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Legislation #: 150571 Introduction Date: 7/9/2015
Type: Resolution Effective Date: none
Sponsor: COUNCILMEMBER FORD
Title: Declaring the City Council’s expectations for evaluating financial need with respect to the utilization of real property taxes.

Legislation History
DateMinutesDescription
7/9/2015 Filed by the Clerk's office
7/9/2015 Referred to Planning, Zoning & Economic Development Committee
7/15/2015 Immediate Adoption as a Committee Substitute
7/16/2015 Adopted as Substituted

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150571.pdf Authenticated 280K Authenticated
fact sheet.xlsx Fact Sheet 38K fact sheet

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COMMITTEE SUBSTITUTE FOR RESOLUTION NO. 150571

 

Declaring the City Council’s expectations for evaluating financial need with respect to the utilization of real property taxes.

 

WHEREAS, pursuant to the Land Clearance for Redevelopment Authority Law, Sections 99.300 to 99.660 of the Revised Statutes of Missouri, as amended, the City Council of Kansas City, Missouri by Ordinance No. 16120 passed on November 21, 1952, created the Land Clearance for Redevelopment Authority of Kansas City, Missouri (the “LCRA”); and

 

WHEREAS, pursuant to the Planned Industrial Expansion Law, Sections 100.300 to 100.620 of the Revised Statutes of Missouri, as amended, the City Council of Kansas City, Missouri by Ordinance No. 34677 passed on February 9, 1968, created the Planned Industrial Expansion Authority of Kansas City, Missouri (the “PIEA”); and

 

WHEREAS, pursuant to the provisions of Chapter 68 of the Revised Statues of Missouri, as amended, the City Council of Kansas City, Missouri by Resolution No. 47523 adopted on February 11, 1977, created the Kansas City, Missouri Port Authority (the “Port Authority”); and

 

WHEREAS, pursuant to the Real Property Tax Increment Allocation Redevelopment Act, Sections 99.800 to 99.865 of the Revised Statutes of Missouri, as amended, the City Council of Kansas City, Missouri by Ordinance No. 54556 passed on November 24, 1982, and thereafter amended in certain respects by Committee Substitute for Ordinance No. 911076, As Amended, passed on August 29, 1991, Ordinance No. 100089, As Amended, passed on January 28, 2010, Ordinance No. 130986, passed on December 19, 2013, and Committee Substitute for Ordinance No. 140823, As Amended, passed on June 18, 2015, created the Tax Increment Financing Commission of Kansas City, Missouri (the "TIF Commission"); and

WHEREAS, pursuant to the provisions of Sections 100.010 to 100.200 of the Revised Statutes of Missouri, as amended, and the provisions of Committee Substitute for Resolution No. 041033 adopted on September 16, 2004, the City Council of Kansas City, Missouri is authorized to approve the issuance of revenue bonds for the purpose of promoting industrial development through, among other things, the abatement of real property taxes; and

 

WHEREAS, pursuant to Committee Substitute for Resolution No. 121013 adopted on December 20, 2012 and Committee Substitute for Resolution No. 130297 adopted on April 25, 2013, the City Council of Kansas City, Missouri expressed its support for and authorized the use of sale-leasebacks by certain economic development entities as a mechanism for abating, among other things, real property taxes; and

 

WHEREAS, pursuant to the Urban Redevelopment Corporations Law, Sections 353.010 to 353.190 of the Revised Statutes of Missouri, as amended, the City Council of Kansas City, Missouri is authorized to promote urban renewal through the abatement of real property taxes and has, by Committee Substitute for Ordinance No. 140306 passed on May 1, 2014, created the Kansas City Chapter 353 Advisory Board (“353 Board”) and vested it with certain powers in furtherance of such urban renewal efforts; and

 

WHEREAS, the City Council adopted Committee Substitute for Resolution No. 120836 expressing its support for the AdvanceKC Strategic Plan and the related underlying planning process; and

 

WHEREAS, the City Council passed Ordinance No. 120966 adopting the AdvanceKC Strategic Plan as the Economic Development Strategic Plan for the City of Kansas City and directing the City Manager to proceed with supporting the planning and development of the Implementation Phase of the project; and

 

WHEREAS, the Implementation Phase began with the adoption of Committee Substitute for Resolution No. 130274 which provides for a single point of entry for development projects through the Economic Development Corporation of Kansas City, Missouri (the “EDC”); and

 

WHEREAS, Committee Substitute for Ordinance No. 140031, As Amended, adopted the City’s Economic Development and Incentives Policy and directed the City Manager to develop the scoring system set forth therein; and

WHEREAS, the City Manager developed the scoring system and the City Council subsequently adopted the same (the “AdvanceKC Scorecard”) by Ordinance No. 140375; and

WHEREAS, the City is empowered, directly or through one or more of the aforementioned agencies, to offer public incentives for economic development projects in the form of, among other things, a capture and redirection, or abatement or exemption, in whole or in part, of real property taxes; and

 

WHEREAS, the City contracts with the EDC for purposes of managing the City’s economic development projects and providing support to each of the aforementioned agencies, among others; and

 

WHEREAS, it is proper that the City’s policies for granting any approval, directly or through one of the aforementioned agencies, which results in the capture and redirection, or abatement or exemption of real property taxes, take into account the impact of the loss of such revenues on the affected taxing jurisdictions and the extent to which the use of such revenues might be minimized consistent with maintaining a viable economic development project; and

WHEREAS, it is proper that the City Council should declare its expectations with regards to how the EDC administers the tasks assigned to it and evaluates financial need prior to the City Council’s being asked to make determinations with respect to the capture and redirection, or abatement or exemption of real property taxes; NOW, THEREFORE,

 

BE IT RESOLVED BY THE COUNCIL OF KANSAS CITY:

 

Section 1. That the EDC shall not recommend a project to the City Council for the capture and redirection, or abatement or exemption of real property taxes unless the following, at a minimum, shall have occurred.

 

A.    The EDC shall have evaluated the project using the AdvanceKC Scorecard for the purposes of determining the extent to which the project aligns with the City Council’s priorities as set forth therein.

 

B.     The EDC shall have prepared, or caused a third party to prepare, a financial return analysis for the purposes of comparing the leveraged and unleveraged internal rate of return, with and without varying level of incentives, to determine whether and to what extent the project warrants public assistance consistent with incentivizing the project to an appropriate market benchmark.

 

Section 2. That the City Council shall, to the extent permitted by law, retain the discretion to authorize the capture and redirection, or abatement or exemption, in whole or in part, of real property taxes to the full extent authorized by any provision of law, notwithstanding any provision of this resolution to the contrary, and the approval of the City Council with respect to any matter included within this resolution shall serve to conclusively establish that the requirements of this resolution shall have been fulfilled with respect to the matter so approved.

 

Section 3. That the provisions of this resolution shall apply prospectively only and shall not be construed in a manner as to impair any tax abatement, tax exemption, tax capture and redirection, or any transaction related thereto authorized by the City, any agency referenced herein, or any other public entity prior to its adoption.

 

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