The economic development subsidy regime downtown has become a policy paradox. If previous subsidies successfully created a vibrant economic center, then why are they still needed? If previous policies failed, why are we doubling down on an economic development regime that doesn’t work? The reason seems to be that corporate welfare is sought not because it is needed, but because the money is there for the taking.
Developers, who are no fools, don’t have any reason to believe that the City won’t say no to them. And any developer with common sense can look at everyone else getting sweet deals and reason, “why not me?” We were reminded of this once again in a story in The Kansas City Star earlier today about the plans to build a 13-story extended stay hotel downtown. According to the paper,
Owner Scott Pedersen said he would seek property tax abatement for the project, which he said would cost more than $36 million.
“Most of the new hotels downtown have applied for and received certain incentives to help the revitalization of downtown, and we’re doing the same,” he said.
Remember, this was also the case when the Intercontinental Hotel on the Plaza sought a blight designation so it could create a Community Improvement District to charge guests an additional sales tax to be used to replace carpets and wallpaper. Once other hotels learned of what the Intercontinental was seeking, they planned to seek the same.
We don’t fault businesses for seeking every advantage they can get. But we’d like to see city leaders recognize that until they say “no,” the requests will keep coming.