Economic development in Kansas City can seem like its own language: LCRA. TIF. PIEA. EEZ. The acronyms are plentiful enough to make one’s head spin.
Much of the jargon that developers and city officials rattle off so freely relates to tax incentives. Broadly speaking, those are programs designed to spare developers from paying certain taxes on their projects.
The use of tax incentives, also referred to as tax breaks, has been criticized in Kansas City and nationwide for being too generous to developers who may not need them.
What are all the tax incentives and agencies that make up Kansas City’s development process? The Kansas City Beacon provides a guide:
Who’s in charge of Kansas City tax incentives?
Kansas City’s Economic Development Corp. is the primary agency that oversees the tax incentive programs available to developers.
Dan Moye, who oversees two incentive programs at the EDC, said the organization tries to be an asset and tool for developers.
“Everything would touch the EDC in some manner,” he said.
Port KC is another local governmental body involved in development. Its focus includes development along the Berkley Riverfront — the location of a newly proposed soccer stadium. Port KC can issue bonds and enter into contracts to develop the land in that area, near Kansas City’s River Market commercial area.
Click on an incentive to jump to that section:
Land Clearance Redevelopment Authority (LCRA)
Who oversees it?
This program was established through state law and is Kansas City’s urban renewal agency. It’s overseen by a board of four people appointed by the mayor. Project applications are reviewed by the board and LCRA staff. Meetings are open to the public.
What incentives does it offer?
- 75% of a real property tax abatement on property improvements for up to 10 years
- Land assembly
- Help acquiring property, including using eminent domain (laws that allow the government to obtain ownership of land)
- Bond financing
- Help with clearing liens on properties
Requirements
- Project must be within an Urban Renewal Area and follow the rules set out in the Urban Renewal Plan. Urban Renewal Area districts in Kansas City include Columbus Park near the River Market, the Crossroads district downtown and Oak Park in the east. The full map of Urban Renewal Areas can be found on Parcel Viewer.
- If a project is not in a designated Urban Renewal Area, LCRA staff prepares a study to determine whether the project is in a blighted or unsanitary area. The City Plan Commission also looks at the blight study. The City Council has final say.
Opportunity Zones
Who oversees it?
This is a federal program administered by the U.S. Treasury Department.
What incentives does it offer?
This program allows investors to invest in projects in designated opportunity zones and receive tax breaks on eligible capital gains.
What are the requirements?
Opportunity Zones were established by Congress in 2017 to encourage investment in low-income communities. State and local governments choose which census tracts participate in the program — 32 tracts in Kansas City are eligible. They include the Blue Valley neighborhood, northeast Kansas City, the 18th and Vine district, neighborhoods east of Troost Avenue and Swope Park.
Planned Industrial Expansion Authority (PIEA)
Who oversees it?
A 15-member board of Kansas City residents. Meetings are open to the public.
What incentives does it offer?
- Tax abatement for up to 25 years
- Exemption on sales taxes on construction materials
- Ability to use eminent domain
What are the requirements?
Projects must be in the PIEA’s planning area, which includes portions of downtown, the West Bottoms and areas east of Troost Avenue (To see all PIEA areas in Kansas City, go to Parcel Viewer online, and under the Layers pull-down menu, click on PIEA.)
Tax Increment Financing (TIF)
Who oversees it?
A board with members representing Kansas City and Jackson, Clay and Platte counties, and school districts within those counties. The commission chooses which project applications to recommend to the Kansas City Council, which has final approval.
What incentives does it offer?
Abatement on future property taxes to finance construction of and improvements on the project.
What are the requirements?
Projects must be in a designated TIF district. Districts include the River Market, areas east of Troost Avenue and a section of the Country Club Plaza. The full map of TIF districts can be found on Parcel Viewer.
Kansas City ordinances state that TIF incentives can be used only for redevelopment projects that would not be feasible without public assistance. TIF districts are also considered blighted areas. Proposed projects must undergo a cost-benefit analysis.
Chapter 353
Who oversees it?
A four-member board appointed by the mayor. Meetings are open to the public.
What incentives does it offer?
Developers can receive a property tax abatement of up to 75% over 10 years and 37.5% over 15 years.
What are the requirements?
Developer proposals go to a review committee, which determines whether a tax abatement is appropriate. The developer then creates a Chapter 353 plan that includes a tax impact analysis. If changes to land use or zoning are necessary, the plan goes to the City Plan Commission and then to City Council.
Enhanced Enterprise Zone (EEZ)
Who oversees it?
A nine-member board, with representation for each enhanced enterprise zone.
What incentives does it offer?
Proposed projects can receive a 50% property tax abatement over 10 years.
What are the requirements?
Proposed projects must be in Enhanced Enterprise Zones. Kansas City has three: parts of the Northland, parts of midtown and southwest Kansas City, and neighborhoods in east Kansas City.
Developers must invest a minimum of $100,000 in the enterprise zone and must create at least two full-time jobs. The average annual wage for new employees must be at or above 80% of the county average wage.
Industrial Development Authority (IDA)
Who oversees it?
A board of six Kansas City residents appointed by the mayor. The program is established by the city, which can issue bonds to finance business projects.
What incentives does it offer?
This program uses revenue bonds or general obligation bonds to finance a qualifying development project. A revenue bond is a municipal bond supported by the money generated by a specific project, like a highway toll. A general obligation bond, or GO bond, is another municipal bond but acts as a loan — it’s backed by the specific taxing jurisdiction, like the city. The use of GO bonds to fund a project must be approved by two-thirds of voters.
Proponents of GO bonds say the revenue generated by the project should be enough to pay off the loan, or debt.
What are the requirements?
Applicable projects include public projects like warehouses, distribution facilities, office buildings, hospitals and industrial plants, according to the Missouri Department of Economic Development and the Kansas City Economic Development Corp.
