By Leilani Haywood
Mayor Bill Baird’s debut at leading his first City Council meeting, April 19th, started with two citizens irate during public comments period because of the time limit. Baird stated that he was a policy guy and would enforce the 10-minute time limit set for public comments.
The council also heard a presentation from David Bushek regarding the economic incentives for development in Lee’s Summit. Bushek is a former Deputy City Attorney for the City of Lee’s Summit and an attorney with Gilmore Bell which advises the city regarding legal issues with incentives for economic development.
Councilman Bob Johnson asked about transparency regarding members of the board of directors appointed by the developer for Transportation Development Districts (TDD). “My question is there any way that the city council ask for an annual update as far as who the board of directors are as part of filing requirements? I was told that I need to file a sunshine request because we don’t have it and I wouldn’t get it in a reasonable amount of time.”
Johnson expressed concerns that a board of directors appointed by the developer which didn’t represent citizens was making decisions regarding transportation development. Bushek assured Johnson that the board of director’s decisions are limited to projects approved by the circuit court that created the TDD. A TDD is created by request of the developer, a group of citizens or the property owner or the City with final approval from a circuit court.
A TDD as well as a Community Improvement District (CID) and Neighborhood Improvement District are part of the economic incentive tools used by Lee’s Summit city planners and developers. Johnson noted that TDD and CID are separate political subdivisions subject to filing requirements with the Missouri State Auditor.
Bushek said Lee’s Summit also uses tax abatement and tax redirection to encourage economic development. The economic incentives align with state statute. Other tools used for incentivize development include a sales tax reimbursement agreement, development agreement, cooperative agreement and pre-development agreement.
Under tax abatement, the “dollars stay in the developers’ pocket,” Bushek said. The city holds the title to the property and the property is abated from all taxes. The owner may make payments in lieu of taxes or PILOTs. For tax redirection, a common tool is Tax Increment Financing (TIF). “The additional property taxes created by the increment can be used to reimburse the city for development,” said Bushek. “Statue allows for half of incremental increase in property taxes.”
Councilman Craig Faith asked if there was a policing method to look at the return on investment for economic incentives. “We can see a misuse of incentives leading to money not going to needs like public safety or roads,” Faith said. Bushek said there wouldn’t ever be a situation where a developer funds items outside of what a court approves under a TDD or what the city approves for a CID or TIF.
Baird asked for another work session to walk the council through the current economic incentives in place for development projects. “I look forward to a working session to dig into the process,” he said.