Six Projects Get More Money Via East Side Sales Tax Following Policy Changes, Funds Are Expected to Help Complete Projects
Published April 30th, 2024 at 6:00 AM
Above image credit: Founder Myron McCant looks through a window at the children served at KD Academy in Kansas City, Missouri. McCant and his wife were recipients of a taxpayer-supported Central City Economic Development (CCED) grant that was crucial in obtaining financing for a 24/7 child care facility that supports working parents on the East Side of Kansas City. (Dominick Williams | Flatland)Six development projects on Kansas City’s East Side are getting an additional $2.3 million from the Central City Economic Development Sales Tax.
The ⅛-cent sales tax is intended to support development in an area bounded by Ninth Street to the north, Gregory Boulevard to the south, The Paseo to the west, and Indiana Avenue to the east.
More funding for the six projects was granted based on recommendations from the new CCED Sales Tax Board. It is intended to help these ongoing projects cross the finish line, said Dion Lewis, deputy director of the Housing Community Development Department.
The news comes several months after the board revised the previous policy for project modifications. The earlier policy only considered modifications to ongoing CCED projects if they met specific criteria.
The previous policy specified that applications were only considered if the modifications were limited to a 10% or less increase in land area, a 10% or less increase in the number of units or square footage, or a 10% or less increase not exceeding $150,000 of the project cost.
Lewis said the original policy was not conducive to how the COVID-19 pandemic affected the CCED program. The pandemic hit the CCED program particularly hard because it works primarily with smaller-scale developers who may need more financial assistance, Lewis said.
The policy was amended to aid projects hampered by issues stemming from the pandemic, such as elevated construction costs.
The amended policy modification adjusts the initial numbers and adds more guidelines.
Any project requesting an increase in funding must have received a CCED award in one of the first four funding rounds, must be contracted with the city, must not have completed construction, and must be able to provide evidence that the requested modification can complete the project.
Additionally, the total amount of CCED funds awarded to a project cannot equal more than 45% of the project budget, and the requested increase cannot bring the total amount of CCED funds to greater than 45% of the project budget.
The requirements also specify that the increase in funds cannot be because of “material changes in CCED approved scope, plan, design, or concept.”
There must not have been any ownership changes for the project development team, and the project must not have received an earlier award of more funds under the modified policy.
An Evolving Program
The CCED program has faced challenges. In 2023, City Auditor Douglas Jones identified a few issues with the tax, noting that an oversight may have allowed a contractor to use CCED funds in a way inconsistent with their contract.
The progression of the CCED program has generated mixed opinions regarding its success. In October 2023, Gwendolyn Grant, CEO of the Urban League of Greater Kansas City, called the program a “total failure.”
Lewis emphasized the importance of transparency within the CCED program and said he has high expectations for completing the projects currently in the pipeline.
“I think we’re going to make great strides over the next two years, right,” Lewis said. “So, let’s just say it’s going to look a lot different.”
Since its approval in 2017, the tax has provided about $53 million for 35 projects in and around the Prospect Avenue corridor. By October 2023, four of those projects at six locations had been completed.
Flatland in Focus
Nailah M’Biti, founder and CEO of Accomak Development Group, said the development process involves more than meets the eye.
“You see the product, which are the structures, but all of the understanding the dynamics of the housing and the land use, all of that is also a very crucial part of development,” M’Biti said. “Understanding how long it takes to actually start with a conceptual design of anything and actually get it to the point where you’re handing keys to somebody — it’s generally a two-to-three-year process, just depending on funding, and all other kinds of things.”
M’Biti previously served as the chief operating officer and the chief real estate development officer for the Ivanhoe Neighborhood Association, which is one of the entities receiving more CCED funds. The funds are supporting two projects for Ivanhoe, one of which is a development for senior housing, and another intended to provide housing for veterans.
The funds are an essential part of stimulating development on the East Side, M’Biti said.
“Between CCED and the housing trust fund that was initiated in ‘21, it’s made it a lot easier for nonprofits in neighborhoods to realize their dreams of development in their areas,” M’Biti said.
Alana Henry, interim executive director of the Ivanhoe Neighborhood Council, shared M’Biti’s sentiments and said the CCED program can help alleviate the unequal playing field within the development sphere.
“I think it also to a point can assist in reducing the impacts or the likelihood of gentrification in many areas across the city because it gives sort of an avenue for these smaller agencies, smaller nonprofits, smaller developers, who are community-focused and really invest in their communities to ensure that development projects fit not just the culture of the community, but also fit the needs of the community,” Henry said.
M’Biti said the recent policy modification was beneficial for the projects that received help in earlier CCED funding rounds. M’Biti also said she hopes to see the CCED program recognize other shifts happening in the development sphere, such as the change in International Energy Conservation Codes (IECC) that affected developers last year.
“I’m excited about the fact that CCED is also evolving as things change in the development space,” M’Biti said.
Henry said she would emphasize that the city is open to feedback and responsive to the needs of smaller developers.
From a personal perspective, Lewis said he hopes to see the sales tax renewed and potentially expanded.
“My hope is that the city of Kansas City kind of sees how much we’ve grown as a program and have high interest in continuing to improve the east side of Troost all the way, you know, to (Interstate) 70 and 435,” Lewis said.
Julie Freijat is a master’s student at the University of Missouri and a Flatland contributor.
