This past Monday I spoke at the council meeting regarding claw backs. Claw backs are the monies that municipal governments can get back from various tax incentives.
I am looking for these under two specific situations. First, when a developer sells a property, makes a profit, the city should be able to get back its investment, like other investors in the project. The other situation is when a developer fails to meet the terms of the incentive package.
Now, before I proceed further, let's clarify two things. I am in favor of developers being able to make a profit on their investments. I just feel that the city (our taxpayers) are entitled to their fair share. Next, there is a place for incentives to get certain projects going.
What got me really going (and upset) was the sale of 10 Quivira Plaza. The developer made such a high profit that even the Executive Director of our Economic Development Commission indicated that it made the property one of the highest valued ones of its kind in JoCo. A portion of the redevelopment was covered by a CID sales tax. This is a sales tax increase, levied for a specific amount and time to assist the developer in their project. What happened? The developer made their money, which they are entitled to. But, unlike any of their other investors the City of Shawnee did not get a return on its investment. In reality, according to information received from the City Manager the increased sales tax amount will be around for another 6-7 years. It will end earlier than planned as the max amount appears to be on track to be attained earlier than the original period allotted. So, the developer made their money, but our citizens are still paying a higher sales tax at that shopping center. And many customers that shop there are some of our older, retired, on a fixed income residents.
After I spoke, Councilmember Pflumm did request that the city manager have staff look into how we can go about recouping these funds on future projects.
I think we need to look at recouping funds from the profits of these projects being sold. Then we can work on getting back our money from projects that don't comply with the terms of the incentive packages.
And, if anybody says that an incentive is not an investment, they need to grab a Merriam-Webster's dictionary.
