Downtown Tax Funding Kansas City Streetcars

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Kansas City streetcar line construction underway downtown. Photo courtesy of Alex Miller, Parson and Associates.

Kansas City streetcar line construction underway downtown. Photo courtesy of Alex Miller, Parson and Associates.

Editor’s Note: This is the second in a periodic series of stories looking at streetcars in other North American cities. Click here to read our June 30 story from the city of Toronto. Next up: Portland.

Taking the transportation system of our choice often isn’t our choice. Whether you want to drive on open roads, cruise down a cycle track or hop on the bus or streetcar, other people also have ideas about how you should be getting around. On its face, that seems simple enough – the great majority of people want to drive, so lets put all of our tax money into cars. I drive, you drive – right? Thankfully it’s not that simple.

This is a story about how a group of people in Kansas City came together to build the transportation system of their choice. I’m not suggesting that San Antonio follow the same course or suggesting what worked in Kansas City could work in San Antonio. There are different legal tools available in Missouri, different users, and the metro area spans two states. This is simply an opportunity to learn how another city began to build the transportation network it has long needed.

After multiple failed attempts throughout the 1990s and 2000s to build a metro-wide light rail system, Kansas City has finally begun construction on a 2.2-mile modern streetcar line through the heart of downtown. It’s not the 300 miles of streetcar lines that Kansas City had in its heyday, but it’s something. And the residents of downtown Kansas City feel so strongly about the streetcar they’ve chosen to pay for it by taxing themselves.

The 2.2-mile line will run through downtown and many of the neighborhoods that I discussed in my previous article about Kansas City. The line will run on both sides of Main Street from Crown Center, the Hallmark Cards headquarters, through the Crossroads Arts District, the Power and Light entertainment district, the Central Business District, and into the River Market where it will circle around three blocks of apartments and offices and head back downtown. And, yes, it will pass Jones Pool.

Kansas City streetcar map courtesy of Alex Miller, Parson and Associates.

Kansas City streetcar map courtesy of Alex Miller, Parson and Associates. Click image to enlarge.

The streetcar line will have 16 stops –one every two blocks or so — and will pass a variety of restaurants, offices, apartments, art galleries, and Union Station. Construction began in late 2013 and should be completed in the Summer of 2015. Through that Summer and Fall, testing will be conducted and the line could be running by late 2015.

Embedded streetcar utilities. Photo courtesy of Alex Miller, Parson and Associates.

Embedded streetcar utilities. Photo courtesy of Alex Miller, Parson and Associates.

The timeline for construction is close to two years because the track will be embedded into the street so passing bikes and cars will be able to pass smoothly over the tracks. In order to embed the tracks into the street, large portions of road are being rebuilt to create a new roadway with the tracks placed within the road. The construction process will give the City and utility companies the opportunity to repair and replace existing utilities and allow for the installation of streetcar-related utilities.

Despite a long timeline, the work is being staggered so traffic and businesses are not disrupted.

The streetcar is not the only construction on Main Street lately. The potential for an estimated 2,700 daily riders has influenced real estate developers from across the country to take another look at Downtown Kansas City. They like what they are seeing.

More than $790 million in new construction and rehabilitation projects have been announced within a quarter-mile of the streetcar line. In order to gauge developer interest, City staff conducted interviews with the developers of the 35 currently proposed projects. Developers of 21 projects said the streetcar either directly impacted their decision-making or was the key reason for the location of their project.

These new developments include more than 1,900 new apartments and downtown Kansas City’s first residential tower in 40 years, the 25-story One Light tower.

All of this new construction is great for the vitality and livability of downtown Kansas City, but it will also make paying for the streetcar easier. At $102 million the total cost for the 2.2-mile line isn’t inexpensive, and Federal and local grants have totaled less than $40 million. That leaves more than $60 million in local costs. Rather than turn to taxpayers across the metro area, downtown property owners have voted to tax themselves. They have done this through the creation of a Transportation Development District or TDD.

A worker welds track for the Kansas City streetcar. Photo courtesy of Alex Miller, Parson and Associates.

A worker welds track for the Kansas City streetcar. Photo courtesy of Alex Miller, Parson and Associates.

A Transportation Development District is an economic development tool established by property owners to tax themselves for transportation improvements. TDDs are a product of Missouri state law and require the creation of a TDD administrative board and for a county judge to rule on the lawfulness of the TDD. TDDs can be used to pay for parking garages, new roads, bus stops, or any variety of transportation improvements or infrastructure. They operate similarly to a Commercial Improvement District.

Kansas City’s downtown Transportation Development District is a special taxing jurisdiction established by voters in 2012 in two separate mail-in votes. The initial ballot measure was to determine whether or not to create a TDD and the second was to establish a special assessment on property and a one-cent sales tax, both to be collected within the TDD. The initial measure, whether to form the TDD, was supported by 69 percent of voters. The second measure, whether to institute a sales tax and special assessment, was supported by 63 percent and 64 percent of voters respectively.

The sales tax is applied equally across an area that extends roughly one-quarter mile in all directions from the streetcar line. The special assessment on property is applied to both residential and commercial property within that same quarter-mile radius. Residential owners will pay an additional $0.70 for every $100 in assessed value. Commercial owners will pay an additional $0.48 for every $100 in assessed value.

The City of Kansas City, Missouri has issued bonds to pay for the construction of the streetcar and the funds collected through the TDD will be used to pay off the bonds. Thus, every additional structure built within the TDD adds unanticipated revenue to the TDD thus minimizing future payments of the sales tax and property assessment. All of the new construction and rehabilitation suggests that real estate developers are not turned away by the additional taxes and instead see the benefit of locating near the permanency of the streetcar line and the expected ridership.

The streetcar will be operated and managed by the Kansas City Streetcar Authority. The Authority is a new non-profit corporation established by the City after the TDD vote and is comprised of 13 people who represent citizen, business, and government interests within the TDD. The Authority, which has its own paid executive director, has the responsibility of managing the streetcar system and has contracted with outside firms to handle marketing and branding, maintenance of the track, and operational issues such as routing, dispatch, and transfers.

While there has been some opposition from downtown property owners, public opinion remains in support of the streetcar and many local businesses have stickers in their windows indicating support for the streetcar.

Kansas City streetcar rendering courtesy of Willoughby Design Inc.

Kansas City streetcar rendering courtesy of Willoughby Design, Inc.

Because downtown residents have elected to pay for this themselves the initiative did not lead to further splintering of the city by people making the silly argument that because they don’t live or work in a particular area they won’t support any new investment in that area’s infrastructure.

In fact, public support for the streetcar has been positive enough that the Streetcar Authority and City leadership have pushed forward on starting a second phase before the completion of the downtown line.

The second phase of the streetcar could be up to 7.6 miles long and similarly funded through the creation of a much larger TDD. The consultants hired to research proposed routes for the streetcar initially looked at eight possible routes, and after early research and extensive public input, narrowed it down to three routes for further examination.

The routes include traversing further south along Main Street for 3.6 miles and two routes headed East along commercial corridors. The Eastward running routes could be up to 1.8 miles and 2.2 miles. The Main Street route would terminate at the University of Missouri Kansas City and pass through or near neighborhoods such as Midtown, Westport, and the Country Club Plaza.

City leadership, the Streetcar Authority, and other supportive organizations such as Streetcar Neighbors, remain upbeat about the growth of the system now that the second TDD has received judicial approval. The initial vote will be placed on the ballot in August.

Many of the downtown residents and business owners I have spoken with are happy to pay the extra cost and put up with the short-term business disruption because they are creating the transportation system that they believe is best for their neighborhoods. Through the hundreds of public meetings, residents along the Phase Two routes have also had the chance to build the neighborhoods and transportation options that they believe best matches the goals for their neighborhoods.

At some point, through some mechanism, San Antonio will have a multimodal transportation system that allows for choice and opportunity for all of its users.

In the meantime, go to Kansas City and ride the streetcar. It’s free.

*Featured/top image: Kansas City streetcar line construction underway downtown. Photo courtesy of Alex Miller, Parson and Associates.

RELATED STORIES:

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Toronto: The City that Saved its Streetcar Tracks

Street Fight Over Streetcars

Clearing the Air at Streetcar Town Hall Meeting

Billionaire Outsiders Take Special Interest in VIA Streetcar Plan

2 thoughts on “Downtown Tax Funding Kansas City Streetcars

  1. Downtown property owners were against the streetcar in Kansas City. It was renters that voted for it while the owners of their buildings railed against it. The TDD district was gerrymandered to pass on the backs of some 300 twenty-somethings. It’s a scam.

  2. Scott, You are looking through rose colored glasses. As a downtown KC resident I can tell you you are wrong on so many points. Phase 1 was voted on by less than 550 voters that are mostly renters anyway. Phase 2 lost in a landslide 60%/40%. The city was very divided over the decision on both phases. While there is some great new business development you fail to mention all the other tax incentives offered. Construction is not staggered. Instead it is a nightmare across the full two mile stretch making driving and walking a nightmare. Water interruption and a gas line was hit.

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