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Kansas City Transit Agency Considers Economic Development

The Kansas City Area Transportation Authority is looking to incorporate public transit into the region’s development conversations, as a way to incentivize and influence growth in the area.

(TNS) — For years, Robbie Makinen has wanted the region's transit agency to do more than just move buses and people around the Kansas City, Mo., area.

The president and chief executive of the Kansas City Area Transportation Authority, Makinen wants the agency to be more intertwined — and have more influence — across the region. That motivation helps explain why KCATA is looking to play a more significant role in economic development across its seven-county region.

The agency is even considering leveraging its unique bi-state position to offer development incentives — which would give it the unmatched ability to work with developers in both Kansas and Missouri.

Makinen says he doesn't want the transit authority to compete with local cities or economic development organizations. But he said transportation has generally not held much influence in development practices. And he said the transportation authority should have more input than simply being asked about bus stops once a new development is planned.

"The whole reason we're even having this conversation now is because public transit has always been an afterthought," he said.

The CEO wants to tap into the unique power of the agency, which crosses city, county and state lines. The agency was created in the 1960s as a result of a bi-state "compact" approved by state legislatures in Kansas and Missouri and ratified by Congress. While its position is unique, Makinen said the KCATA has never fully utilized its potential.

"The KCATA had over the years become a very good bus company," he said. "What it needs to be is a transit authority."

The agency is still exploring its options around development. But the transition has been in the works for some time: several years ago, the agency launched Ride KC Development Corporation, a separate nonprofit overseen by the KCATA squarely focused on economic development.

During a May meeting, lawyers for the agency laid out the possibilities for the RideKC Development Corporation board. They said the agency was empowered to issue bond financing, which would allow KCATA to take title of land from developers, award property and sales tax abatements and enter into lease-back agreements with developers. That's similar to how agencies like the Port Authority of Kansas City offer incentives to developers.

"We are looking to utilize tools and powers that KCATA has that have been, we would argue, maybe perhaps dormant," said attorney Herbert Hardwick. "No other entities could utilize their powers in this way."

Attorney Allison Bergman said other transit authorities across the country have used similar practices to offer development incentives. But she acknowledged the idea could face push-back or even legal challenges in Kansas City.

"There could be some resistance to this because it's new," she said. "There's always uncertainty around new."

It's unclear how such a move would be viewed by other agencies across the region.

T'risa McCord, interim director of the Economic Development Corporation of Kansas City, said she didn't know enough about KCATA's plans to comment.

The EDC is the umbrella agency overseeing several incentive-granting entities, including the Tax Increment Financing Commission, the Planned Industrial Expansion Authority and the Land Clearance for Redevelopment Authority

Likewise, officials across the state line in Johnson County had heard little about Makinen's aims.

"That's interesting. We'd certainly have to have more information about it," said Ed Eilert, chairman of the Johnson County Commission.

He said the county had tried to connect some major industrial developments like Logistics Park Kansas City in Edgerton with transit lines, but traditionally hasn't intertwined transit and economic development. And he wonders about the transit agency's legal authority to offer development inducements.

"It would be a challenge for me to understand the ATA giving economic development incentives unless they specifically own the land," he said.

Mass Transit in Kansas City

KCATA has purchased or acquired several properties along major transit routes like its Prospect Max line that it hopes to help redevelop. Those sorts of projects — where the agency owns the properties it's developing — are unlikely to ruffle too many feathers. But it's another story if the agency starts luring developers with its own incentives all across the region.

"I don't think that would be very well received if they just decide they can come in and have authority over local councils and their development practices," said Blake Schreck, president and economic development director of the Lenexa Chamber of Commerce. "Maybe they have some other authority I'm not aware of, but I don't think they can usurp any kind of municipal policies if they're going to go into Olathe or Overland Park or wherever."

Schreck said Johnson County communities have tried incorporating transit into development. But they often face a lack of demand in a sprawling, car-centric metropolitan area with people moving in all different directions.

"It's a chicken-or-the-egg argument we've been having for a long, long time. The transit advocates always think if you build it they will come. But the other side of the coin in the real world there just isn't a lot of demand for mass transit," he said. "It's just not as easy what they want to do in the real world as it is philosophically."

He pointed to Lenexa City Center, a mixed-use development that includes offices, a public market and apartments. It's much more dense than the typical suburban project and includes bus connections. But Schreck said ridership has been low there.

"There's still a lot of lonely buses sitting there," he said.

But some believe Kansas City is finally ready to embrace mass transit. The Kansas City Streetcar, which is expanding both north and south in the coming years, has shown how mass transit can lure new development and redevelopment.

Through the One Ride KC initiative, regional transit advocates are currently seeking to secure a single revenue source for transit, rather than relying on the patchwork of funding streams that currently exists across the region.

Overland Park Councilman Logan Heley, who serves on an advisory board for that initiative, supports the idea of KCATA having more influence with economic development projects. That's because the nature of projects — how dense they are, where they are and how much parking they include — can greatly impact demand for mass transit.

"I tend to believe that in Johnson County we have never adequately funded transit so you get a system that is not adequate," Heley said. "I think you do see that when we've provided efficient, fast, reliable service, there is demand for that in Johnson County. The thing is there are just very few areas where we have efficient, fast and reliable service in Johnson County. So we haven't really quite made that leap."

While Kansas City's suburbs have long been built around the automobile, Heley said that's beginning to change. He pointed to downtown Overland Park's renaissance as an area that has seen increased demand for transit as more people and businesses flock to the area.

"In Johnson County, we're still very car driven," he said. "But I do get the sense that that is changing."

Weaving Transit Into The Process

Kansas City in 2017 adopted a Transit Oriented Development policy, which aims at concentrating development around transit lines or stations. The idea is to create dense, compact and pedestrian-friendly developments that include a mix of uses.

But that policy has so far been more of a suggestion than a requirement.

Jeffrey Williams, Kansas City's planning director, said the city doesn't want to place too many requirements that may dampen interest from developers. But he said planners are looking to implement more of those projects in the future, particularly on major transit routes of Troost and Prospect.

And Williams hopes KCATA can play a role in encouraging redevelopment in areas like the east side that have traditionally lacked investment that has benefited other parts of the city.

"I'm excited for the opportunity if the ATA can identify additional tools to help fund more development," he said.

Joe Reardon, who previously led the KCATA, said the agency's bistate compact was originally designed for a robust authority that did more than just move buses. Now the president and CEO of the Greater Kansas City Chamber of Commerce, Reardon said economic developers have begun to think more about transit in recent years. That's because buses are key to moving people between workplaces and home.

"I think currently the economic development process is contemplating transit more than it ever has. But clearly Kansas City, up until recent times, has been a city driven by the car and single use automobiles."

KCATA's move would follow the 2019 truce in the long standing economic border war between Kansas and Missouri. Officials on both sides of the state line agreed to stop the much-criticized process of offering tax incentives to companies that move across the state line without adding new employment to the region.

Reardon said the chamber would back the transit agency's use of incentives in both states if they are used to recruit new jobs and investment to the region.

"We would be supportive of incentives used in a way that spurs that kind of development and focuses on areas where there's been disinvestment," he said.

Makinen said he's well aware of the simmering border war tensions. But he said having a single agency acting in both states could actually help sustain the truce as developers would be unable to pit municipalities or states against each other.

In Kansas City, critics often contend that the city's vast array of economic development programs allows developers to shop around to different agencies in search of the richest incentive packages. As part of a wider move to change economic development practices, Kansas City Mayor Quinton Lucas wants to consolidate the city's various agencies under the leadership of a single board.

His legislation is expected to be on the City Council agenda in the coming weeks. The mayor's office did not respond to multiple requests for comment.

Makinen said he doesn't want the KCATA to compete with the likes of Kansas City's TIF Commission or Port KC. But he said transportation should be a major player in development decisions moving forward.

He pointed to the recent recruitment of Urban Outfitters. The Philadelphia-based company plans to add thousands of jobs at a new distribution facility near Village West in Kansas City, Kansas.

With such a far-flung location, the company brought KCATA officials into negotiations early on to make sure transit was not only considered but a central part of the incentive package. In addition to millions in tax credits and tax abatements, Kansas offered up to $5 million from its Job Creation Fund to support childcare and extend bus routes to the new facility.

"The optic in this region is changing when it comes to how important public transport is for workforce," Makinen said. "We were a part of the process. We were baked into the process."

Lawyers will continue exploring the options for KCATA in the coming months and Makinen said he will begin meeting with city leaders, school districts and other people affected by development. For now, no immediate action is pending about offering incentives or making other major changes.

"That stuff is on the table. But we'll see," he said. "I don't know what the answer is. But I know this agency needs to act like an authority and not a bus company."

(c)2021 The Kansas City Star (Kansas City, Mo.) Distributed by Tribune Content Agency, LLC.
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