Members of a citizens’ group opposing a massive Parkville development are balking at the recent request by the developer for financial tax incentives to help pay for portions of the massive project.
A spokesman for the group Citizens for a Better Parkville, who has publicly opposed the way the city has handled the development, said his group can’t understand why city officials are willing to discuss tax incentives that will save the builder money by deferring some costs associated with the development plan.
But city officials state the tax incentives also benefit residents, who stand to gain from infrastructure, such as roads, bridges and other improvements surrounding the development at Interstate 435 and Missouri 45.
The citizens’ group recently learned, through information obtained through the Sunshine Law, (designed to promote transparent government practices), that developer Brian Mertz has entered into a legal agreement with the city to explore the use of several financial tax incentives, including Tax Increment Financing (TIF), Community Improvement District (CID) and Transportation Development District (TDD).
The tax incentives allow builders to recoup some of the costs of development by providing tax incentives, such as tax deferment for certain expenses. The citizens’ group has said they believe city officials are eager to develop the land, in part, because the city is paying annual sewer fee assessments on the property. The city acquired a portion of the land in the area after an earlier planned development failed.
City Administrator Joe Parente, however, said an agreement is meant as a safeguard for the city and its residents. Under the terms of the agreement, the developer will reimburse the city the $30,000 fee for a “fiscal impact” and “rate of return” analysis to be performed by Springsted Incorporated, he said. The agreement became official Jan. 2 when the Parkville Board of Aldermen approved the terms.
The agreement also holds the developer responsible for additional expenses the city may incur during the analysis process, including for example legal fees, according to a city document.
But citizens disapprove of tax incentives.
“If this thing won’t stand on its own two feet without incentives, why would we do it?” asks Jason Maki, a spokesman for the citizens’ group.
Maki added that any approved incentives will be in addition to a Neighborhood Improvement District (NID), already assigned to the area proposed for the development. NIDs are designed to finance public improvements in an area through property tax assessments.
But Parente said although there is a possibility of such incentives, nothing is yet in place.
“We’re just getting started on that phase of it,” he said during a telephone interview.
However, Maki said the group’s Sunshine Act request reveals city officials were discussing such tax incentives several days prior to a planning and zoning department hearing in which the development was first discussed in a public meeting.
He said the date on tax incentives communications between city leaders and Mertz is Friday, Sept. 7, 2018, while public discussion of the development did not begin until the Tuesday, Sept. 11 planning meeting.
“The developer and the city moved this thing forward knowing full well…they were planning to look into shared risks,” Maki said. “He (Mertz) wants to buy land against the wishes of neighbors, then ask those same neighbors to participate in the risk or assume all the risk,” said Maki, whose group also recently filed a letter of complaint against the city with the Missouri Attorney General.
“It’s a great business plan for him, but not a great deal for Parkville.”
An attorney hired by Maki, who filed the complaint letter, declined comment about the financial tax incentives.
Parente said such tax-based financial incentives not only benefit the developer in cost saving, but also residents since incentives help defray the costs of infrastructure surrounding new developments, from roads to bridges.
“Costs for public improvements often can’t be supported based on other economic tools available…” Parente said, adding that the use of such incentives is “profitable for the developer and beneficial to the public.”
Maki said if such incentives are instituted, it will make the development “a very heavily taxed” development.