“Super TIF” EATs Kansas City Alive!

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The recent opening of a nine-story office building in Kansas City serves as a reminder of the intense controversy in that city over the abuse of tax-increment financing. The Briarcliff development was a major point of contention in last year’s mayoral race, when candidate Mark Funkhouser (who won the election) denounced the developer’s use of an extreme form of that financing tool known as Super TIF.

Whereas a regular TIF district takes a bite out of local tax revenues, a Super TIF project will swallow them whole. Super TIFs redirect 100 percent of the property tax increment and 100 percent of the economic activity tax (aptly, EAT) increment of the development district. Super TIF is a project specific designation given to development already occurring within a TIF district.

Included in the EAT increment are corporate and individual earnings taxes, sales tax for retail and utilities, use taxes, convention and tourism taxes on food and beverage sales, gross receipts taxes and franchise fees. Use of TIF and Super TIF in Kansas City continues to rise and is projected to result in a 27 percent growth rate in tax increment payments made to the private sector next year. In the meantime, the city’s tax revenues have risen by only 7 percent.

Widespread abuse of TIF as a redevelopment tool for urban economic blight in Kansas City led to the creation of the Super TIF mechanism. Its original intent was to allow legitimately blighted areas compete with regular TIF districts in Kansas City’s suburban greenfields. However, if developments such as Briarcliff are any indication of Super TIF’s future, it appears that it too is on its way to becoming perceived as entitlement by developers. The Briarcliff project, a hotel and office building development in an upscale area of Kansas City, received $26.7 million in TIF and Super TIF for a $91 million expansion in 2006. Regarding the project, Councilwoman Bonnie Sue Cooper, engineer of the gigantic incentive, put it accurately: “We’re kind of the cash cow.” No disagreement here.

3 Responses to ““Super TIF” EATs Kansas City Alive!”

  1. Mary Lindsay Says:

    Thanks for shining a light on the problem of Super TIF’s in Kansas City. Briarcliff is a prime example of a tax incentive going to an affluent area that doesn’t need the boost. Briarcliff is in the city council district that has the highest average income and the lowest unemployment rate.

    For details, check out the economic study, UNEVEN PATCHWORK: TAX INCREMENT FINANCING IN KANSAS CITY, MO at: ReclaimDemocracy.org/KC (Scroll down and click on the title of the study.)

    Be warned: The facts are sickening!

  2. Howard Greenwich Says:

    Good lord. I’ve been involved with TIF reform for about 15 years now and this is a new one to me. A program that diverts 100% of all taxes to a development is staggering both from a policy perspective and for its potential for political corruption. How much would a developer pay/contribute for a tax-free project? I don’t think this policy could get out of the gate without causing more problems than its supposed to fix.

  3. Kansas City Forced to Bail Out TIF Districts « Says:

    […] to debt service for tax increment financing (TIF), sales tax increment financing (STIF), and Super TIF projects in the […]

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