Over the past week, I've met with several folks from the Crossroads Arts District, all of whom share similar concerns. Chief among these is the sharp increase in taxes they'll have to pay if the most recent round of property assessments goes through. They're also leery of the measures the City has taken to mitigate their problem -- in particular a tax abatement plan from the Planned Industrial Expansion Authority (PIEA) that was passed in the waning days of the previous council and mayoral administration.
So far I've met with: John O'Brien, owner of Dolphin Gallery; Bob Ehinger, who owns and rents a lot of properties in the area, including the Arts Incubator; gallery owners Jim and Stephanie Leedy; David Ford, owner of YJ's Snack Shop, micro-developer and artist; Stretch, an artist, business owner and developer; and Paul and Carol Crater, who own a building that they rent to artists for low rates. Mike Eglinski sat in on my meeting with O'Brien and Ehinger.
As leaders in the art community, they are all well aware of the typical pattern for urban redevelopment in which artists "discover" a neglected corner of a city, breathe life into it and then find themselves priced out of the neighborhood by the gentrification that inevitably follows. But they say Kansas City has exacerbated this phenomenon by giving out large tax incentives for developers to build high-dollar condos, lofts, offices, restaurants and storefronts. Many of these are exempt from paying taxes for decades, yet their new, city-subsidized developments are being used to assess the value of the buildings the artists own and occupy. The artists believe this is unfair, and they fear that they will be forced to leave the Crossroads, a neighborhood they’ve done so much to revive.
They explained to me that after the previous round of tax assessments, in 2005, the City sought to protect them by freezing their taxes, so that they might remain in the area. This is important, they explained, because they were the ones who built the value of the Crossroads in the first place, and who continue to keep it hip, so to speak. This ties into a theory of economic development and urban revitalization that has been gaining currency in recent years -- the "creative class," in the words of Richard Florida, are vital to the growth and resilience of cities. This is a concept that Kansas City's civic leaders have shown support for in recent years, most notably the Civic Council's Sasaki Plan for the renaissance of Downtown.
Yet the plan that arose out of this initial idea has been compromised by developers who artificially inflate property values with help from the city. One way the plan was compromised was by defining arts-based enterprises so broadly that the high-end developers can take advantage of the designation for their own benefit. Ford even suggested that the plan would allow Bazookas -- a strip club -- to qualify for an arts tax abatement.
But there are other aspects of the plan that trouble the artists even more. For instance, it requires applicants to deed their properties over to the PIEA and then have the properties deeded right back. It also apparently requires a 10-cent-per-square-foot fee, as well as closing costs. And there's language in the plan indicating that the applicants will need to spend the money saved on taxes for upkeep of the building. Lastly, the abatement will only last for 10 years, at the end of which the properties will presumably resume the full value accrued between now and then.
Each of these provisions makes them uneasy.
They are uncomfortable with signing over the deeds to their properties to a quasi-governmental agency, even for a short period of time. Their unease stems from an arguably healthy skepticism of trusting the government in such matters.
The 10-cent-per-square-foot amounts to a significant financial hit, because their buildings are quite large. Moreover, they're unsure of why this charge is being added to the deal, and they don't know who is getting the money.
The requirements for upkeep worry them as well; they fear that this might open them up to aesthetic oversight, which is anathema to artists who feel that they are well qualified to make such decisions and who tend to prefer a more organic and funky style.
And with the 10-year provision, they fear that they'll invest a decade of money and sweat equity into something they'll wind up losing anyway.
Even though all of these individuals were the first to redevelop the area, and though their constituency is the supposed beneficiary of the PIEA plan, they told me that none of them had any meaningful participation in its creation. In fact, they're unaware of exactly who put the plan together.
I asked them each what they would like to see happen on a policy level. Jim Leedy was most succinct: "Give us what you said you would give us: Freeze the taxes without strings."
Looking long term, they would all like to see the City work with Jackson County and perhaps the Kansas City School District to create an assessment and taxation policy that doesn't include such severe increases (in the Crossroads these have been, in some cases, increases of several hundred percent). They would also like to see the City do more on the front end to create an environment in which artistic enterprises can thrive and enjoy some protection from historic market forces, so as to have a vibrant and sustainable arts district. Short of that, they'd like to see the City not pursue policy that speeds up the pricing out of artists.
I asked them if they would be interested in convening a town hall meeting, perhaps jointly with the Mayor and Jackson County Executive Mike Sanders. They were open to this idea, but they stressed that measures should be taken to ensure the conversation is productive and not mired with high emotion and vitriol.
I have several more meetings set up with artists and arts supporters in the Crossroads. I will also obtain a copy of the PIEA plan to share with the Policy Analysis Team.
- Joe Miller
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