What's $4 Million Among Friends?
 By Mark ForsytheThe Kansas City Post Kevin Collison reports in the Kansas City Star that Andrews McMeel Universal is seeking around $4 million in TIF to move from their posh digs on the Country Club Plaza to the Boley Building at 12th & Walnut. Those of you familiar with downtown might remember the Boley Building was at one time being prepared to house Aquila's doomed energy trading business. The interior of the building had been stripped to its concrete superstructure in preparation for its modernization. The Star article quotes Bill Dietrich, president and CEO of the Downtown Council as saying that TIF "would be a very wise investment." This is not news that Mr. Dietrich would take such a definitive position before a business justification has even been presented. The Downtown Council has a rich history of advocating "development at any cost" regardless of the consequences. Has the DTC ever met a TIF deal they didn't like? The article then goes on to point out some very interesting facts. Andrews McMeel is being represented by none other than Jerry Riffel, elite development attorney and chairman of the Downtown Council's Business Retention and Attraction Committee. The owner of the Boley Building is Copaken, White & Blitt, whose principal Jon Copaken is a DTC executive director as well as chairman of the Downtown Council's Downtown Marketing Group. It seems like this deal was hatched at the coffee machine during a break of a DTC meeting. Andrews McMeel's argument is they need the taxpayers' money to pay for renovations to the historic building. That's an interesting argument but it doesn't hold much water in my opinion. AMU does not own the building. They are going to purchase it from Copaken, White & Blitt. How can you ask for subsidies to "make the numbers work" on a property you do not own? Easy. The seller jacks up the purchase price by the amount of the subsidy. The handout is whatever the amount the seller decides to overcharge by. In this case, it's obvious that AMU feels the building purchase price is too high, by about $4 million. The last time I checked, we still live in a market economy. If the Boley Building is not viable at the asking price, then the asking price needs to be lowered. This is not graduate level finance. A property is only worth what a buyer is willing to pay, not what a buyer is willing to pay plus $4 million from the taxpayers. This situation has all the markings of a classic TIF deal. Inflated prices, friends and associates on both sides of the deal, and what the principals hope is a City Council beholden to the large amounts of campaign contributions coming from DTC members. Even if the TIF Commission denies this request, I have no doubts it will be appealed to the full Council. Then and only then will we get our first indication of what we have elected. A new era of leadership at City Hall, or business as usual. |
posted by Mark at 2:20 PM
Comments on "What's $4 Million Among Friends?"
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Brent said ... (3:26 PM) :
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Mark said ... (3:33 PM) :
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Michelled said ... (4:10 PM) :
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Ryan said ... (10:57 PM) :
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Anonymous said ... (8:37 AM) :
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Mark said ... (9:02 AM) :
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mainstream said ... (2:29 PM) :
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Bob Asher said ... (6:15 PM) :
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Dot said ... (2:38 PM) :
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not dot said ... (3:15 PM) :
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DaveKCMO said ... (4:19 PM) :
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the wife said ... (11:00 AM) :
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Anonymous said ... (10:54 AM) :
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Michelled said ... (9:51 AM) :
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Dot said ... (1:32 PM) :
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Mark said ... (1:43 PM) :
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Michelled said ... (5:53 PM) :
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Joe Medley said ... (7:13 PM) :
post a commentMark, I'd like to sell you my home for about $4.2 million. I figure it's probably worth about $200,000 -- especially with the upgraded electricity from the potential new KCP&L substation in my back yard. No power outages ever! We'll get the taxpayers to cover the overage and we'll be set.
Perfect analogy Brent. I overpay for something and expect the taxpayers to cover my mistake. Or even worse, I know up front it's a mistake but I don't care because the seller is pocketing the cash and in the end the only loser is the poor taxpayer.
So will we have to hand over some more TIF for the folks to remodel the Plaza building they move out of?
Even if the renovation project was TIF worthy - what is in it for KCMO? So we're moving jobs/tax revenue from the Plaza to Downtown? Other than the obvious corruption, what am I missing here? We're not even stealing jobs from Overland Park?!
There's a growing number of people who will support any boneheaded TIF deal, either because they bought a loft downtown and will happily use other people's tax money to attempt to increase their property value, or because they have a bizarre "small man" type inferiority complex about downtown specifically or Kansas City in general. Very sad.
what is the address? are they pay any property taxes now? what is the market value now?
anonymous 9:37AM,
The address is 1130 Walnut but I believe that entire block is platted together so an individual property tax bill probably doesn't exist.
paintman,
The DTC is a private organization funded by contributions from its members. The City has no authority over it.
michelled,
You're not missing anything. The only thing you're going to be "missing" is your share of the $4 million going into this thing.
What a shame, I've seem some pretty kick ass art shows in the Boley Building. Shame to lost the space. David Hughes and the Urban Art Project has done some wonderful things in that building.
I for one am not a bit surprised to hear about this deal, but come on... really?
I read an old post somewhere way way back about the very first use of TIF where downtown businesses were getting tax breaks to move to the Plaza. I think that was the Board of Trade deal, if memory serves.
Ironic how the more things change, the more they stay the same.
I would say that what we need to all be brainstorming now is a new way to get some tax revenue out of all of the new (TIF'd) downtown loop development that is outside of the (already-abated) property tax structure. Something like a "stamp tax" or a "tea tax" or something abstract like that. Give 'em all big property tax breaks and then in a couple of years after all of the development is done and the city and school district is broke, jack 'em up with some new taxes.
After AMU and everybody else moves BACK to the Plaza or the suburbs or whereever they can get more public subsidy, we'll once again have a bunch of great empty building stock to move back in to (at market rate, BTW) and revitalize just like the Crossroads is doing now...
Mark, you should really cut those developer's a break.
Hmmm, strike that.
Here's what I'm trying to say:
If your child asks you if they can have YET ANOTHER candy bar, is your response "shut up, you self destructive, narcisstic idiot with absolutley no common sense!!" ??
No, that would not be your response. You would think to yourself "if I give my kid another candy bar, I'll be doing the wrong thing".
That would be your response because you can't blame your kid for being a kid, but you can blame yourself for acting inappropriately, because you are the authority, the person in charge to make sure things go ok.
Same deal with developers - they can ask for anything, because they're developers. It's simply the city's job to be the adult here.
So let's spend our time strongly urging the city to act responsibly, and gently urge those developers to act a little bit more grown-up.
After all, these developers have been more-or-less trained over a period of years, by the people in charge, that they can ask for and get fairly ridiculuous things.
Too bad its a bunch of children running the city...
Now, about that candy bar... But a good point, nonetheless.
And don't even get me started bitching about voters not electing people who are actually qualified for their positions. That's pretty much why Mark didn't make the primary, I believe.
Funk or The Funk promised an end to this type of deal. And under any interpretation of what he claims he actually said, this deal is not far East enough to get a TIF giveaway. All this being said, check his list of contributors both for the general election and for the Inaugural Festival he threw with an interesting and previously spurned bunch of corporate and special interest money.
Anonymous -
By all means, educate yourself on Funk's contributors and policy statements, but don't be so quick to assume this is a done deal.
I've seen no indication that he is on board with this deal. Have you?
...think you're a bit alarmed by not much: Doc's Place seems to be a bit more prgmatic about the whole thing...
dot,
..think you're trolling for traffic to a crappy blog. Tell Doc to come back when he learns how to spell "Funkhouser". "Pragmatic" is not saying everything will be okay because Funk made a campaign promise.
i like the "city as adult" comments. the developers are motivated by profit and the EDC/PIEA have promoted a near-Pavlovian response when incentives are not managed prudently. i'm sure there will be cries about the death of downtown development if this TIF is rejected, but is anyone expecting a different result from the newly elected council?
There's way too much focus here on The Funk, the City Council and the DTC. What we all need to remember is that this TIF project will go nowhere without Mayor Sqitiro's approval.
It seems the whole non-developer, non-politico world has learned their lesson about TIFs.
It will be interesting to see how well this lesson has really been learned when the Queen of TIF, Kay Barnes is on the ballot in November 2008.
Paint - Maybe you should buy a clue that when numerous blogs ban you its because you make ignorant comments...There's a place in this world for everyone - if you want to park your SUV on acres of surface parking PLEASE MOVE TO JOCO!
wow - wasn't 'trolling': thought you might interested in a view other than your own.
i see i was wrong - no biggie...
dot,
I am not "not dot." When I comment I do so as myself.
Sometimes people snipe at each other in the comments section. I pretty much leave everything as is unless it's personal or overly vulgar.
Paint, I'll bite, no I don't. But I don't want to further de(light)rail Mark's TIF post with a snipey ;-) debate over downtown parking. Let's just say I don't agree. I'm sure Mark will post something on the subjects in the near future where you can post a snipey retort for me. :-)
Everyone,
As required by the new city charter, the mayor has appointed a task force to develop an economic development policy. You can find out more about it here: http://www.kcmo.org/finance.nsf/web/edpolicy
and here:
http://kctifed.blogspot.com/2007/06/economic-task-force-named.html
The meetings are at 4:00 every Wednesday until the end of August and they are open to the public. The city's web page on this says that "Public participation is welcome and encouraged." In fact, some friends and I are taking advantage of that invitation and will be presenting some policy recommendations of our own in a couple of weeks.
We feel very strongly that it is not enough to express our feelings about this situation. We have to express those feelings to the right people. I can't guarantee that our actions will have an effect, but I can guarantee that if we do nothing, nothing will change.
You can e-mail the entire task force at this e-mail address: edpolicy@kcmo.org
You can get contact information for the city council at this URL: http://www.kcmo.org/council.nsf/council/home?opendocument