KC Convention Hotel Advances, But Picks Up More Critics June 30, 2015

The plan to build a new 800-room convention hotel in downtown Kansas City moved ahead. In the process, however, it may have picked up some more opponents.
The Tax Increment Finance (TIF) Commission voted 8-2 Tuesday to approve the plan.
Representatives of the Kansas City School District and the Kansas City Public Library, however, raised their concerns.
Operations like school system, libraries and other agencies get a lot of their funding from property taxes. Those agencies are members of the TIF Commission.
The school district says the tax breaks over the life of the deal could cost the school 5 million dollars.
Debbie Siragusa of the Kansas City Public Library system said the TIF Commission seemed to spend more time talking about the potential rate of return to private investors rather than the impact of the lost tax money on schools and libraries.
“The city may be comfortable with that, I won’t give an opinion on that, but we’re not,” Siragusa said.
Attorney Mike Burke, one of the front men for developers said the city block where the hotel is to be built does not produce any real tax money now, so Siragusa’s library and the school system are not losing any money.
Under the terms approved by the TIF Commission today, the city contributes $35 million to the plan over the life of the deal. Burke says the money will come from convention and tourism taxes, not the city”s main budget, its General Fund.
Kansas City will also donate the land it owns near the convention for the 800-room hotel.
The terms also include TIF development deal for 23 years, directing it’s economic activity taxes back into the project; a Super TIF for 30 years.
The developers also met the ‘ but for”, requirement of the deal. That requires developers to prove the project cannot succeed ‘ but for’ the support of the city.
An analyst, Tom Denaway said without the city’s involvement in the plan the rate of return on the hotel project would be about 2%. With the city involved, it is over 12%.
“Nobody is going to invest in a $310 project with a 2% potential return,” said Denaway.
Patrick Tuohery of the show-Me Institute also criticized the city for rushing in to support the plan.
“it’s not a matter of do we build a hotel or do we not build a hotel? It’s do the taxpayers have to subsidize a hotel? And there are so many greater needs in Kansas City.