Finance, Governance and Public Safety Committee - Regular Meeting

Andrea Boo. I will call the finance governance and public safety committee meeting to order for, Tuesday, April 21. I will ask my, committee members to introduce themselves.

Quentin Lucas, the mayor. West Rogers, 2nd District.

Chris Monrea, 4th District.

Darryl Curls, 5th District At large.

And, we have a few council members, joining. I'll start to my left.

Jolyn Duncan, 6th District.

Kevin O'Neill, city council, 1st District At large.

Melissa Patterson Hasley, 3rd District At Large. Melissa Robinson, 3rd District.

And if staff would introduce themselves.

How are I, city clerk's office.

Tammy Queen, city manager's office.

William Choi, interim director of finance.

Sam Miller, assistant city attorney.

Emily Kahler, assistant city attorney.

Alright. We have one item that we will hold. It is an item that is under held in committee. That is 260071. Mayor, one week?

Let's just hold it one month unless we get something.

Okay. One month. On item two six zero zero seven one. So one month would be, 01/23. 01/02/1934. The May 19?

K. Alright. I would ask the the wait is actually staff was to get appraisals information, and some of that's wanting. And so we'd love direction from the manager's office as to what plans, if any, exist

with them. Understood.

Thank you.

Alright. Mister Clark, we can start at the top of the agenda.

260356, authorizing the manager of procurement services to execute a $2,125,000 three year contract with the Environmental Services Research Institute Incorporated to provide GIS software and maintenance services authorizing the manager of procurement services to amend the contract appropriating from the unappropriated fund balance of the information technology reimbursable services fund and recognizing this ordinance is having an accelerated effective date.

Good morning. Good morning. Keely Golden, procurement services. I also have with

me Mike Newhouse, the chief city's chief technology officer with me.

Good morning.

This ordinance is for the city's enterprise agreement with, Environmental Systems Research Research Institute, Esri, for citywide geographic information systems, or GIS services. EV4428 is a three year contract, which starts 05/01/2026, in the amount of $2,125,000 We do have Joe Ekman from Esri with us in the audience today. We are asking for an effective accelerated effective date. And now I will turn this over to Mike for further information on the usage of Esri's geographic information system software.

Good morning, everyone. So Esri, the geographical information system, widely known as GIS, is primarily used in about five major areas of the city. Enterprise permitting and licensing, also known as EP and L, the planning, permitting and enforcement services. Cartograph, which is our maintenance of the city assets. Three eleven uses this for the citizens reporting non emergencies, requesting services and asking questions, as well as a tool called Partial Viewer that our citizens as well use for viewing city maps, analyzing locations and searching. And then center line mapping mainly used for 09:11 and accurate navigation for first time responders. We've used this system now for roughly twenty years throughout in the city.

We're happy to answer any questions.

So will Parcel Viewer and the other programs, will they change?

They don't change. They get upgraded on a regular schedule, but the applications themselves don't change.

Okay. Good. So I don't have to learn anything new.

So it's not twenty years old. It's been upgraded through the years, but we've been using the same SRE systems for

that long.

All

right. Are there any questions from the committee? Is there any public testimony for ordinance number two six zero three five six?

No testimony submitted for this ordinance.

Madam chair, I move that ordinance two six zero three five six be reported advanced due passed to the full council.

It's been moved and seconded that ordinance number two six zero three five six be reported out of committee with the recommendation of advance and do pass. All those in favor, please say aye. Aye. Any opposed? The motion passes. Thank you.

60357 authorizing a change order with infrastructure solutions LLC in the amount of 732,659 thousand dollars for the West Bottom bid package two change order one reducing an appropriation in the West Bottom Street Improvement account and appropriating a light transfer to the West Bottoms infrastructure account authorizing the director of general services to execute a five year lease with four options to renew for four for five years each with West Bottom Central Community Improvement District for the operation of a kiosk concession stand located at 1020 Santa Fe Street, Kansas City, Missouri 64101, authorizing the city manager entering into a second agreement to the redevelopment agreement, tax contribution agreement, and cooperative agreement with the TIFF commission in establishing this ordinance as having an accelerated effective date.

Good morning. Abby Brinkley, city planning and development.

John Carroll, city Finance.

So we are here to discuss Ordinance two sixty-three 57. The site that we're talking about today is located in the West Bottoms, specifically on the Northwest Corner Of 11th And Santa Fe Street. Just to give you some background as to this ordinance, we had previous ordinances that approved a predevelopment agreement in the West Bottoms, the ordinance approving the West Bottoms TIF plan and its amendments, an ordinance approving the West Bottoms Central CID, and then also the ordinances that approved contracts to complete public improvements and estimated and appropriated bond proceeds. So this ordinance today is gonna cover four key topics. So it's surrounding the discussion of a kiosk that the city would build, on this public access easement.

So it discusses the lease, agreement authorizations, a change order and account transfers. So the kiosk being discussed today, this is a rendering of it. It's essentially like a restaurant concession stand type of establishment. So, this would be located, again, as I said, on a permanent public access easement. We would be leasing this establishment to the West Fox Central Community Improvement District, who would then be responsible for any and all maintenance and management of the kiosk.

It would be for a five year term with four five year renewal options. The rent would only be $1 a year. The CID would be allowed to sublease the space to a tenant to actually operate the restaurant, and then any rent that the CID receives, they must use to, put back into the improvements that are in the public access easement. So agreement authorization, it would this ordinance would authorize the city manager to enter into these three agreements with the TIFF Commission, which would allow the TIFF Commission to reimbursements to the city for previously budgeted and approved public improvements relating to the West Bottoms TIFF. And then the change order and account transfer account transfer.

So public works would be authorized to execute a change order with Infrastructure Solutions. This is for Samara Road, West Bottoms redevelopment phase two, and it would be utilizing available contingency funds. So that $732,000 would be transferred from West Bottom Street Improvement account to the West Bottom's Public Infrastructure account. And then we just have some additional renderings of that pedestrian plaza, public access easement area with the location of the kiosk, a different angle of the kiosk, and a different angle of the pedestrian plaza area. And then just an update on the other improvements that are ongoing in the West Bottom.

So street reconstruction, which includes new concrete, street lights, sidewalks, etcetera. That's all being coordinated with the water services department because they are also installing new water mains and connections and storm water collection systems. We have a completed a target completion date of November. And then the private improvement side, so Moline Plough, an expected completion date of quarter four this year. Perfection Stove, they're anticipating to start in q four this year and complete in q four next year.

And then the Henning, the Weld Weld redevelopment building, that one, start date for q four this year and completion Q4 in 'twenty eight or 2029. And with that, we would take any questions.

All right. Are there any questions from the committee? Seeing none, is there any public testimony for oh, I'm sorry. Oh, sorry.

Thank you, madam chair. I'm just trying to understand this project. I I like it. It's it's great. How is this was this kiosk in the original development plan, or is this something new? Is anybody here from the from Samira Road to explain how this is a part of the project just so I can get some, hi. How are you? Long time no see. So yeah. How is this the last time we talked, we really were focused on the infrastructure, you know, the massive sewer repairs that needed to happen. And so I'm just trying to understand how this Sure. Came about.

Yeah. So Grant Romis with Samara Road, so representing the entity, the landowner, West Bottoms PropCo master, and then also this West Bottoms Central Community Improvement District. So the the park the park that's contemplated as part of bid package two that staff just went through, that always assumed a food and beverage component that was going to be in the form of a kiosk at the corner. The design team that designed the food and beverage component was different, led by Romano's design group who's represented here. That was lagging behind the design of the actual park improvements.

And so effectively, a small three fifty square foot plot of land was left there as the design was finalized. Until the final budget was settled for the kiosk itself, it's that's that's why this is being added in at this point. Similar to a Marni Allis Plaza or the Roy Blunt Luminary Park, I think, you know, this being no different, I think a food and beverage component as far as being able to activate the public space is really critical here to the vitality of this being a successful park. Also, we see this as an opportunity to recapture some of the income stream to help with events, maintenance, make making sure light bulbs get changed, trash pickup, all of that within the the public easement, which is the park and the kiosk itself.

And so the kiosk is if you could go to the slide that talks about how much it costs. So the kiosk is or what is being redirected in your existing financial package is this $732,000. And so my question is, what's the total cost of the kiosk? And yeah. I guess, what is the total cost of the kiosk? And what are the source of funds, miss Queen, for this $732,000? Where where did that come from? Total cost of the kiosk and where did the city's contribution originate? Which account? Where did it come from?

So that 732,000, that is the total cost of the kiosk. Okay. And then the money came from the contingency fund for this phase of the project. It was originally anticipated, and maybe Randy with Public Works can speak more in-depth on this, but when digging into the roads in the West Bottoms, it was potentially we didn't know what we were gonna be digging up, essentially. And so there was a large contingency fund that is now not being used because we dug down. We didn't find anything, you know, too terrible to increase the budget in that aspect, and there was the available funds then.

Yeah. And councilwoman, not to speak out of turn, but effectively, we had an allowance for the kiosk, not knowing exactly how much it was it was going to cost. And effectively, it's like a design build prog or project in itself. And so we had an allowance that was contemplated as part of bid package two that's now finalized, and now we have foresight into how much it's gonna cost.

Okay. Thank you. And so, again, where did the 700 where where did the contingency fund where did it come from? Which where did this you know, you moved it into a contingency fund for infrastructure in the Samara Road project. You didn't need all of it. You have $732,000 left. You're gonna repurpose it for another use on the project site. And so I'm just trying to understand. Is this general fund? Is this, development services fund? Is this Pilots Eats? Where where did it come from?

It's Yeah. Yeah. So the the city issued bonds too

for Samara Road. How much how much in bonds did the city issue for Samara Road? Can I be reminded of that?

It's 20 is it $28,000,000? Maybe back

27.

27.

27,600,000.

And what underguards those bonds? Is it the restaurant and tourism tax of convention? What TIF revenues. TIF revenues. From

various places. From from this TIF plan?

Economic activity taxes produced by the property itself.

Okay. Alright. Thank you. I'll dig into it further, but thanks. That's helpful.

Alright. Are there any other questions from, councilman Duncan?

Thank you, madam chair. We so because this is the kiosk going to be in the TIF District, any economic activity that it generates is gonna be redirected back into the TIF?

I would need to confirm that it's within a redevelopment project area, but as long as it's within a redevelopment project area, it would be subject to TIF and additional EATS redirection. But, madam chairwoman

Yes.

I would just point out that, and and it's neither here nor there, but if I just point out that a tax redirection is paying for the kiosk. So tax we're paying for the kiosk. We, and then we're charging them a dollar in perpetuity, and then we're using further tax dollars to for the maintenance. And I don't have a problem with the setup. I just wanna say it out loud that they're getting it for a dollar. To my point about the garages, they're getting it for a buck, and we're not sharing in any revenue that might happen. Now it's a little bitty kiosk. It might make $10, you know, so who knows? But I think it's important just to point out the structure of the revenue sharing.

Alright. Okay. Councilman Duncan?

Not a critique, but I do I do like the the kiosk, and I think something like this would be great in, like, a loose park.

What

district is that in again?

That'd be the 6th District, councilman. I

think we're gonna put it on the southern part of the 2nd District. I've heard a loud crowd that nearly.

Are there any other questions? Is there any public testimony for ordinance number two six zero three five seven?

There is no public testimony for this ordinance.

Madam chair, move that ordinance two six zero three five seven be reported advanced and do pass to the full council. Second.

It's been moved and seconded that ordinance number two six zero three five seven be reported of the committee with the recommendation advance and do pass. All those in favor, please say aye.

Aye.

Any opposed? The motion passes.

Two six zero three six three, approving the recommendations of the tax increment finance Commission of Kansas City, Clay County, Missouri as to the four thirty five and Soccer Drive Tax Increment Finance Plan and approving the four thirty five and Soccer Drive Tax tax increment financing plan, approving the city's contribution of additional each guaranteed generated within the redevelopment area of the redevelopment plan and authorizing the city manager to enter into a tax contribution and distribution disbursement agreement with the Kansas City TIF commission and land reserve incorporated.

SPEAKER Proceed. Go ahead.

Good morning, Madam Chair, Mayor Lucas, members of the committee, staff, thank you for having me here today. My name is David Leader. I work for the economic development corporation of Kansas City, Missouri, and I'm here on behalf of the TIFF Commission to present for your consideration the four 35 and Soccer Drive tax increment financing plan. Howard, just for your Okay. Yes. So I will give a quick nuts and bolts presentation. After my presentation, I will invite Ken Jaggers to present. Apologies for Ken not being here today. Think with the quick introduction, he wasn't able to clear his schedule to be here in person. So I will just dive into this presentation, and I will introduce Roxanne and McLainse here in a moment as well.

So the 435 And Soccer Drive tax increment financing plan is located in the Northland at the convergence of 152 And 435 Highway. The stiff plan considers the use of tax increment financing for public improvements located within the plan area. Reimbursable project costs are reimbursed to the collection of EATs, pilots, additional city EATs set out through the tax contribution and disbursement agreement, and CID revenue. A note about the pilots is that the pilots are captured at a 95% rate, where 5% of that is surplus to the taxing jurisdictions. The redevelopment area is generally bounded by an area that is bounded by Northeast Shoal Creek Parkway on the East, I-four 35 on the West, I-four 35 on the and Highway 152 on the North, as well as an area that is generally bounded by Northeast Shoal Creek Parkway on the East, Highway 152 on the South, and North Barry Road on the North, all in Kansas City, Clay County, Missouri.

I will note that this project area also does split between two school districts, the Liberty School District and the North Kansas City School District. It's about 60% Liberty, about 40% North Kansas City. The redevelopment plan anticipates a development of a mix of single family homes, townhomes, multifamily homes, residential units, retail, restaurant space, hotel, potential conference facilities, office buildings, entertainment and or sports facilities, and other compatible uses. The anticipated mixed use development is more particularly described in the litany of project areas A through Q that's in the redevelopment plan. The plan details these types of redevelopments that may occur within these project areas, and there are four separate potential project area definitions within the plan.

All of them use a mix of the family units, the commercial types, and other types I just mentioned as well as public infrastructure. The total estimated redevelopment project costs for this plan are estimated to be approximately 2,000,260 million $132,203 Total eligible reimbursement project costs are up to 3 and $23,177,682 Here you can see the sources of funds and the uses of funds, how we anticipate the private financing, EATs and pilots, additional City Eats and CID revenue capture, as well as the uses of those funds. Here we have a couple of tables I wanted to pull out from the plan for your review. On the left, can see the infrastructure and outdoor improvements, how much linear feet and square feet would be used within various office retail in total, as well as the jobs created. And these are all estimates.

Here you can see the development schedule on the left for the public improvements, on the right for the private project areas. Of course, are all estimated completion dates and start dates, and the developer can go into that, I think, here in a minute as well. And that was my short presentation on the nuts and bolts of this plan. The Tax Increment Financing Commission does recommend approval, and staff recommends approval. I'm going to pass it over to Ken so he can give his review of the economic development area study that he conducted. Ken?

Good morning. I hope everybody can hear me. My name is Ken Jaggers with Partner Valuation Advisors. And last fall, I did an economic development area study of this area. It's the the most decisive factor about this tract of land, and again, apologize for appearing via Zoom, but the, most attractive and decisive factor about this land is that it's an infill site, 505 acres, give or take, And, it's located at the junction of Missouri 152 with approximately 46,000 cars per day and I 435 with approximately 44,000 cars per day.

And, in order to make my findings, I reviewed the Spirit KC, playbook and undertook various analyses of this site and the potential that it might pose or offer for, development. And in short, I found that this site will be able to add significant employment, significant development by way of residential multifamily office and retail and other institutional type uses and add significantly to the, to the tax base. For instance, the a modest capture of this 500 acre site in the Northland may result in the addition of of approximately 240,000 square feet of office space, 340,000 square feet of retail, up to 500 single family homes or single dwelling units and multifamily to the tune of approximately 1,300 to 1,500 units. And it would generate approximately 4,000 new permanent jobs over the next twenty years. This this finding was done all independent of any of the the plans for the project as they now exist.

And I also looked at this study area and compared it to several areas in the Kansas City Metropolitan Area that have benefited from similar redevelopment areas or efforts. Those include the North Oak Trafficway and surrounding areas, the Plaza, Shoal Creek, Tiffany Springs, Eastland Center, and Streets Of West Pryor. These projects range from a 170 to 800 acres. And on average, those five areas that I compared the Pioneer Crossing area to, had an average assessed value per acre of a $165,000, whereas the, study area, 505 acres, had an average per acre assessment of a 119. And that's not a 119,000, that's a 119.

The market value of the parcels and this is based on the 2,024 assessed value and market value. They, had a market value of $758 per acre, whereas, for instance, the streets of West Pryor has a market value per acre of $1,064,000 The others are between 700 and $1,000,000 in value per acre. So there's significant potential of this infill site to generate, valuation and tax revenue. And I found that in keeping with the requirements of an economic development area, In its current form, the area discourages commerce and industry from moving their operations there, and that is something that could be corrected with redevelopment. The area would see a an increase in employment, and it would result in the preservation of or enhancement of the tax base of the municipality, and it will not solely be used for any businesses that would compete directly with other businesses in the local economy.

And by that, I consider that to be the Northland area. So those are my findings. I do determine that it meets the requirement of the economic development area, and I'd be glad to answer any questions if you have any.

Do you have additional presentation, David?

No. It doesn't sound like we have any questions, Ken. Thank you. Appreciate it. From here, I'll introduce Roxanne Koh so she can introduce the development team.

Good morning, Madam Chair, Mayor, and councilmembers. We appreciate this time to present to you proposed development that we've been working on for several years. I want to introduce with me today Tyler Buswell, who is the Global Head of Land for Property Reserve and President of Land Reserve. The applicant for this particular project is Land Reserve. And so if I can just provide a few minutes to Tyler to introduce the project to you and their company as well.

Thank you.

Great. Thanks, Waxon. Thanks, councilmembers, mayor. So grateful to be here. I've met many of you over the last three years, not only on this committee but throughout the city, and it's been wonderful working with all of you.

So Land Reserve so I'm the president of Land Reserve, and its parent our parent company is Property Reserve that's been the long term holder of this property. He's hold owned this property for decades. We are a long term land investment company, and we believe in investing in communities that we know will grow and succeed in the long term. And that bet was made in Kansas City again decades ago, and in the last couple of years is coming it's the time to come to to to fruition. And we think this property in particular is is very exciting for us.

You know, we have master plan communities in multiple states, so this is something we do everywhere. And our main focus, wherever we are, is how do we help build great communities. We believe if we do that, it's gonna be good for the city. It's gonna be good for us. It's it's good for everybody.

This property in particular, we started working on about three years ago, and it's it's a pretty extensive process when you say, hey, we want to you know, we've had this long term hold, now is the time to, you know, actually invest additional dollars into its development. So we started working with getting market studies and kind of testing the market, what could go here. We started working with land use planners, and obviously we started working with city staff and elected officials. Really appreciate the collaboration with all of those groups to see, hey, do we think this really could work? And the conclusion we came to a couple of years ago, it's still 100% the case today, we believe that this is a fantastic site for growth.

The Northland has we think is underserved in a number of different areas, in particular for certain retail uses, and we there is a lot of market interest. And to that end, we are currently under contract with one of the best lifestyle development companies in America, Elevated Development, to purchase 78 acres on the North End. And this is, again, it's not just us saying, hey, we think this is going to be great. We have lots of other folks that think this is going to be great. And so we're we're really excited about it.

So, I mean, in summary, Land Reserve is a company. Again, we're a long term investor. We develop communities all over America. We think this is a fantastic opportunity. We truly believe in Kansas City. We believe it's it's a great city. It's been a great place for us to be historically. We're excited for the future. And then selfishly, personally, I think a lot of you that I've I've met with in the past know I grew up in Topeka. So, you know, my whole life, I've been coming to Kansas City. Chiefs games, Royals games, Worlds of Fun, you name it. I love this place, and it's really an honor for me to be here in my current role doing some development in a place that I care about. So I'll leave that and turn it back over to Roxanne.

We have a few more slides. Happy to share with you just dives into a little bit more of the details and happy to pause at any point in time in which either any of you have a question. Again, as it was stated already, that a part of this area is in the North Kansas City School District, a part of it is in the Liberty School District. We had some very good discussions with the school districts coming before we actually met with the Tax Increment Financing Commission, and they made their recommendation. We were very pleased with some of the discussions that we had with the school districts.

As was noted earlier, we are planning to surplus 5% of the pilots back to the taxing districts to school districts on an annual basis and to all the other taxing jurisdictions as well, which would be a statutory requirement any time we surplus any of the statutory eats. And I think that I'll paraphrase what the school districts testified to at the committee because I think that's very important. It is important to us that we build a community that supports the school district, but at the same time utilize the portion of the economic activity taxes and the pilots that we would need in order to make the development possible to move forward. Both of those school districts said that they absolutely supported the redevelopment of this area, and they chose to abstain from the vote, however. So we did not get a no vote, we did not get a positive vote, and they chose to abstain.

So I think that for many of you, you can read between the lines as to what that means, but a lot of times we get that question as where do the school district stand with regard to this particular project. I will also note that it has been that they've noted that Kansas City in the past has not necessarily in the Northland utilized payments in lieu of taxes, but they recognize that this is necessary for this particular project to go forward with all of the infrastructure that is needed. And to reemphasize, this is an infrastructure only. It is a pay as you go only. So we're not asking for the city to front any of the money for any of the infrastructure projects.

This would be developer, private financed, and then they're just waiting for the actual generation of these tax dollars in order to get reimbursed to invest in that infrastructure that's necessary to develop the property, which I think are important points to make. I think we've gone over all each of these points here. Again, we have 18 different redevelopment project areas. Not before you today, but I think it's to be introduced later. There will be ordinances that were heard or for each of the for the projects as a whole.

As everybody, I think, understands historically, the city will introduce those ordinances, and then they will be held off the docket until each one of those particular areas are ready for redevelopment. And those projects have up to ten years in order to come back before the city to approve TIF for each one of these separate 18 redevelopment areas. And again, this slide just shows a lot with regard to proposed layout of the mixed use development, where we've got the commercial and retail largely to the north and to the west side of the site. We have what would be a lot of multifamily, potentially office opportunities that you see just under that first tier of project areas. And then we have other areas within here that we anticipate could develop for single family residents.

And again, we've got multifamily in here and around in, and I think this is hiding some of this area. We've got more what we consider perhaps more retail down here in the lower corner that might service the more of the neighborhood retail than what might be a regional draw retail you see to the north and to the west side of the site. Here, we dive into a little more of the details that I know that you there's already been some presentation with regard to what some of the project costs are. And I'm going to just speed through this, but I'll be happy to come back to answer any questions that you have specifically with regard to any of these project costs. Again, more detail of those costs.

This is the net present value that we have of the capture of the economic activity taxes and the estimate of each of those over time. So we have a total net present value of TIF, Eats and Pilots of over $415,000,000 And of the Super TIF, that takes the company. Have And strong each of these numbers. For And again, I'm happy to go back to answer any questions with some of these specifics. This gets into what our estimated redevelopment project costs are or actual total costs of the development are.

Again, just kind of breaking it down into the various different sectors, special potentially specialty grocer, anchor, mixed use box, office, restaurant, retail shops, hotel and convention center, office, mixed use, commercial retail, business.

Of

we're

we're seeing anticipating that a there could very well be a site right there along Shoal Creek Parkway for some sort of a health clinic use. We know that there are several that are looking for new locations in the Northland. And then we've got grading and mixed use development costs associated with that as well. And this dives into more detail into those infrastructure costs. And I'm not going to go through it in detail, but this describes each of the buckets of the infrastructure that could be reimbursed and what those estimated costs are and the contribution of reimbursement that we would receive from the various different sources, including the statutory pilots and EATs, the additional city EATs, a CID that we look to form to come back to the council for approval on in the future, and the total reimbursement and then of course other being private sources.

And it was mentioned earlier what is about in development. And we're very excited about this. One of the reasons why we're hoping to have this approved sooner rather than later, many of you are familiar with ICSC, which is the national retailers group that comes together looking for sites to develop throughout The United States. We'd like to be able to showcase this land in the upcoming ICSC conference that begins on actually, it's May 18.

May 18, yes.

And again, this just provides a few slides to show you some concept of what may come to this particular area. One of the emphasis is to try to establish a lot of gathering spaces, which some of these slides show. I don't know, Tyler, if you want address that for us.

I think it's twofold. One, we believe in that, right? We think a great, vibrant community includes open spaces and trails and those sorts of things, and including in retail areas. And it's one of the reasons why we think this North End really should be a lifestyle center as compared to a power center or something that would be, you know, a big parking lot. We don't think that's what we're like yeah. You need to have parking, but you want people to be able to sit and, you know, activate spaces and elevated development is one of the best in America doing that. And that's one of the reasons why we're excited to have them have interest in the

couple more slides to show you. I think that really completes our presentation. Happy to answer any questions that you may have.

Thank you for being here today, and thank you, Councilman O'Neill, for bringing this project. It's an important one. It's been talked about, I think, for our whole time together. So I like it, and I like that we've got some action on it. Don't have lot of beefs, but do have just a few questions on the financing side. So first, I think I just want a broader viewpoint of what we are what we're authorizing here. Does the city kind of to councilwoman Paterson Hasley's line of questioning for the last one. Would this authorize a bond issuance that then is backed by certain obligations? What's the what's the nature of the financial transaction or what we're being voted?

What we're So this would not specifically authorize a bond issue. It's possible that in the future that it's possible the city council may choose to issue bonds. I would anticipate they'd be revenue only. We're not asking for the city to issue bonds. We're anticipating that this is a pay as you go basis.

In any event, as you move forward with a project, if it shows that it's got a strong history of generation of revenues, there may be an opportunity that makes sense to come in and seek bond financing to shoulder some of that and make the project go a little bit faster. If we get certain bond financing, it may offer allow us to reimburse at a faster rate and then put the property back on the full tax rolls sooner rather than later. And that's always a goal. It's something that can be reevaluated as the project matures and we have an established revenue stream.

So perhaps then I'm confusing really the last section of our caption for this, which is authorizing the city manager to enter into a tax contribution and disbursement agreement with the Kansas City TIF Commission and Land Reserve. So I guess bond is the wrong language, but we're entered into a contractual obligation to provide certain tax revenues over a period of years. Correct?

That is correct. And so and that's and again, subject to annual appropriation. So it's pretty much a standard, what you've seen come before you in the past, of a tax redirection agreement. So we have our statutory tax increment financing. And then in addition to that, we're requesting the city to contribute of certain levy rates, which are outlined in that agreement and in the TIF plan to redirect additional dollars to that. And that all that is is that what we generate, to the extent that we generate it, the city would go ahead and redirect those dollars back to the special allocation fund, is established through the statutory TIF to allow for a reimbursement on a pay as you go basis. So to the extent that they're generated, would be redirected.

Why not just use a traditional TIF? So we're going and I've seen this in more economic development projects lately that we're we have TIF and we have all the statutory tools, but we're basically doing an ancillary contract. Is that primarily for the purpose of just generating more revenue or you don't want necessarily work with TIF? But why are we seeing this separate contract, which while I understand it's subject to appropriation, I've been told by former finance directors and others we're not supposed to just tear up things and say to hell with future appropriations. We don't care about our contracts.

Correct. And so the reason that this is being requested in our and when we look at the overall financing cost for the project, the actual cost of the infrastructure, and you look at what we would generate just with statutory TIF, it's not enough to attract private development private investment into the project. And so the ask is so that we can have sufficient amount of revenue generation in order to get reimbursed the cost that the private industry would invest into the project.

Does this carry, though, and this is perhaps for our finance folks, as a debt of the city if we were to enter into this contribution agreement? So it's just a promise to give it away, but Right. There's not actually a registration of said debt.

Right. So there we the city has no obligation unless the revenues are actually collected from the project.

That's kind of the core question. If the revenues are collected, then Are there's an

not collected? Yeah. There is no obligation on the city's part. We only would receive what has been collected on the site in the project areas that have been activated, and we would redirect those back to the project. So, yes. Other than that, there is no obligation.

But there is an obligation if collected? Correct. Correct. All right. So then the only other thing I have, and it seems as if there's been discussion on these others, it seems that the TIF pardon me, I guess it's not well, the earnings tax redirections are the one thing, and I think I've shared with the sponsor, that's an area of concern I have.

Other than telling me that it's necessary to fund the project, why are we doing that? Because in my almost eleven years here now, we didn't we weren't the initial ones who voted on the Cerner TIF. But I hear a lot of beefs about that when we did, I guess, it's super TIF. I know that generally, I believe we disfavor them. We went through a lot of work to tell people about renewing the earnings earnings tax redirection an important part of this?

What I would say, again, getting back to

the restate

again as the need to have the funds available to do the reimbursement. When you take a look at all the various different levy rates that the city does have available, there are only certain levy rates that the city is in a position to redirect for these purposes, e tax being one, capital improvements tax being another, we could go through those in very detail. Some of them have restricted uses that could only be used for certain things. And so that's why you'll see many of the projects that have come before the city when they're in need of those additional dollars other than just the statutory TIF, where the e tax, capital improvements tax and some of those others come into play.

Did we look at other tools different than the e tax? And maybe when the questioning is done, I would like to know, like, when was the last time we used an e tax redirection? People tell me it happens all the time, but I just don't know about it a lot.

Sean Carroll is here, and he can probably speak a lot more eloquently than I can. But economic development TIFFs, we usually do not redirect earnings tax, but with BIPT TIFs and other, you know, aspects of TIF finding, then yes, we have done it on an additional basis. So it's the super TIF, I'm going call it the super TIF portion. The statutory TIF always includes earnings tax. It's that is by statute, and I would let Emily speak to that. But, the additional city redirection for an economic development TIF usually does not include earnings tax.

So when have we I'm not jumping. Like, when have we done it lately or on what projects do I kind of know for comparison's sake? I start with the core of, like, don't love redirecting earnings tax and maybe we find other taxes that are better for redirection, understanding the cost issues that you bring us.

I'm sorry. Questions for me? Sean.

Sean. I

would just echo what city manager Queen just provided. So, typically, we have not done any super tips on an economic development based TIF. We have had tax redirection agreements, like we contemplated an agreement with Waddell and Reed, for example, that would have redirected earnings taxes. They did not end up locating into the building that they were going to locate into, but we have done some economic sorry, earnings tax redirections for non TIF tax redirection projects. It's just kind of here and there throughout our history. But more recently, it's it's been an overlay on top of a TIF, and it's been a TIF that's either a blight or conservation area TIF.

And this is and this is a blight TIF or this is an economic development?

Economic development.

Would it be your supposition you could qualify for a blight TIF, miss Koch?

We we believe that, technically speaking, you could qualify for blight. I mean, could give you the arguments for that. I think that there's been a lot had been a lot of discussion as to whether or not we proceed with a blight finding or we proceed with any kind of development area finding. And at the end of the day, without getting into all those discussions, I think that it was the city's staff's preference that we proceed with the request for an economic development area TIF. But with the knowledge that we were coming forward with the understanding that we would need to have the tax redirection agreement in addition to the statutory TIF. So that was understood at the time that the decision was taken to proceed with any kind of development area review.

How much are we estimating to get out of earnings tax redirections? I mean kind of my ask is a somewhat simple one, which is, is there a way that we just get to this number you're suggesting without the earnings tax?

It's possible. I think that going into it today makes it difficult because, again, as you are looking for investors and private financing sources to come in, they need to know that there is going to be not just a one to one coverage ratio, right, on the ability to get reimbursed, but they need to know that there's a cushion there, that there is the room that they will get reimbursed over time. If it's not in ten years, it will be in fifteen years. If it's not in fifteen years, it will be in twenty years. So I think that's very, very important.

I think that there is a possibility at which we get to a point where there's sufficient generation that we've established it and we could say, hey, we can start surplusing dollars if we were able to hit certain thresholds and certain levels of investment that brings those dollars to the table. I think the other thing that's really important to note here is that we are when we talk about redirecting the economic activity taxes, including the earnings taxes, specifically, probably more importantly, the earnings taxes. We are not talking about redirecting the taxes of those who live in this area. So those individuals will be paying earnings taxes. We're not asking for those earnings taxes to be redirected.

So that's a substantial amount of e tax that's coming into the city on this project that is not being redirected. We want to create a place where people say, I want to live in the Northland, but I can't find housing in the Northland that suits my needs, whether it's based on your family needs, your income level, and the school districts that you're looking for. This is going to bring have an opportunity for those families to choose to live in the Northland rather than going to Johnson County. And I'd love to create a place that we create more housing in the Northland that keeps people from moving to Johnson County and that we have good retail development around them that they're looking for and that we build a development that creates a community that people want to live in. And they're willing to pay that e tax.

So I think that's really important to understand here. We're talking about over 1,300 multifamily units that could be placed here and over 100 or more single family units as well. And we're talking about generating a lot of income from those individuals that we're not redirecting.

Yes. And I'll I'll I'll stop on the inquiry soon, although I would really just kind of reaffirm the point that and I don't know, and I guess I don't get to know, but, like, who decided to redirect the earnings tax rather than just redirecting more sales tax or something like that? I just I I mean, kinda have a pure policy issue because you will rely on services like fire and police and all of that on this site. Those costs won't go down. If we have 1,300 new people living in this part of the Northland, we'll have whatever number of cops and firefighters and all of that.

And frankly, I can make a better argument for redirecting more capital improvement sales tax because you tell me you're doing infrastructure. So I mean, maybe the simple question is like how much you're estimating you get from the earnings tax redirection. If it's like $5,000,000 that you can get from a capital improvement sales tax redirection, can we just do that and keep things moving, assuming this is the

This does include the redirection.

I know that it has capital improvement sales tax. I'm saying, can we not enhance the earnings tax redirection, enhance perhaps the capital improvement sales tax? Is it I mean, I know it's hard, but you're a brilliant person. And so is there just a way that we use one of those other tax tools that isn't redirection of the basic services tax and all that we just told everybody about?

If we

well, again, we have redirected we are maxing out the redirection of the capital improvements tax already, okay? And so one of the things that I think that when we look at the latter years of what we're looking at going over thirty years, I think that one of the discussions early on was can we cut that off at, say, twenty three years? After the twenty third year, let's not redirect the e tax any longer. That's something. Maybe it's taking it down to redirecting only instead of the other 50%, only 25% of that.

Are you suggesting to me, though, there are no other sales taxes or other tax revenues that you could think to redirect other than the earnings tax?

I could. I think that then it's a matter of talking to the city's legal counsel as to whether or not that they think that those are taxes that are that the city can redirect for these purposes.

Wanna take a break?

Alright. Councilman O'Neill, think wanted to say

something. Just want a a statement. I'm not asking any questions. I I just first off, I I started on this project seven years ago. I I understand you said three, but we've been doing we've been doing this for seven years ago. And I'll give a shout out. You guys all remember mayor Slater coming up with the five eighty seven and bending our ears, and we all looked at him like he was crazy. But I just I just wanna say this is the first time in Kansas City that we are actually being looked at by Overland Park's traditional stores. You go out to Lenexa City Square. You go out to Lenexa or Leewoods Town Center.

Town Center. You go out to all these places, they have all these wonderful stores. And we finally have an opportunity in the Northland to land some of the biggest projects in the biggest retailers in in that could be in the whole city. You know? And when I look at the 8th And Grand, The Lid, The Plaza, Samara Road, 16th And Broadway, Current Village, and all of these projects that we're doing, they all have inherent issues with them that we have to address because of one form of problem or another. When we talked about when you talked about the what do you call it? When you Earnings

tax?

Light versus the Light

Give us the context.

When you go to the land and you get a when they do a

when Oh, god.

I'm telling you.

Permitting? Getting old. Excavation?

When you do the land study to

The market study? The blight

Blight study.

Blight study.

Blight study.

Blight study.

Keep and see if you're all on your toes. So so if you do the blight, you know, if you you you ask, is this a blight? Does this qualify? Well, I know on 435 In Front Street, we did a blight study there that was all land. Right?

And it's it's a blight study because there is no infrastructure. There is no current way to that land is so beat up. And our topography on this particular project is like it's going to need millions and millions of dollars of moving dirt and just getting it so that we can actually start construction on. So I just wanted to be this is a great opportunity, and I understand what you the earnings tax is important, but the development, the ancillary development that's going to be brought by this project is something I don't think the Northland's ever seen before. And I think having land reserve involved in this and their contacts throughout the country and all they've done all over the the world.

And and I just have to remind my myself that seven years ago when we came into this, Land Reserve didn't even have this land. It was in their other real estate.

It was our holding company.

It has a five hundred year plan. And we talked them down to this seven year plan. I just it's been a long process. I appreciate everything that these guys have done. I know that everybody's put a lot of effort into this. I know staff has gone through this. And to your questions, I think they have run every model that we have been able to come up with or they have been able to come up with. And and I guess the fact that this is what they ended up with as their best best idea of way to go forward. So I I just wanted to import part that info. So thank you, guys.

Alright. Councilman Ryan.

Thank you,

madam chair.

Comments and maybe a question. I'm not quite sure. I think it will just be more of a statement. On the super TIF and earnings tax issue, I feel familiar and have seen that. Now don't ask me for a specific project because I don't want to misstate one.

I was searching in my phone to see if I could find something, but I know that specific issue has come up along with the litany of other redirections that are included in the supertick granted for the blight economic development classification of projects. But I have seen it. And if there's a desire to be more protective of that moving forward because we're off the heels of renewing the earnings tax, I mean, that's more of a policy issue that we need to have a conversation about rather than applying it on a project by project basis. And I I all I can say is I know I've seen it, and we've we've included that on the list of things. And I don't know what that list of things is if ACM Queen was able to find some, but I I know we've had them in front of us, and that's been on the on the list.

And I what resonates with me is the opportunity to capture some of that revenue generated by folks who are looking for something County that we're not always able to provide. And a lot of folks look at our sprawl and our well, the amount of land that we have and the density that we have as a challenge. But I think when we do that, we also overlook the opportunity to build in the Northland competing projects that will draw people from Johnson County and and compete in that way. Not a lot of cities that don't have the space to do that are able to do that. My question, my request would be, and this would be of staff of the development team and of the developer moving forward, is that we structure this whole project with enough density to generate sufficient revenue that will more than offset the city's long term obligation on infrastructure, streets, sidewalks, whatever it is, at some point, we'll have to go back and fix that stuff.

I think the key is making sure this generates enough of that revenue so that long term, we are generating more revenue, more than enough to cover whatever our long term infrastructure needs are, excuse me, with what we're building. And I do think there's some value in that, that we can provide those different types of lifestyle. Nathan Woolett's councilman Woolett's family lives on a farm, councilman O'Neill's in one of those big sprawling cul de sacs up north, and I live in a very dense area, and we get to provide all that for everyone. But that's my my commentary on this. I'm I'm I'm pretty excited about the project. And I appreciate your transparency on the tax and jurisdictions. You know, oftentimes, we have to kind of ask the questions to get that kind of information, but you were upfront about that, and I really appreciate that with us today.

And just to add just if I may speak to that, there was a cost benefit analysis prepared. I am not a master of what all inputs go into that. The EDC has a modeling, and maybe they can speak to it a little bit further, but I think that they take a look at each taxing jurisdiction in their model and what all the other taxes that this will generate that aren't being redirected, whether it's through the statutory TIF or through the additional city eats. And it does show a net positive impact for all taxing jurisdictions, including the city. I can only assume that it takes into consideration the cost to maintain what it is that we are developing.

So and part of that gets into what I mentioned of the e tax that we're not redirecting, right? There's personal property taxes that don't get redirected. So there's a lot of other tax levy rates that are in the mix that don't get redirected. We also have a situation in which we have more people living in and around other retail areas that they will do more shopping, more buying, not just within this area but others in and around. So there is a multiplier effect when you start to add people living in an area in which they won't.

And it's important to note on this, again, area where we refer to it really more of an infill area rather than continuing to push that suburban sprawl out there where it makes it more difficult to deliver services to. This is an area that if you take a 10,000 level foot, you're looking down, and it's right in the center of everything that's going on. But the terrain just makes it nearly impossible to develop without this assistance.

Three: Bigger than councilman Duncan.

Speaker Yeah. And I agree with everybody. Largely, I agree with councilman O'Neill. I know you guys have been working on for a long time, you and councilwoman Hall and others. Like, at its core, I'm I'm not trying to be difficult. It's the earnings tax question. I didn't get to write this ordinance. I didn't get to be in the chats earlier. I would have just done it because I I see some document that I don't really know who created it. But, nonetheless, you're getting and just correct me if I'm wrong. Right? 50% of city and county sales taxes would be part of this. Right?

That would be the statutory TIF.

50% so the statutory TIF is also 50% of the restaurant tax, correct?

Correct.

50% of the CID sales tax, correct?

Once we come forward with a CID to be approved by this council, correct.

Okay. And then 50% of the earnings tax comes from the statutory too?

That is correct.

And so this ordinance and so this ordinance is about looking for additional sales taxes. And in this request, you're looking for the remaining 50% of city sales taxes?

Correct.

So a 100% Not of

not of all of them.

So Of

the relevant city sales taxes?

Yes.

Excluding the ones that were like, there's no statutory next that we don't think we can redirect a parking Correct.

Parks tax. Fire tax. Okay.

Yes. And then a remaining 50% of the restaurant tax, so this would be a 100% of the restaurant tax. That is correct. And then 50% of the tax on hotel rooms, right?

That is correct. And that's a that gets into a whole another unique situation with the way hotel and TIF works, which I'd be happy to

You don't. You're good. And then and so we get a full 100

spent in the area in any event. Correct.

So the idea generally is then that we've almost exhausted all the other potential sales tax sources. Is that correct?

Correct.

All lawful sales tax. Correct. And so we go to the earnings tax. And are we redirecting in total 100% of the earnings tax then with this?

That that would be the case during

during the three year period.

During the twenty three year period, we've asked for it to go out to thirty years to be clear. And where I where I say that I think when we take a

look Does does this ordinance do the thirty years?

This so this ordinance would allow for so this ordinance before you would approve the tax increment financing plan. So it approve to move forward with the statutory TIF. It would approve also what you've just outlined as the additional city eats that would go out for a period of thirty years. And this is on each separate redevelopment project as it then comes before you.

So I mean, like, love the project. I love us being competitive with lots of other places. It's just if we're redirecting 100% of most sales taxes and 100% of the earnings taxes and then property taxes are being redirected that would otherwise go to the schools.

I don't know that it's it's fair statement to say that we're redirecting most of the other city sales taxes, You're getting but it's a significant thing with

me on the fact that Parks and KCATA aren't part of this?

And fire and yes.

Okay. So So some set. And the

$1.08 cents.

So part of the reason and and to the point, and it's we do have a bunch of staff who seem to know these things, and maybe the assistant to the city manager for economic development can help us to the councilman's point. Because I've been on this committee for a little while, and we haven't voted on that many unless we've missed them. And maybe you know, and I welcome your experience. Do I mean, I just don't think in finance committee for the last three years every month we've been voting on an ancillary earnings tax redirection. You're suggesting to me we we do that regularly.

So I think that you have both in the past and you have I mean, recently and and years past approved SuperTIF, right, which I that's how I often refer it to it, but the additional city eats that include the components that we're requesting and, in some cases, more.

I know Cerner. I do know we did that, which some don't love that. Can you tell me the others? Because council O'Neill, for example, listed with respect, like, the plaza. Are they asking for earning sexual erections too? So I have to just make sure I pay attention

to Pro the plaza is going through Port KC, so Port KC would not be able well, no. There's a there's a tip element to it. Earnings checks? Mhmm. Yes.

Yep. Ancillary amount? Yes. So is everybody just doing this and we've missed it all for some time?

So This is not

a precedent. It's not a necessarily uncommon ask. That being said, as of late, I don't know that any of the and ACM Queen, Roxanne can correct me because they have longer histories. I don't know that we've had in the past year a project get approved with the additional city eats going out to thirty years, including earnings tax. I think it was something that was contemplated on $800. I think that there have been, as you mentioned, the plaza and some projects coming forward that may be looking at that. I believe the Lowe's Hotel followed this model. So it's not the first of its kind, but it's it's, I would say, a tool that we use for extremely high priority projects.

Does anybody know had a lot of TIF projects. I'm looking through here.

Mister mayor, I and Sean can confirm if I'm right or not. It looks like we did 50% of earnings tax for thirty years on the West Bottoms. So I think that I think that that's a

I think that's the last conversation we had

about earnings tax here. And I'm and I'm looking at Historic Northeast right now.

That would have been 23.

Just Historic Northeast. I had an email on it, but I didn't wanna mistake that.

And I and it does. I I think it's 50% of it's 50% for 30 on Historic Northeast as well, but I would let Yeah. Finance staff double check me. I think you're right at what I'm looking at.

Is that more aligned with the statutory TIF that Ms. Coke is describing, though? So you're suggesting Historic Northeast got kind of statutory TIF and then additional term of the 50%

Yeah.

For second Yeah.

And then his, West Bottoms was kind of with the line with statutory. Are there

So thirty twenty three years would be a statutory and then just extending that through the thirty years.

Are there many getting a 100% TIF then? Or I I just and I'm not trying to be difficult, Roxanne. You're you're great. Oh, you're a good lawyer. And I would love it if, like, utility tax or so. I just it's the earnings tax kind of thing because I do want us to make some money out of it as things go and I know more people will move and all of that. But, like, that's kind of the question.

Utility tax is included in the economic activity taxes. It is. Yep.

And we just have so everything's kind

of Yeah.

In there now

Well

is what I'm hearing. That can be.

That can be.

I might add. I just want to add an important component of this. This is brand new. This is not going in and redoing something. This is creating something entirely new. And all of this development will create so much money that has never been you know, Samara Road has had taxes come out of that. The plaza already has taxes coming out. This is all new to the city, so it does

to And going able do

that. And And vertical construction, vertical improvements as well. This is strictly for infrastructure. So it is using public dollars to pay for infrastructure and infrastructure only.

Madam Chairman?

Yes. Go ahead.

My question is more upstream from this conversation. It's the basis of this is the third project I've heard that we need a super TIF in order to attract additional financing. And so my question is, how are we, as a city, verifying that information? What what are the economic factors that are going into these additional asks, to the mayor's point, for additional financing for these projects that are going to come from out of state? And then do we have an understanding of what the return on that financing is?

Well, there's a cost benefit analysis that's done by probably SB Friedman. Think you said that.

It's done with inside the EDC. We have a model

for Oh, okay.

So there's a cost benefit analysis that's done. I think what is probably something for the this committee to consider and the council to consider is the coverage of these revenues. So I think it's clear that within the plan and within the financials for the plan that the earnings tax is not even necessarily included in the current projections, and there's still excess coverage to cover the amount that is needed to reimburse the developer for expected infrastructure costs. So it becomes an insurance policy for the developer effectively because it makes sure that their lenders are happier with the financing because they've got a better coverage ratio. And so, what I think to Roczen's earlier point, I think what should be considered is maybe a shorter time frame for the excess redirection and or a lower percentage.

We don't just because we call it super TIF does not mean we need to give away the entire second 50% of these taxes. You can do any flavor you want. It is a creature of our own concoction. And so, it can be done on, well, we're just going to do 50% of the second 50%, or 25% of that second 50%, and see if that still makes the project math for our for the developer.

The problem is just we don't we don't know that. I mean, I'm you're you have so you have the numbers and perhaps you do. We don't really have them. You're just telling me you need all the tax redirections to support the project.

For the greatest success for the project to be able to come forward with more certainty of development, that is our request. I mean, to that point, I think the latter years of the request are less important to attract that private investment to ensure that we can stay on our projected time frame that we would anticipate to be able to attract that private investment.

Is this you suggesting that you can get by with fifteen years of the anticipated earnings tax redirection at 100%? And then in the back years, I guess there'd be eight years of the 50% and then the rest, we can do revenue capture after that?

On the fly right here, right now, some of the numbers that we've looked at, I think that we've looked at where we could do it at definitely, if we capped it out at twenty three years or twenty years, I don't know about fifteen years. Perhaps if we were in a situation where we were at 100% for fifteen years and we dropped to then just take 50% of that extra piece, that going forward that we drop back by 25% haven't run those numbers. I think the important thing to keep us just so everybody understands kind of the time line. So if we change this, one of the things that I understand the legal requirements is that we would need to give a ten day notice because this is set out, laid out in the TIF plan itself. We have to show what all the projected financing is and what the ask is.

So we would need to do a statutory ten day notice. I don't know the exact date on which that notice could go out. I think we would have a couple of days to drop back, take a closer look at it, get a ten day notice out, and then be back in committee. I believe that would be that May. Yeah. And we could still have this approved in advance of

Here's my world view that I think is even easier for you because my colleague, councilman O'Neill, has spent seven years on it. I still think that there's a a viewpoint, and they'll tell me or we'll get sued, where we just give you a due pass out because we don't meet next week. We amend to reflect the 100% of earnings taxes for fifteen years, that's the 50 plus the additional 50. We then, in the back years, really just leave you to the statutory TIF redirection and try to say that's good. Your thought? And let's on numbers issue as compared to the legal issue.

Just repeating what I think Just make sure I heard heard you. I'm hearing fifteen years of the e tax.

100% e tax. Yeah. You keep everything else. All the others are as you've drafted on e tax, one Everything 100% else 15 stays

out for thirty years. I think we can take a look at that number and see how it shakes out on the page.

Great.

Yes. I mean, would

in deference, I would say 20 only because I know the cost. I've watched the cost over the last several years, and I know how much they put into this. And I know the staff came up with these numbers not out of a whim. They were actually thought out. And I said I don't like putting our earnings tax in play like this.

But for every development we have, we have different ideas and different problems and issues that we tend to correct here at the council, at the committee level. And I mean, I would like to see you know, I guess we have to come back and kinda get an approval of of what we can actually live with. But I I I would think a 20 would be a pretty strong I mean, that's a pretty big compromise in my view. So Why

don't we think of this then because it may actually put you in the same place. We just stair step down 100, 15 is the 75%, and I'm just for years 15 to 20.

The 50 of the 50 for that and those next years?

Just

over and above the statutory in those last eight years, seven years.

So I would offer for everybody following at home 100 for the first fifteen years, the 75% for years 15 to 20.

16 to 20.

16, sorry. 16 to 20. Then the excess city redirection on earnings tax would cease after the year '20.

But then it'd be statutory from '21 to '23 and then no more earnings there.

And then the recommendation is do pass, and then, Roxanne, you just call us and tell us if it destroys everything over the next ten, twelve days.

Understood. I think that and during that time frame, just to be clear, I know that there we still have the additional we have that tax redirection agreement to refine some terminology.

You effectuate the notice and

then at the same time, we would need to what we're we've also asked for the redevelopment agreement so that we see that in advance. And if there's anything that we need to add to the ordinance to give direction to the Tax and Corporate Financing Commission as to the terms that they would typically lay out in a redevelopment agreement, I think that's important. We've been asking for that agreement. We would ask for that to come forward pretty quick so we could review that during this period of time. That would be extremely important to the developer.

So without that, I think that we are at a place where it's very difficult to tell you today whether or not that financially works. We need to see the big picture of what all the asks are to be able to tell you what the commitments they're asking of of the developer to be able to tell you whether or not those numbers work.

Would you like us to amend the ordinance to include a direction to staff as to the redevelopment agreement?

I I would appreciate just just to if just to ask right now. I think that the expectations are we would get a draft of that redevelopment agreement immediately to And

I think you're talking about the TIF Commission redevelopment. I am. And

the city

is not a party to that. That is correct.

But it is still an important piece of the overall redevelopment. We've been asking for it. We wanted it in advance of this, and we would like to see it as soon as possible.

I did send an email yesterday to David and Heather about the redevelopment agreement, but just note that that would not come to us, to a free development agreement.

That is correct. But they often look to the city for some direction on some of their standard pieces that add to the cost of development.

We will replace the entire commission to the extent I can if they don't give you the redevelopment agreement. How about that? But we'll we'll make clear to all of our TIF folks that they need to give that to you as expeditiously as possible.

And, mayor, appreciate the conversation here. I I think we can come to a a resolution. Again, just back of napkin math here, I think we can make this work again. We we need to look out a little bit closer, but I I think what you're proposing again, what does it do? It it eats into the buffer a little. That that's what it is. And we're just trying to see, okay, is that enough? How does that work? But conceptually, you know, appreciate the conversation and

And thank you for doing the development too. To councilman O'Neill's point, it's a big deal for us. And so we appreciate that.

Of course. No. Again, we we believe in Kansas City, and we're happy to be here. Thank you.

Great. Are there any other questions, comments? I believe we do need to pay take public testimony for ordinance number two sixty three sixty three.

No. There's no testimony.

I would entertain a motion.

So we'll do due pass to effectuate the notice issues and all of that in some time. Madam Chair, I recommend ordinance 260,363 be reported to the full council with a recommendation of committee substitute, said. Recommendation of do pass. Second.

It's been moved and seconded that a committee substitute reflecting the mayor's changes to the earnings tax for ordinance two six zero three six three be reported out of committee with the recommendation of do pass. All those in favor, please say aye. Aye. Any opposed? The motion passes.

Thank you.

Thank you.

Thank you. Appreciate

it. Thank

you. Thank you.

Sorry, Kevin.

Thank you, guys.

It's 24. It's number 260286. Commending chapter three code of ordinances by repealing section three dash six two two prevailing wage application to incentive plan. And enacting a new section three-six 22 and enacting a new section three-six 23 prevailing wage application to application to incentive plan for the purpose of enlarging the establishing applicable prevailing wage policies for certain types of categories of incentive projects amending chapter three code of ordinances by repealing section three dash four three seven waiver of MBEWBE goals for the purpose of greater alignment and efficiency among city incentive agencies and amending chapter 74 code of ordinances by repealing section 74 dash 11 Yeah. Affordable housing set aside and enacting in lieu there of That purpose.

Section 74 dash 11 for the purpose of rightsizing the payment in lieu fee to better reflect amount in subsidies provided per unit of affordable housing, directing the city manager to issue a request for proposal for a nexus study to evaluate the affordability offset value and implementation of linkage fees on development within within the city for the purposes of funding workforce and affordable housing and to evaluate and develop a developmental linkage fee program within the city and to report back to the city council on the same within six months.

So I understand that and I I love our committee chair. We have two committee substitutes, There but is a committee substitute that people are largely agreed on, which would have the nexus study matched with the other standards? Or, I mean, does there there was like a Lucas version and a Duncan version last time, and Boo has suggested to me that they have morphed into one magical version that adds the nexus study.

Two Boo versions.

Well, they they were introduced they were circulated as two Boo versions, which

Yeah. The the there's the the the first version, and I I think I was a bit confused when we were going to combine them that there was there's a difference in the prevailing wage portion of the Duncan amendment that I don't have any disagreement on the prevailing wage portion. And I I think it was my understanding that when we combine them, it was to make sure that the prevailing wage portion was congruent. I am not in agreement of moving forward with a $5,000 set aside at this point. I think the prudent path forward would be to wait for a nexus study before we made any changes to that.

Understood. All right. And so then I also got testimony. Is there somebody here who can explain how the $5,000 really means $25,000 or something of that sort? It was like total per unit versus

Well, yes. I mean, it's 5,000 per door versus 25,000 per affordable door.

Yes. Please.

Which ends up being about the same thing.

So the 5,000 is for affordable units and the $21,000 is for all units in the building, if you were sorry, inverse. The $5,000 is for all units. But if you were to just look at the affordable units, it would be like $20,000

Got it. Okay. And currently, it's $100,000 per affordable unit? Correct. So 5,000 just reflects per door rather than per affordable unit, and so that's kind of a so there's really no change here, but the clarification would be that that's where we exist. Okay.

All right.

Councilwoman Boo, we were trying to describe your two committee substitutes and which one you may or may not like and

kind of Yeah. And I think sorry, I should have waited. But I think the one option would allow the merger between the two except for having the the question is what the amount of the set aside would be.

I mean, I think, you know, at the end of the day, what we're talking about is ensuring that the EDC and the port authority are operating by the same playbook. Think I where I have disagreement is that the EDC and the Port Authority have not operated by the same playbook for a long time. And that in order to have all the information at hand that a nexus study that would provide, to seesaw back and forth would, I think, be more disruptive than just continuing the course that we're on, collect all of the additional information before making any change.

Understood.

My question would be, we haven't here to report back within six months on the NEXUS study. Is that a realistic timeframe? Or what what do how do how long do we think that that would take to get the NEXUS study back?

So we estimate it'll be between six and nine months.

How long is that, like, a procurement RFP process?

Can we

do a sole source for something like this?

They can. Statutorily, they can.

Yep. Does that cut our time frame down? Forty five to sixty days out, I would assume.

So it takes out probably your front two months.

And do we think that we can realistically find someone to do this? Because I mean, that's what our problem has been before.

It's my understanding that the last time an RFP went out that there wasn't any bids on it. So I think we would have to better understand who the players are in this space to answer your question.

Okay.

So

this nexus study is a a thing that exists that people do? Yeah. Right? Okay. I'm just confused by there wasn't Which

is why it's confusing to me that, you know, that there's there's any kind of wonder if we can find someone to do it.

I think it was I it was a wonder why we weren't able to get it done the last time.

I was told and if folks who were who were here before can correct me that the last RFP combined a number of different RFPs into one, which made it convoluted.

Is that

2021?

Over

I think it was in about probably 2023.

Yeah. And we had a request for a nexus study in '20 I mean, we've done this in 2018. I believe we did one in or at least legislation relating to it in the 2020s, early 2020s, and I guess we would have that today. But maybe staff bummed, you know, fumbled it each time. I just don't know if that's true or not. They same people haven't spoken to me on it.

Councilman Curles.

If if we've done one before, then

who did it then? I don't think

It never got

didn't do it. Never

got done. Oh.

We just passed legislation asking

for it. We just asked for it. Okay. Just curious. And and and I guess the concern is that nobody applied when the RFP went out, but we do have people who can perform this.

Several other cities have these linkage fees, and so, certainly, that this is a service that's available that we should be able to to procure.

What I would probably do, and I I don't know what to do with the rest of it, I'd probably just offer a due pass to some discussion. Have a councilman Raya in connection with the details still

that's very 20 we're to other

And And

we'll

It can be. If you're ready, I move do

that. Pass on committee substitute for ordinance two hundred sixty thousand two and eighty six being a merger consistent with the introduced version.

Okay. Was there any other

I think that would

be Vu2, if that helps for clarification. Vu2.

Yes. There's a funny joke about Vu2 that I'll share later. But yes, Councilman

Patterson. Thank you, madam chair. I have I am concerned. Did we address the MBEWB waiver coming back to counsel In cards to in all cases for us to review? Or or does it reflect an earlier version that left it up to incentive boards? I just wanna make sure that that comes back to us to be able to see what's happening with the waivers.

Okay. That that would still have the incentive boards, and I do have two public comments or two cards.

So that's maybe something we can work together offline before it comes back to tweak that part.

Okay. I mean, because I won't I don't wanna speak for yes. Because I don't wanna speak for the EDC. And in fact, I mean, Dan's here.

Mhmm. So waivers, in my opinion, are happening a little bit too, easily. And so as we talked before, we've had the MBEW program for so long. I don't understand why there's this notion that those businesses are overbidding and therefore being eliminated. And because of privacy and procurement and competition, it's not as if I can just say, let me see all the bids and compare so I'm concerned that we need a deeper look at the need for the waivers, the ongoing need for the waivers.

Sure. Absolutely. Good afternoon. Dan Moy, vice president of land development at the EDC. The MBEWBE process has sort of gone through different iterations over the last few decades at the EDC. There was a time when the individual agencies did have the ultimate approval, I believe, the early 2010s that changed to be the CREO department. Think we just are looking for the ability to have flexibility. We're not looking to start granting waivers left and right. We're open to any solution that allows us to both be responsive to developers and make sure that we are making sure projects are successful while also ensuring that the MBWB program is successful.

Thank you. So, looking for guidance on how to make sure that we have some oversight of the waiver conversation and also how do we work toward, the need not to have the waivers. Because ultimately, there's something wrong if we're constantly needing waivers. And so that's work that I would request the EDC assist with. How can we how can we help MBEs and WBEs to where primes are not asking for the waivers?

And what does that look like? What can what can we do within the law, to help them be more competitive in the in the, bid process? Because that's the feedback I get. But it's so much of a moving target, I don't I don't have any idea how to deal with it. So putting the waivers in your hands, you know, you're the person that wants to get the development done fast as do I. And so you your your side of the house might be more okay with the waivers faster than I would be okay with the waivers. So that's why I'm asking for some collaboration on that on that on that issue.

Sure. We we would be happy to work with the creative department to find a solution that's both transparent and collaborative. Our goal is to get projects done and do them responsibly. So we would be very open to collaboration there.

All right. I do have two cards. Yes. I'm sorry. Councilman Carls.

I I just want to reiterate what Councilwoman Paterson has said. I agree with her comments, and and I think that we as a council should have some type of input in that. So whatever that looks like or however we can achieve that goal, I would be in support of as well.

You. Good afternoon. I'm Babette Macy. I'm an owner, a WB owner of a firm that works in the design and construction industry, so I'd like to speak specifically to this, the waiver comment for the minority and women owned business owners. I appreciate Councilwoman Patterson's comments, and I also want to thank the other council members that are in attendance today to hear my testimony.

Along with being a business owner and resident in Kansas City, Missouri, I had the pleasure serving my community on the Planning Commission for fourteen years, nine years as chair, and through that experience we had multiple studies that we looked at to improve the development process in conjunction with the EDC and the Planning Department. Learned a lot through those three studies. We tried to implement a lot of recommendations from those studies, but I will say the two most consistent themes through those studies that developers expressed was the inconsistency that they faced when they come to the city. That may be through the planning process, that may be through what boards they need to submit, what waivers they they have. It's just the inconsistency.

What they said over and over again is if we just knew what to expect, we don't care really what it is, but that it doesn't change every time we come to develop. And so what that has caused is that just like the case you heard before this, you know, you have it's very detailed with all kinds of different studies and analysis that have done, and then, you know, it's not consistent for the next developer that comes to town. So I think that's pretty representative of what we would hear. I'd also like to highlight that in many of our peer cities, the planning department and the EDC, in many times, are co located. Here we have, you know, boards and commissions that you have to go to for the EDC, and you also have a development process that the city also goes through.

And it can be confusing as a developer when you come to the city to understand what commissions you need to go through, who you need to talk to, what authorities need to give approvals, and then what what who comes first. So that can be very challenging, and I think that I'm not sure what precipitated this. I I apologize. I didn't know we had a time limit. I apologize. I I will just say that I think when given projects are given tax statements and from any economic development agency. I think that is a time when we, as a city, should look for inclusionary aspects if they are giving tax abatements from our our city, and I thank you for my time.

Thank you. Thank you for your service.

Thank you.

Good morning. My name is Emily Marsh, owner of Welder Architects and Engineers, a women business enterprise here in Kansas City. And sort of to echo what Bebe was saying, we appreciate the comments. And so from my perspective and what I understand of the this amendment and how it's written currently versus what the proposed amendment is, Kansas City has been a place to celebrate equitable participation. And so for that reason, I have some concerns with how it's currently written and particularly proposed for M and WB Eagle waivers.

So as currently drafted, the ordinance would allow city incentive agencies to grant waivers to MWB participation goals, which expands the access to grant those waivers as they currently are. So I think we would like a little bit of clarity on how it's written now based extent to which the waiver authority would be shared with the city council versus the city initiative agencies, how best interests of the city determinations will be defined and applied, and how the good faith effort requirements will be evaluated and enforced under the proposed framework. The other part that we would support is we would hope to retain the city council as the primary authority for these goal waivers instead of expanding it. But it puts more effort on our part to reach out to those agencies, and we would hope to ensure that the projects receiving incentive and tax payments meet the robust W and MBB participation goals. We So just hope to consider the language that's in there now and review it and maybe come to a conclusion that is best for both parties.

Thank Thank you. Great. I will bring it back to committee. Are there any

other additional comments? Mary, you make a motion?

We stand by the motion before

Oh, was there a motion? Have second. Oh, all right. It's been moved and seconded. All those in favor, please say aye.

Aye.

Any opposed? The motion passes. We'll hear it on Thursday.

Next. The following.

Oh, the following because it was a due pass.

You're

right. We don't.

I'm sorry. We do not have counsel. So it's two weeks.

Two weeks. Yeah.

Many weeks. The next time

We we're weeks

from now. Some whenever it's on the agenda and Marilyn sends it.

So May Just question.

Yes. May So

did we

No. We're done.

Next question.

James, the idea of the of the MBEWB, is that the

We have not changed that. EDC is supposed to, for their testimony, work on Can

you speak it to the mic?

I'm sorry. Dan can probably explain what his answer is. I think Dan's answer was, responsive to the councilwoman's point.

And they're still bound by chapter three.

Okay. My my concern still is the same thing as councilwoman Patterson has said is that we are advocating our view.

Councilman, we can barely hear you.

Oh, I'm I'm sorry. My concern is that we are still, not the primary authority on MBEWBE. So with this ordinance passing as it is now and what mister Moray's comments was is that you're gonna work with us to come up with a resolution to this, or I'm I'm confused as to where we are.

I would anticipate that we would continue to work with the Creo department to come up with a solution. Our goal is not to take over this process or to structurally change how this process works. I think to one of those comments, we would just like to make sure that we build out a system that's very clear and explainable to the development community and responsive to the contracting community. I don't know exactly what that would look like, but that's where we would commit to coming up with a solution with the Creo department.

But the ordinance as written now gives you the authority. Is that correct?

I believe it does give some of that authority, yes, on on the tail end of projects towards when good faith efforts would normally be submitted.

I need to change my vote to no.

Howard, would you reflect that?

Yes, ma'am. All

right. We stand adjourned.