Sunday, December 9, 2007
Four weeks ago the Board of Aldermen amended a tax abatement agreement with HyVee Grocery Store to include a section regarding “claw backs”. Claw backs is the term given to those conditions which allow a governing entity to take back tax abatement agreements if the entity receiving the abatement does not live up to its end of the bargain. In most cases, that “end of the bargain” is very simple. The business or property owner must keep the property receiving the abatement open for business. It is a common sense way of guaranteeing the taxpayers that they are getting their money’s worth from the property owner. When the Board approved the amendment to create the “claw back” with HyVee they were applauded for taking care of business in such a timely manner. But that was four weeks ago. Last Tuesday, the Board reversed its policy for two property owners in Downtown Raytown. Jeff Page and Cary Properties, LLC (represented by Gary Knabe) are two local businessmen who have applied for tax abatements on property they own located in Downtown Raytown. Jeff Page’s property is actually two offices located at 6109 / 6111 Blue Ridge Boulevard. One has been converted to a coffee shop on Blue Ridge Boulevard (Benetti’s Coffee). The other office is vacant. Gary Knabe is the principle owner of Coldwell Banker, Hometown Realty, Inc. He has located his office on old Raytown Road, just north of the Raytown’s old wooden bridge. The Downtown area is economically blighted. The argument for giving the abatements is strong. But two actions by the Board last Tuesday make little sense. First, the Board took the recommendation of a ten year 100% abatement and increased to 15 years. The five year abatement was set at 50%. No real justification was given for increasing the term of the abatement – unless you consider “that’s what they want” a reason. Second, a heated discussion regarding the inclusion of claw backs into the agreement took place at the meeting. Though it is unclear as to how votes would be cast on such an issue, it is clear that there is a division on the Board over requiring the owners to keep their end of the bargain should the abatements be approved. Remember, this is the same Board that unanimously approved the insertion of a claw back clause on the HyVee property. Both the HyVee property and the two properties in Downtown Raytown are 353 Tax Abatements. The property owners have voiced opposition to including the claw backs in the agreement. But from where I stand it should not be a negotiable item. The taxpayers, through their elected officials are giving the two businessmen some very healthy tax abatements. Guaranteeing that the properties remain operational and an asset to the City of Raytown is not out of line. The claw back clause should be inserted into the agreement to protect the interests of Raytown taxpayers.