRS workers who previously had reported to the Bannister Federal Complex or to an office in Overland Park. U.S. Sen. Kit Bond called the facility a “huge boost to our region’s economy” when it opened.

To be sure, architects, engineers and construction workers benefited. The building carries a “green” certification as well, which is cool.

But the IRS also performed a sort of vanishing act.

To build its headquarters, the IRS didn’t clip pennies from a few million 1040s. Instead, the federal agency worked with a private developer. The IRS leases its new building from Pershing Road Development Co., a venture of DST Systems and a company controlled by Kansas City insurance executive Michael Merriman.

The Pershing Road group undertook the deal because it qualified for tax-increment financing, a scheme that allows developers to share in the tax revenues created by their projects.

One tax stream that TIF makes available to developers is the 1 percent income tax that’s paid by everyone who works in Kansas City. That adds up to a significant sum of money on a project like the IRS facility because thousands of people work there.

City officials further sweetened the deal for the developers. It gets a little complicated, but the important thing to know is that Pershing Road Development Co. is receiving more than just the “incremental” taxes promised by tax-increment financing; it’s also getting a piece of the earnings taxes that IRS workers paid to City Hall before the consolidation.

To review: While the IRS employs more people in Kansas City than it did before the redevelopment, fewer of the employees are paying earnings taxes to the city.

Other federal offices have also disappeared into TIF districts. The U.S. Department of Transportation leases a building in a TIF area adjacent to Ilus W. Davis Park downtown.

All of which got me thinking about another rule of thumb: If two U.S. senators from the same state and different political parties agree on something, a ribbon-cutting is probably involved.

On June 17, Bond and his Democratic colleague, Sen. Claire McCaskill, wrote to the head of the U.S. General Services Administration. Their two-page letter asks a series of questions. But it’s obvious that the senators’ interest in the answers isn’t all that genuine.

What they really want is a big, shiny, new federal office building in downtown Kansas City, Missouri.

First proposed in 2006, a new federal building was once considered a done deal. The only mystery was its location: Would it be on downtown’s east end or along the Missouri riverfront?

Then, a few weeks ago, officials at the GSA, which acts as Uncle Sam’s landlord, asked for a “review.” Was the proposed building in the taxpayers’ best interest? Could the GSA and the Federal Emergency Management Agency, the building’s prospective tenants, make do someplace else without spending all that money on a new place? The GSA, prodded by Sen. Barbara Boxer of California, chairwoman of the U.S. Senate Committee on Environment and Public Works, decided to find out.

Bond and McCaskill say the review is unnecessary.


As Bond and McCaskill point out, the Bannister complex is an aging, hastily constructed hodgepodge of buildings. Harry Truman broke ground at the site in 1942, and workers there built aircraft engines for the war effort. (“It’s a site that’s probably outlived its usefulness,” John Sharp, a Kansas City councilman who represents that part of town, tells me.)

Ostensibly on a fact-finding mission, Bond and McCaskill submitted a list of “questions and concerns” that reads like a cross-examination.

They ask, for instance, whether it’s true that the GSA’s current Bannister Road location “is considered within a flood plain and therefore wouldn’t be considered a possible location.”

And what about asbestos-containing materials at the Bannister complex? Better check out those, too.

The senators aren’t doing anything unusual. Members of Congress who are quick to damn government programs go into spasms if military bases in their districts are threatened. It’s just the way things work.

But the proposed new federal building raises questions that go beyond pork-barrel spending. The groundbreaking that Bond and McCaskill so desperately want to attend might not be all that great for their constituents, either.

When the federal government owns real estate, it doesn’t pay property taxes. The city, at least, is able to tax the people who report to work there. But TIF, in all its splendor, freezes property taxes and gives developers a shot at the earnings taxes, as well.

It’s like trading a hangover for the flu.

I suppose there’s an intangible benefit to these projects. The IRS project preserved the stately, old main post office, around which the new tax compound was built. But the Timothy McVeigh/Osama bin Laden threat keeps the public from enjoying the old building or its new, planet-friendly neighbor.

I found out as much when I tried to ride that moving sidewalk.

I had read that the people mover runs underground between the IRS facility and a parking garage adjacent to Union Station, traveling an impressive 340 feet. Alas, you need a job at the IRS to ride the thing. My aspiration to live like a Jetson ended at a security desk on the garage side of the walkway.

After I was turned back by the guards, I decided to try to salvage the day by exploring the National Archives, which moved from the Bannister complex into an old freight building next to Union Station. A gallery exhibit there explains the Kansas-Nebraska Act in maps and political cartoons. I left feeling edified.

The National Archives is a nice addition to the urban core’s inventory of public buildings. But a new office building for the GSA and FEMA would be more like the IRS center — impressive in concept but fortresslike in practice because FEMA plays a prominent role in most nut-case government-conspiracy theories.

Yet political leaders such as Bond and McCaskill and the city’s business interests act as though a new federal office building is downtown’s missing piece. The Kansas City Star has referred to the building as a “plum.” Bill Dietrich, the president of the Downtown Council, has called it a “catalyst.”

Convinced of this, the City Council committed TIF to the project in 2007. Hangover, meet flu.

We can all agree that more people living and working downtown is a good thing. But if we’re at “X” now and a new federal office building takes us to “Y,” how magic is downtown going to become? And at what price to the city budget?

The GSA is expected to complete its review in the coming days. The agency might make a recommendation to cancel the prospectus or issue a new one. Or it might decide to continue with the plan to relocate the Bannister workers somewhere between the river and the freeway loop just south of downtown.


Here’s my idea: Bring the GSA folks downtown but have them lease space in an existing office building. Lord knows, there are plenty of vacancies.

And let FEMA build its fortress, but at a cheaper cost, without the GSA tagging along. Good deals on land around Bannister Road surely are available.

Click here to write a letter to the editor.

Categories: News