TIF Commission gives thumbs-up to downtown convention hotel financing plan over objections from school district, library

%{[ data-embed-type=”image” data-embed-id=”57150baa89121ca96b94711b” data-embed-element=”aside” ]}%

By Mike Burke’s own admission, the development team that wants to build a 800-room convention hotel has negotiated with Kansas City leaders for three years to figure out finances for the project.

On the other hand, officials with Kansas City Public Schools and the Kansas City Public Library learned about the project around the same time everyone else did: In early May.

What’s more, KCPS and the library didn’t learn about how various public financing methods would affect their bottom lines until late in the day last Thursday.

With that in mind, library CFO Debbie Siragusa and KCPS director of government relations Kevin Masters were the only two no votes during Tuesday’s Tax Increment Financing Commission of Kansas City meeting on the convention hotel project. They reiterated on Tuesday what The Pitch reported on Monday: They stand to lose money over the next 30 years, due to the public resources being directed to the private development.

A cost-benefit analysis prepared for the TIF Commission showed that the school district would lose $4.7 million over the next 30 years, $779,095 from the library system (more on that in a bit).

An easy majority of TIF Commission appointees gave their approval to a financing plan that would commit roughly $164 million in public sources to a convention hotel at 16th Street and Wyandotte, in the Crossroads Arts District. Tuesday’s vote is the first in several steps required to wrap up the city’s approval for the convention hotel; the Kansas City Council has the final say in the matter.

Siragusa, who is a persistent skeptic of how TIF is handled in Kansas City, asked whether the developers would be willing to offer what’s called payments in lieu of taxes (PILOTs) to offset the library’s and KCPS’s liability from the project.

Roxsen Koch, a real estate attorney representing the hotel’s developers, said they would be happy to discuss the matter with the taxing jurisdictions.

But with Tuesday’s vote, the library and school district lose some of their leverage in those after-the-fact negotiations.

“Based on that, I don’t think the developer or the city has any reason to talk to the taxing jurisdictions in any tangible way,” Masters tells The Pitch.

“You know what we want?” Siragusa says. “The same thing we’ve wanted all along — 50 percent. Take half our money.”

Cindy Circo, Kansas City’s mayor pro tem and chairwoman of the TIF Commission, disputes the taxing jurisdiction’s contention that the city has negotiated in total darkness with the hotel developers. She says Kansas City Mayor Sly James has said publicly for years that he didn’t want to put the city’s general fund on the hook for this type of project.

That’s true, but only to an extent. The finer points of the hotel project — where it’s located, how much it costs, what array of tax-increment financing and other public financing plans are involved — were not widely known until late spring.

Even Jackson County representatives were included in negotiations for the project in the months preceding May’s announcement of the hotel. Jackson County, it turns out, will be the big winner in this deal. The cost-benefit analysis indicates that the county will come out $23 million ahead over the next 30 years. That may explain why Jackson County’s representatives to the TIF Commission, who typically tend to complain about the excesses of the city’s TIF program, are in lockstep with the city on this project.

When the analysis surfaced late last week, it showed that the city would make nearly $50 million on the deal. But new details throw that number into question. During Tuesday’s meeting, it was discovered that the analysis didn’t take into account the city’s $35 million contribution to the project through its convention and tourism tax fund. Nor did it include the city’s in-kind contribution of city-owned property upon which most of the hotel will be built.

The city’s $35 million contribution actually comes out to $50 million once bond financing charges are contemplated. Add the $4.5 million worth of land being donated, and the city’s gains, according to the cost-benefit analysis, are arguably washed out.

The TIF Commission’s six city representatives voted in favor of the project. The TIF Commission has 11 members, six of whom are appointed by Kansas City’s mayor. That skews the TIF Commission’s balance in favor of the city — the affected county and school districts get two votes each, while remaining taxing jurisdictions collectively have one vote.