Tax incentives help trim the décor of luxury condos near the Plaza.

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Tax incentives help trim the décor of luxury condos near the Plaza.

Things are happening south of the Country Club Plaza. The University of Missouri-Kansas City is building a trendy residence hall along Oak Street. A public library branch will occupy the lower floors of a $70 million office building under construction at 49th and Main streets. New condominiums at 51st and Walnut streets pay homage to the Mediterranean architecture of the Plaza.

"I don't know any neighborhood in the city that's had as many projects in the last ten years," says Keith Spare, president of the South Plaza Neighborhood Association.

But where Spare sees progress, the city sees ruin.

And where the city sees ruin, tax dollars follow.

Because a portion of the neighborhood is considered blighted, a lavish development a short stroll from the Plaza qualifies for government assistance. The Residences of Kirkwood -- where housing prices begin at $350,000 and climb to $2 million -- is receiving $8.7 million from the city's Tax Increment Financing (TIF) Commission.

TIF is a tool cities use to encourage development. When TIF is in place, developers share the tax revenue that their projects are expected to generate. Local governments part happily with the money on the presumption that, without the incentive, development would not occur and the taxes would not exist.

Standard TIF deals compensate developers for the increase in property taxes that their improvements trigger. But Kansas City also lets developers feast on sales taxes. Buy a hamburger in this town, and a few pennies get kicked to them.

Kansas City helps developers another way. In most cities, TIF projects are restricted to distressed areas. Here, blight is interpreted liberally -- so liberally that tax money can be used to clear land for a luxury community that has adopted the pretentious one-word slogan "Uncompromised."

The $87 million Kirkwood project covers 10 acres south of 49th Street between Wornall Road and Main Street. The development will create a semiprivate retreat of 107 high-end residences. The centerpiece is a 12-story high-rise in which future inhabitants will have their choice of granite or marble floors in the master bathroom.

Options abound. Kirkwood's developers, DST Realty and SCOL Inc. (controlled by the Merriman family), are also building row houses like those on the East Coast and a twenty-unit mid-rise meant to evoke Tuscany. Single-family lots flank a park (Kirkwood residents only, please). The townhouses have sold out already.

Kirkwood is eligible for tax incentives through the County Club Plaza TIF Plan, which was created in 1997. At the time, the J.C. Nichols Company owned the Plaza and the Kirkwood site. But Nichols and other developers were unable to design residences for the site that appealed to the neighbors. Weeds prevailed.

Kirkwood's developers, in contrast, were able to sell the neighborhood on the idea. "We liked the diversity of the project," says Spare, who drove a shovel into the earth at Kirkwood's groundbreaking. "Diversity" in this instance would seem to serve as shorthand for "shorter buildings" and "fewer people."

Kirkwood's developers were also shrewd in their request for reimbursement. The bulk of the $8.7 million subsidy pays for infrastructure, such as sewers and sidewalks. A little-used ramp off Wornall Road will become a public green space. DST Realty President Tom McGee tells the Pitch that Kirkwood's TIF is appropriate because it typically falls on the city to provide such work.

"We could have left out some of those amenities, but I think not only Kirkwood but the entire neighborhood, the Plaza, would be a lesser place because of it," McGee says.

Paul Minto, a past president of the West Plaza Neighborhood Association, says there is always a desire to see life spring from idle property. But he questions why one neighborhood should seem to derive all the benefit.

Minto says bestowing tax money on Plaza developers is like applauding an athlete for tying his shoes correctly. "The area around the Country Club Plaza is some of the most prized real estate in the city, sought after by developers for decades. To plead that that property couldn't be developed without tax-increment financing is an insult to anyone who owns property anywhere else in the city."

The city lacks a policy to guide its hand in these matters. City Auditor Mark Funkhouser has complained about this for years, noting in a 1998 report that "the use of TIF has been driven by private developers rather than explicit public strategies and policies."

But in the view of City Hall under Mayor Kay Barnes, clarity can be confining.

Andi Udris, president and CEO of the Economic Development Corporation, the city-funded entity which administers TIF, says the case-by-case approach leads to better decision making. "The market changes faster than any public policy," Udris says. "By the time we decided the public policy, we'd be fixing the problem we had five years ago."

Minto says he is thrilled to see the well-to-do return to the urban core. But he does not believe tax breaks should gild their cage. The process, he believes, has become too ritualized.

"That used to be a story," Minto says. "I guess nobody gives a rat's ass anymore."

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