COMMITTEE SUBSTITUTE FOR ORDINANCE NO. 140287

 

Amending Chapter 74, the Kansas City Redevelopment Ordinance, by adding a new Article VI, Urban Agricultural Zones, to guide City processes in the implementation of Section 262.900 of the Revised Statutes of Missouri.

 

WHEREAS, Section 262.900 RSMo (the “UAZ Act”), authorizes the City to establish various types of urban agricultural zones throughout the City for the purposes of promoting the local production of produce or other agricultural products, raising and processing of livestock or poultry, and sale of predominantly locally grown foods on blighted land; and

WHEREAS, the UAZ Act authorizes the City to offer certain economic incentives; and

WHEREAS, the UAZ Act provides the City broad discretion in determining which urban agricultural zone projects should be implemented and the duration of the incentives; and

WHEREAS, the City desires to codify standards to guide the City’s staff in implementing the UAZ Act and ensuring that the desired outcomes are attained, which outcomes include, but are not limited to, redeveloping or reusing idle and/or blighted urban properties, promoting innovation in agriculture and sustainable land use practices, eliminating food deserts, creating urban agriculture employment opportunities, expanding local agriculture-related business, and improving access to locally grown, processed and marketed healthy foods; and

WHEREAS, the Urban Agricultural Zone Advisory Commission as established by Ordinance No. 130983, As Amended, met for the purposes of studying these issues and making its recommendation to the City Council by way of this ordinance; and

WHEREAS, the City Council believes that this should be but the first step in incentivizing urban agriculture and that additional incentives should be considered and used to further the desired outcomes set forth herein; and

WHEREAS, the City Council would be supportive of amendments to the UAZ Act that would authorize additional incentives and provide for a single urban agricultural zone board in lieu of multiple UAZ-specific urban agricultural zone boards, and which single board would serve as a central coordinating and facilitating entity for urban agriculture projects; NOW, THEREFORE,

BE IT ORDAINED BY THE COUNCIL OF KANSAS CITY:

Section 1. That Chapter 74, Code of Ordinances of the City of Kansas City, Missouri, is hereby amended by adding a new Article VI, to read as follows:

 

Sec. 74-200. Title of article.

 

This article shall be known as the Urban Agricultural Zone ordinance.

 

Sec. 74-201. Definitions.

 

(a) The following words, terms and phrases, when used in this Article, shall have the meaning ascribed to them in this section, except where the context clearly indicates a different meaning:

 

(1)               Agricultural products – an agricultural, horticultural, viticultural, or vegetable product, growing of grapes that will be processed into wine, bees, honey, fish or other aquacultural product, planting seed, livestock, a livestock product, a forestry product, poultry or a poultry product, either in its natural or processed stated, that has been produced, processed or otherwise had value added to it in Missouri.

 

(2)               Blighted area – an area of the City which the City Council determines that by reason of age, obsolescence, inadequate, or outmoded design or physical deterioration has become an economic and social liability, and that such conditions are conducive to ill health, transmission of disease, crime or inability to pay reasonable taxes.

 

(3)               Director – the Director of City Development or his designee appointed for purposes of performing any obligation assigned to the director by this Article.

 

(4)               Grower UAZ – a UAZ that is (1) a qualifying small business approved by the Missouri Department of Agriculture, unless otherwise exempted as provided in Section 74-208 of this Article, and (2) engaged in growing produce; producing value added agricultural products; raising laying hens (not to exceed 50); raising broiler chickens (not to exceed 650); raising cattle, calves, sheep, swine, ratite birds including but not limited to ostrich and emu, llamas, alpaca, buffalo, elk documented as obtained from a legal source and not from the wild, goats, or rabbits raised in confinement for human consumption (not to exceed 30 collectively); or raising aquatic products as defined by Section 277.024, RSMo (no limit).

 

(5)               Locally grown – an agricultural product that was grown or raised in one or more of the following counties as dictated by the county in which the UAZ is located:

 

Jackson County, MO UAZ: Jackson County, MO; Clay County, MO; Ray County, MO; Lafayette County, MO; Johnson County, MO; Cass County, MO; Wyandotte County, KS; and Johnson County, KS.

 

Platte County, MO UAZ: Platte County, MO; Buchanan County, MO; Clinton County, MO; Clay County, MO; Wyandotte County, KS; Leavenworth County, KS; and Atchison County, KS.

 

Clay County, MO UAZ: Clay County, MO; Platte County, MO; Clinton County, MO; Ray County, MO; Jackson County, MO; and Wyandotte County, KS.

 

Cass County, MO UAZ: Cass County, MO; Jackson County, MO; Johnson County, MO; Henry County, MO; Bates County, MO; Miami County, KS; and Johnson County, KS.

 

(6)               Processing UAZ – a UAZ that (1) meets federal and state processing laws and standards, (2) is a qualifying small business approved by the Missouri Department of Agriculture, and that (3) processes, for human consumption, any one or more of the following and which shall have been located in the State of Missouri or within 250 miles of the Processing UAZ for not less than ninety (90) consecutive calendar days or the entirety of its life, whichever is shorter, immediately preceding slaughter: Any domesticated bird intended for human consumption, cattle, calves, sheep, swine, ratite birds including but not limited to ostrich and emu, aquatic products as defined by Section 277.024, RSMo, llamas, alpaca, buffalo, elk documented as obtained from a legal source and not from the wild, goats, or rabbits raised in confinement for human consumption.

 

(7)               Qualifying small business – a business meeting the smallest size standard applicable to any financial assistance program as established by 13 CFR 121.301.

 

(8)               UAZ Act – Section 262.900, RSMo, as the same may be amended from time to time.

 

(9)               UAZ eligible area – any area located wholly within the corporate boundaries of the City of Kansas City, Missouri.

 

(10)           Underutilized urban parcel – a parcel of land that has been:

 

a.                   vacant or had less than thirty-five percent (35%) of the real property and improvements thereon, if any, utilized to their highest and best use for at least three (3) continuous years; or

 

b.                  a lot owned by the City and which the City has identified as being available for urban agriculture use; or

 

c.                   an economically obsolescent, outdated or failing parcel of land, and which is either:

 

                                                                    i.                        Located in a census tract or within one mile of a census tract having a poverty rate of twenty percent (20%) or greater or a median family income at or below eighty percent (80%) of the Kansas City Metropolitan Statistical Area’s median family income as measured by the most recent American Community Survey; or

 

                                                                  ii.                        Located in a census tract in which at least five hundred (500) persons or thirty-three percent (33%) of the population live more than one mile from a supermarket or large grocery store as measured by the most recent American Community Survey.

 

(11)           Urban agricultural zone (UAZ) – an area containing one or more Grower UAZs, Processing UAZs, Vending UAZs, or any combination thereof.

 

(12)           Value added agricultural products – any product or products that are the result of:

 

a.                   Using an agricultural product grown in Missouri to produce a meat or dairy product, intended for human consumption, in Missouri;

 

b.                  A change in the physical state or form of the original agricultural product;

 

c.                   An agricultural product grown in Missouri which has had its value enhanced by special production methods such as organically grown products; or

 

d.                  A physical segregation of a commodity or agricultural product grown in Missouri that enhances its value such as identity preserved marketing systems.

 

(13)           Vending UAZ – a UAZ that (1) is able to accept food stamps under the provisions of the Supplemental Nutrition Assistance Program as a form of payment, (2) is a qualifying small business approved by the Missouri Department of Agriculture for a UAZ vendor license, and that (3) sells no less than seventy-five percent (75%) locally grown produce, locally grown value added agricultural products, or locally grown edible portion or part of any domesticated bird intended for human consumption, cattle, calves, sheep, swine, ratite birds including but not limited to ostrich and emu, aquatic products as defined by Section 277.024, RSMo, llamas, alpaca, buffalo, elk documented as obtained from a legal source and not from the wild, goats, or rabbits raised in confinement for human consumption.

 

 

Section 74-202. Location of UAZ

 

A UAZ shall fall, in whole or in part, within the UAZ eligible area and include one or more underutilized urban parcels within its boundaries.

 

Sec. 74-203. Application.

 

(a) The application to establish a UAZ shall be in such form as the Director may elect to require, but shall include, at a minimum, the following:

 

(1)               An identification of the type(s) of UAZ the applicant is seeking to establish.

 

(2)               An identification of the specific agricultural products that the applicant seeks to grow, process or vend.

 

(3)               The number of jobs anticipated to be created.

 

(4)               The duration of the ad valorem tax abatement being requested.

 

(5)               Verification of Missouri Department of Agriculture approval, if applicable.

 

(6)               Confirmation that the applicant currently possesses the ability to control the site through ownership or leasehold interest.

 

(7)               A business plan containing sufficient information to enable a meaningful consideration of the proposed UAZ’s viability.

 

(8)               Such financial records as may be required for purposes of establishing that the applicant is a qualifying small business and has a viable plan of financing the implementation of the UAZ.

 

(9)               Identification of the site improvements the applicant proposes to make and a timeline for the same.

 

(10)  Identification of those factors that the applicant reasonably believes support a determination of blight and substantiating documentation demonstrating the presence of such factors;

 

(11)  Written consent of the owners of all the real property included within the proposed UAZ; and

 

(12)  If the applicant is proposing to establish a Vendor UAZ, documentation that the applicant currently possesses a UAZ vendor license and the ability to accept food stamps under the provisions of the Supplemental Nutrition Assistance Program as a form of payment in selling products to consumers.

 

(13)  An identification of the objectives the proposed UAZ seeks to further, which shall include one or more of the following: redeveloping or reusing idle and/or blighted urban properties, promoting innovation in agriculture and sustainable land use practices, eliminating food deserts, creating urban agriculture employment opportunities, expanding local agriculture-related business, engaging in community outreach to promote healthier lifestyles and safe and organic gardening practices, and improving access to locally grown, processed and marketed healthy foods.

 

(b) The City or such entity as the City may elect to contract with for purposes of assisting it in matters of economic development shall review the application, determine its sufficiency and apprise the applicant of any changes that are required as a condition of its further processing or approval.

 

Sec. 74-204. Joint applications permissible.

 

One or more businesses may submit a joint application to establish a UAZ that is proposed to include more than one specific type of UAZ. The application shall identify each business by reference to a specific type of UAZ. The sufficiency of the application shall be separately determined with regard to each specific type of UAZ.

 

Sec. 74-205. Mixed-use UAZ.

 

(a) A UAZ shall not be required to include more than one specific type of UAZ for approval. Notwithstanding the foregoing, a business may elect to apply for designation as more than one specific type of UAZ, and the requirements applicable to the specific type of UAZ shall be applied in determining which designations, if any, may be approved. The sufficiency of the application shall be separately determined with regard to each specific type of UAZ.

 

(b) The non-existence or denial of status as a specific type of UAZ shall not impair a business in its lawful operation. For purposes of illustration only, and without limitation, a business approved as a Grower UAZ but otherwise not seeking approval or qualified to be approved as a Processing UAZ or Vending UAZ shall not be precluded from lawfully processing or selling its agricultural products.

 

Sec. 74-206. Prioritization of Grower UAZs; excluded activities.

 

(a) The City encourages the use of Grower UAZs in a manner that primarily supports the expanded availability of healthy foods intended for human consumption. Uses which would result in the production of non-edible agricultural products may be permitted but shall be subjected to increased scrutiny consistent with the objectives of this Article and may receive a shorter term of ad valorem property tax abatement, if approved.

 

(b)   The following uses shall be excluded within any Grower UAZ:

 

(1)               The raising of fish or livestock not intended for human consumption.

 

Sec. 74-207. Seventy-five percent locally grown; Vending UAZs.

 

(a) Not less than seventy-five percent (75%) of the agricultural products sold by a Vending UAZ shall be locally grown.

 

(b) Value added agricultural products shall be regarded as being locally grown only if not less than seventy-five percent (75%) of any components therein were locally grown.

 

(c) For purposes of determining whether the seventy-five percent (75%) threshold has been satisfied, sales shall be measured by the volume or weight of the agricultural products sold consistent with industry standards.

 

Sec. 74-208. Small business; Missouri Department of Agriculture approval.

 

Notwithstanding Section 74-201(a)(4) of this Article, a Grower UAZ shall not be required to be a small business approved by the Missouri Department of Agriculture provided the UAZ includes one or more Processing UAZs or Vending UAZs, each of which satisfies such requirements.

 

Sec. 74-209. Blight required.

 

(a) No UAZ shall be established unless the area included therein is a blighted area.

 

(b) The existence of blighting factors shall be verifiable and substantiated by either a blight study provided by a third party or by other data sufficient for such purposes. Existing blight declarations under any other provision of law or blight studies related thereto may be utilized for such purposes to the extent a predominance of the blighting factors identified therein continue to exist.

 

(c) The determination of blight may be made at any time prior to receipt of an application to establish a UAZ or contemporaneous with the ordinance establishing the urban agricultural zone board provided for by Section 74-210 of this Article.

 

Sec. 74-210. Establishment of UAZ board; hearing.

 

(a) If an application is determined to be eligible for UAZ designation under the provision of this Article and the UAZ Act, then the Director shall introduce an ordinance to establish an urban agricultural zone board. If blight has not yet been determined, such ordinance shall also include provisions for making such determination.

 

(b) Upon approval of the ordinance, the urban agricultural zone board shall be deemed established and its members shall be appointed in such manner and for such terms as provided by the UAZ Act.

 

(c) The urban agricultural zone board shall fix a time and place for public hearing and notify each taxing jurisdiction located wholly or partially within the boundaries of the proposed UAZ. The board shall send, by certified mail, a notice of such hearing to all taxing districts and political subdivisions in the area to be affected and shall publish notice of such hearing in a newspaper of general circulation in the area to be affected by the designation at least twenty days prior to the hearing but not more than thirty days prior to the hearing. Such notice shall state the time, location, date and purpose of the hearing. At the public hearing any interested person or affected taxing district may file with the board written objections to, or comments on, and may be heard orally in respect to, any issues embodied in the notice. The board shall hear and consider all protests, objections, comments, and other evidence presented at the hearing. The hearing may be continued to another date without further notice other than a motion to be entered upon the minutes fixing the time and place of the subsequent hearing.

 

Sec. 74-211. Ordinance designating UAZ.

 

(a) An ordinance designating a UAZ shall not be introduced or considered until the public hearing shall have concluded and the urban agricultural zone board shall have made its recommendation. The City Council shall, if it deems designation of the UAZ advisable, adopt an ordinance providing for such designation. The ordinance shall specify the maximum duration of the tax abatement. If the real property upon which the UAZ will be located is leased, the term of the tax abatement shall not extend beyond the term of the lease as the same may be amended. In no event shall the period of tax abatement exceed twenty-five (25) years.

 

(b) The City Council shall have the discretion to deny or approve such designation with such term of abatement as it shall deem proper notwithstanding the recommendation of the urban agricultural zone board.

 

Sec. 74-212. Tax Incentives.

The portion of real property used as a UAZ designated by the City Council shall not be subject to assessment or payment of ad valorem taxes on real property for such period of time as was specified by the ordinance provided for by Section 74-211 of this Article, except to such extent and in such amount as may be imposed upon such real property during such period, as was determined by the assessor of the county in which such real property is located, in an amount not greater than the amount of taxes due and payable thereon during the calendar year preceding the calendar year during which the UAZ was designated.

 

Sec. 74-213. Water Incentives; Grower UAZs.

A business within any Grower UAZ shall pay such water rates and costs as would otherwise be applicable to such business, provided however that the Director of Water Services may, subject to the availability of funds for such purposes, establish and administer, or cause to be administered, a program whereby a business within a Grower UAZ may apply for and, if approved, receive funds that may be applied by such business to offset any amounts otherwise due.

 

Sec. 74-214. Sales taxes.

 

Local sales taxes received from the sale of any agricultural product within the boundaries of a UAZ shall be directed, deposited and utilized in accordance with the UAZ Act.

 

Sec. 74-215. Annual reporting.

 

(a) Those businesses within a UAZ shall submit an annual report to the Director no later than May 1 of each calendar year. The report shall be in such form as the businesses within the UAZ may elect to submit, but shall contain sufficient information to enable the Director to determine whether the businesses within the UAZ complied with the requirements imposed on them by this Article and the UAZ Act and whether they continue to maintain eligibility under the standards applicable to their specific type of UAZ. The failure to submit an annual report within sixty (60) calendar days of its due date shall constitute grounds to terminate a UAZ, in whole or in part.

 

(b) The receipt and acceptance of an annual report shall not act as a waiver by City of any violation of this Article or the UAZ Act nor shall it preclude the City from enforcing any clawback, terminating a UAZ, or taking any other action permitted under law with regard to a UAZ.

 

Sec. 74-216. Clawback.

 

If the Director determines that any business has violated the provisions of this Article or the UAZ Act in such a manner as to render the real property ineligible for the ad valorem property tax abatement, the City shall be entitled to recoup from the business the entirety of the ad valorem property taxes that would have otherwise been due and payable but for their abatement. Any sums collected shall be distributed pro rata to the relevant taxing jurisdictions. This provision shall not be construed in manner that would limit any other lawful remedies otherwise available to City.

 

Sec. 74-217. Ongoing review.

 

(a) The Director shall review the operations within a UAZ no less than once every five years commencing with the designation of a UAZ, or with such additional frequency as the Director may elect to require. Those businesses within the UAZ shall make their records available within ten (10) days of written notice.

(b) The Director shall have the right to conduct on-site inspections of any business within the UAZ during regular business hours for purposes of reviewing its compliance with this Article and the UAZ Act.

 

Sec. 74-218. Termination.

 

The designation as a UAZ and the benefits flowing therefrom shall expire at such time specified in the ordinance designating the UAZ, which period shall not exceed twenty-five (25) years. Notwithstanding the foregoing, the City Council may, by ordinance, dissolve the UAZ, in whole or in part, at any point in time if it determines that the UAZ, or any portion thereof, is not in compliance with the requirements of the UAZ Act or the provisions of this Article, or is otherwise no longer in the City’s best interests. The approval of a UAZ shall not create any legally cognizable interest in the continuation of a UAZ or any portion thereof.

 

Sec. 74-219. Laws applicable.

 

A UAZ shall comply with all federal, state and local laws applicable to the business activities engaged in by the UAZ. Nothing in this Article shall be construed as waiving or otherwise modifying any requirement imposed by any other provision of law.

 

Sec. 74-220. Severability.

 

If any portion of this Article is held to be invalid, that portion is deemed severed from the other provisions and the remainder of this Article shall be valid.

 

_____________________________________________________

 

Approved as to form and legality:

 

 

_______________________________

Brian T. Rabineau

Assistant City Attorney