Although it’s nothing new, questions and criticisms of development incentives like Tax Increment Financing (TIF) usually involve stereotypes about “greedy developers” and “taxpayer rip-offs.” Although each case is unique, several Northland projects tell a different story – a story the EDC sees firsthand on a regular basis.
Two of the most visible examples are the Chouteau/I-35 Project and the Shoal Creek Parkway TIF projects, both launched in the early 2000s.
The two projects are very different but also share significant similarities. The Chouteau/I-35 project involved a visibly blighted area along Chouteau Trafficway, including an unstable former lakebed. Although the area was immediately south of I-35 and theoretically a valuable location, it faced several roadblocks to development. Portions of the area were unstable due to haphazard efforts to fill the lakebed, some of the area was within a 100-year floodplain, an old gas station leaked contaminates and the old highway interchange created traffic problems that made development impractical.
Empty Spaces
The Shoal Creek Parkway TIF Plan seemed a more pristine area, but that was a big part of the problem. Virtually nothing beyond rural gravel or chip-and-seal roads existed in the region. Other infrastructure was equally limited. The area was so isolated, it had been proposed as the site for a massive, regional landfill.
In both cases, TIF was used to jumpstart infrastructure solutions and spur development – a focus typical of many TIF projects. Even where traditional blight was absent, other obstacles had proven impossible to overcome, and key areas remained undeveloped and paying only minimal taxes.
What’s also notable is the domino effect the initial TIF developments brought about. TIF solved the initial problems and helped create a viable commercial development, but then those improvements drew additional investment even beyond the project areas.
Domino Effects
The old Chouteau Trafficway corridor south from I-35 is a good example. “Featuring” a men’s club and other businesses, it was also a narrow bottleneck to what was becoming a major Northland connection with Jackson County. The TIF project led to widening of the strategic roadway and brought curbs, gutters and even a park with a fountain, statue and other landscaping, along with sidewalks and a bike trail.
The most dramatic spinoff of the Chouteau/I-35 project may have involved housing. The original plan included use of TIF funds in the Winnwood-Sunnybrook and Chaumiere neighborhoods to implement a program focused on improving housing conditions. It’s possible to drive down I-35 and see no hint of this, but for scores of families in the area, the impact has been dramatic.
Still More
One of the oldest Clay County examples involves the almost unbelievable Briarcliff West development. Thirty years ago, the area was a largely abandoned rock quarry with an assessed valuation of less than $850,000, despite a strategic location on a four-lane highway and overlooking North Kansas City and the Kansas City skyline. Today, with some of the Northland’s most valuable real estate, Briarcliff is now valued at almost $63 million, generating nearly $100 million in new tax revenues. The TIF will be paid off next year.
Another, more recent example involves Costco warehouse at Platte Purchase Drive and Highway 152. Like other efforts, this TIF financing focused on up to $59 million worth of public infrastructure work at the site and, like the Chouteau effort, created a domino effect felt far beyond that property, including large developments in both Clay and Platte counties.
None of this is to say all incentive efforts are good or without problems, but TIF programs also include layered checks and balances. Among these are hearings and other avenues where members of the public or school officials can question tax formulas and other elements. These can and do lead to changes in TIF plans.
