February 25, 2024

Keeping Media and Government Accountable.

Does KC Streetcar Spur Development?

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Is the Kansas City Streetcar spurring development along its route? That’s the conclusion of KCUR.

In a story about the redevelopment of the Netherlands Hotel, the public radio station’s news service writes the 11-story building’s redevelopment is “linked to the planned streetcar extension.” Show-Me State Institute’s Director of Municipal Policy Patrick Tuohey writes not so fast.

“Linked? What does that mean?…Are developers buying up buildings along the streetcar route, investing their own money and contributing to the city and county tax rolls all because of the taxpayer funded streetcar? If so, that would be news,” he writes in a blog post.

Is the KC Streetcar spurring development? KCUR draws that conclusion, but Show Me Institute’s Patrick Tuohey writes not so fast.

As the KCUR story explains, the project developer, Exact Partners, are seeking a 10-year, 75 percent tax abatement and intends to use historic tax credits to finance the renovation. Taxpayer subsidies, Tuohey writes, are likely a bigger catalyst for development than a streetcar.

“While the developers may like the streetcar, how likely is it that they would be working on these buildings if there was no city tax abatement or state tax credit?” He asks.

Nationwide, public transportation ridership numbers are declining in most urban areas, according to October 2017 data  from the Federal Transit Administration. Light rail transit didn’t fare well. In Charlotte, October 2017 ridership dipped 17.5 percent from October 2016.

That’s not stopping Kansas City officials from doubling down on the streetcar. Although three Kansas City streetcars were frozen out of service on Thursday due to ice, and despite trends of declining public transportation ridership, Kansas City is seeking federal taxpayer money to expand the streetcar. The Kansas City Streetcar Authority is gearing up to apply for approximately $100 million in federal funds for an expansion project that would expand streetcar service south to UMKC.

No word yet on how Kansas City officials plan to sidestep an ordinance adopted by voters that prevents the city from spending money on the streetcar without city-wide approval.

Tuohey writes that KC raised taxes to pay for the KC streetcar and then lowered taxes to spur development along the route.

“Imagine what would happen if we scrapped the streetcar and lowered taxes for everyone,” he writes.



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