The Kansas City Council approved more than $9.7 million in tax exemptions for Fidelity Security Life (FSL) Insurance to build a new office building less than a mile from its existing offices.
By an 11-1 vote, the project was given an estimated exemption of $7.5 million in property taxes during a 15-year period and an estimated exemption of $2.2 million in sales taxes on construction materials during a two-year period. The project will be financed through taxable industrial development revenue bonds not to exceed $84 million.
The 11-story office tower is expected to cost $79 million and be built on about 2.6 acres.
The following taxing jurisdictions will be affected: Kansas City, Jackson County, the state of Missouri, Kansas City Public Schools, Jackson County Community Mental Health Fund, Development Disabilities Fund, the state’s Blind Pension Fund, Kansas City Public Library and Metropolitan Community College.
In addition to mentioning many of the organizations affected by the tax exemption, Ryana Parks-Shaw, Fifth District Councilwoman and the only member who voted against the initiative, voiced opposition to a 15-year period of property tax abatement. Fidelity will receive a 70% property tax abatement during the first 10 years and 30% in years 11 through 15.
“I think the fact that we continue to incentivize big business and companies and not allocating dollars to our taxing jurisdictions on behalf of our students, those suffering or needing the mental health dollars, to the libraries… I am concerned about the fact that we are continuing to do this,” Parks-Shaw said. “I know that we as a council have talked about and have taken some action to show our dedication to not incentivizing big business on behalf of our kids. But here again is another opportunity. We have to be able to make this decision on behalf of our students. It’s been shown that they can do this in 10 (years). Why are we giving them an additional five?”
Lee Barnes Jr., Councilman At-Large in the Fifth District, said the proposed construction area currently results in $100,000 annual property taxes. He said the project’s annual property tax revenue is projected to be approximately $280,000 during the first 10 years, approximately $700,000 in years 11 through 15, and $1.1 million thereafter.
“This is really about retention of approximately 300-plus jobs,” Barnes said.
Most of the discussion before the vote revolved around the amount of parking spaces included in the project.
“There are thousands literally thousands of parking spaces within two blocks of this project and here we are incentivizing a project with 400 parking spaces,” said Eric Bunch, Councilman representing the Fourth District. “I want to highlight that as a problem we should seek to fix through policy as a policymaking body. This is driving up costs of every single project.”
Katheryn Shields, Councilwoman At-Large in the Fourth District, said many lenders require large office complexes to include adequate parking when completing project financing.
The project was supported by Hallmark Cards, one of the top 15 employers in the Kansas City region and located near the proposed project. Stacey Paine, executive vice president of real estate for Hallmark, said the construction fulfills the vision of the Crown Center area as an office community with top businesses in downtown Kansas City.
“The long-term commitment FSL is making to downtown Kansas City is significant and will pay dividends to Kansas City for years to come,” Paine wrote in a letter to the Neighborhood Planning and Development committee of the Kansas City Council. “In addition, the FSL project will complete the vision Crown Center has been implementing for the southwest parcel of its master plan.”
This article was originally posted on Kansas City Council approves millions in property, sales tax exemptions for construction of new Fidelity office tower