Claw Backs
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.
Comments
What, pray tell, is he doing now?
By the way, whoever made the comparison between Foul Mouth and Clay Chastain hit the nail on the head. Both of them glory seekers interested in seeing their names in the newspaper.
Why should it be enforced on Hy-Vee and not 2 small properties? It is true that the tax on these properties is small when compared to Hy-Vee. It is not so small for the school district which rips us all off with high taxes. Obviously these owners intend to keep the property occupied and businesses open, but there are unknown issues. Businesses are known to fold. Hopefully these won't fold. The Code Gestapo has a negative inpact on business and they could cause a business to give up and move on or simply not to locate here. Raytown wants to attract business. What if every other 353 applicant refuses a claw back and refuses to locate her unless they are exempt? The possibility is there could be numerous 353's without claw backs. What if they go vacant as businesses sometimes do? The city and the tax payers are again ripped off as with the Schnuck's deal where the city was schnuckered. The BOA is opening the barn door.
It is descrimination to require a claw back of one but exempt 2 others because they have less money. This will set a presicedent and all can demand equal treatment!
It is my understanding that this hearing will have a final reading at the next BOA meeting. I will be surprised if the library and school district don't register a protest. Hopefully citizens will appear to protest, but I am apparently the only one who speaks because the BOA appears to be deaf.
I want to buy a rental property. Can I have a 353 for 15 years with no claw back after I buy it?
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Reference Al & Chastain, in my opinion, anyone who would spend money to influence an election or for any other reason in a city they no longer live in is a complete idiot.
Andy Whiteman
The personalities named are enough to tell the rest of us oldtimers that a sweetheart deal is being sought on dropping the clawbacks.
These small potatoes are "the real good old boys" that all the naysayers and press have been wrongly criticizing the rest of us for the past two years...whether it was the charter, the mayor's race, etc.
I doubt that you need any help, Greg. But if you do, post here for One Up. And I suspect there's aomeone else here I know who can also supply you with some history of the selfish little people asking for yet another business benefit when real business people are willing to step up, take their chances and pay their own way. But, what can we expect with the giveaways handed out to the Whore-Marts, etc.
Mr's. Page or Kanabe.
However it is no secret that both have close ties with City Hall and I fear there are things going on there that aren't exactly fair.
For instance some city officials pushing one business over another
because of friendship and past business owner employment by the city.
It's no secret that Mr. Kanabe was an alderman in Raytown and still has friends on the right side of the room.
But if this town ever wants to get rid of the "Good old boy" image they seem to want to shed so badly they might want to think about what they do.
I'm for anything to make the downtown area nicer looking and bringing in new businesses but it has got to be fair for everybody not just friends of the city. It's bad enough being known as a city with a "Good old boy"
image but we don't need to add, "It's not what you know but who you know."
It's not right to give breaks to one business and not others. It's not fair
and damn sure unethical for anyone in City Hall to promote one business over another just because they happen to friends with a certain owner.
It's not right for city officials to go in a business and ask questions like what products and promotions are going to be presented only for this city official to tell his friend in the same type of business.
Integrity and high ethics standards are all you can expect from anyone,
especially from City Hall.
So far this hasn't been the case in this town.
A lot of us were hoping this would change with the last election.
Tax abatements were originally intended for companies that would provide an increase in job opportunities and sales tax revenue.
How many jobs have these two businesses actually brought into Raytown via this tax abatement? How many $$ in sales tax have been received? A coffee shop probably doesn't bring in much more than a couple hundred dollars a month and an empty building bring in nothing.
As I see it the city is basically giving away free money that it needs to keep for itself. If the tax abatement is a done deal - then I emphatically agree that a claw-back agreement needs to be attached so the city can at least get a drop back from the gallon it gave out.
Been there, done that, got the t-shirt.
According to the State of Missouri:
"Tax abatement is available to for-profit 'urban redevelopment corporations' organized pursuant to the Urban Redevelopment Corporation Law. Tax abatement under the Urban Redevelopment Corporations Law is extended to real property that has been found to be a 'blighted area' by the city."
"Blighted area": that portion of the city within which the legislative authority of such city determines that by reason of age, obsolescence, inadequate or outmoded design or physical deterioration have become economic and social liabilities, and that such conditions are conducive to ill health, transmission of disease, crime or inability to pay reasonable taxes.
Cheerleaders and football players got fat and balding and went into insurance.
Bill Gates was a nerd.
Rather than TIFing Wal-Mart, I'd suggest we control it like the Chinese. I would first "nationalize" Wal-Mart, take all its assets and force it to move to China.
Then the Wal-Mart manufacturing labor source, customer base, etc. would all be in one place.
We can revive the Montgomery Wards, Sears, JC Penneys, and even local stores like Lambert, Duffy and Malone (where I grew up) by giving them the Wal-Mart assets with the caveat that they 1)buy only from American manufactures; 2) pay a living wage and benefits; 3) and win or lose without the benefits of tax incentives.
Hey, that sounds like the American Way we all grew up with (except for the taking away of the Wal-Mart assets).
Radical? Okay.
There is one more way to accomplish the same thing but it will "cost YOU." Do what I've done for more than a decade and boycott Wal-Mart.
Sign me: Johnny Swift of "A Modest Proposal" fame
I wish everyone felt the way you do about Wal-Mart.
They are not just small town killers, they take their toll on
big stores too.
It's too bad our city fathers weren't smart enough to see that when Wal-Mart opens their doors on 350hwy. this town will fold up because of lack of income. City Hall has given them every tax advantage in the book and Raytown will not see any money from Wal-Mart sales tax for twenty years. Almost every other high tax revenue income Raytown
has (grocery stores) will close their doors and so will most other retail businesses in this town.
The only hope we have is that this developer is just as bad and devious as the last two.
He has already made promises that haven't been kept.
Remember he said he had seven retail stores lined up for the new strip mall south of 350hwy. and east of the YMCA. That was supposed to be built by now.
He also said that the ground breaking for the 350 Live would start in Fall of 2004.
Unfortunately, this is the third developer that this cities City Council has believed in.
I feel like Nostradamus, when and if Wal-Mart opens, this town will
start a downhill slide into Kansas City.
I happened to do an image search of Raytown on one of the search engines. I came across a City of Raytown cigarette tax stamp. I suggest the city tax cigarette and alcohol sales.
Andy Whiteman
Last time I looked, I was picking up my own health care bills. But if you feel you are, please post your name and address and I'll send them to you.
Notice also that I didn't say what my lifestyle is, I just commented on sin taxes. Our brilliant governor wanted to add another $1 a pack tax to cigarettes to fund education/health funding for children. That logically would pretty much result in no tax eventually -- wouldn't it?
Speaking of lifestyles, I assume you are not overweight and that you never drive carelessly. Those factors also affect universal health care costs to society.
Good to know there's some one perfect like you out there!
As for the businesses that are getting these tax gifts only one brings in any type of sales tax and from what I've seen not very much at that, there is never anyone in there when I go by that area. The Real Estate office does nothing for this town other than to help people leave here. It is true that Mr. Knabe has his fingers in everything in this town. He thinks because of who he is he should be get what ever he wants but whaty has he ever done for you and me nothing that I can think of.
He is also one of the worse landlords we could possibly have in our city and the codes dept. does nothing. Oh wait, our State Rep. Mr. Kraus is the another one that should be cited everyday for his Rental property but isn't.
I also think Greg Walters is correct about the "claw back" clause if we continue to give away these taxes Kansas City will soon be able to pick us up for nothing because Lee's Summit and Indep. won't have us. You know, Maybe KC won't want us either then what do we do?
Wakeup folks we have to clean out this board of Alderman in "2009".
I am a witness: Christine White left the podium during the 353 discussion on those properties. I was there. She did NOT vote. Theresa Melton called her name, but since she had recused herself, there was no response.
I was not suggesting a sin tax. Since I noticed that Raytown previously had this tax and sales taxes would be reduced due to Walmart, I thought it might be something to consider.
Anonymous 12:19PM, I don't understand your logic either. If you think I live tax free, why would I be complaining about school taxes? They are outrageous! Since when do people who live tax free pay taxes?
What trips to Walmart are you talking about? I mentioned here that Walmart does have a few items that aren't in other stores so I have to go there if I want them. Walmart prices aren't low enough to justify a special trip. In 2000 grocery prices at Walmart were quite a bit lower, but they have gradually crept up so that now it cost more to go to Walmart if you count your time and gas.
Check out this link for info on Walmart:
http://www.wakeupwalmart.com/
Andy Whiteman
After reading some of the comments on my posting this week I thought I should clarify some matters.
Some wrote about Alderman Christine White and her need to recuse herself because she is emplohey by Gary Knabe. Mr. Knabe's interest in Coldwell Banker, which is up for consdieration for a 15 year tax abatement -- would definitely create a conflict of interest for Alderman White.
White has recused herself from discussion and did not vote on any of the amendments to the bill creating the TIF.
The other point is that last Tuesday's meeting was the first reading of the bill. This coming Tuesday (December 18th) the bill will have its second reading and voted on at that time.
There is a public hearing regarding this matter scheduled for the December 18th meeting.
Any interested individual is allowed to speak at the public hearing. The public hearing is held during the meeting -- just prior to the final vote on the issue.
Why should an empty building get a rebate on taxes? Were there actual major renovations on this empty building? I see the brick was painted. According to the city's design standards, painting brick is prohibited. Why aren't the code nazi's breathing down their throats? Oh...I forgot...they're buds.
Maybe these businesses are "purdy" but if the city keeps paying people that don't bring in revenue, 'purdy' ain't gonna pay our bills.
The way I see it, Raytown will lose income from property taxes on three buildings, which, collectively, do not bring in enough revenue to cover the loss.
...and the city officials wonder why other cities think Raytown is backwards.
Once the city started handing out these tax gifts, some business people
saw how easy it was to get these gifts they couldn't resist asking for
the same.
Wal-Mart and HyVee and every developer that came down the pike
asked for and got these gifts. I'm sure there are probably more.
I don't blame anyone for asking for a tax break.
I DO however blame the City Council for granting such gifts without
even a thought of what it will do to this town both income and creditability
wise.
This town needs to wake up before it's too late, maybe it already is.
It doesn't take a lot of thought to know that if you give away all tax income
this town will fold.
Ethics are involved here too.
It seems this city has at least two standards. Friends of the city and everybody
else.
For instance, Remember when this city ran the truck drivers out of town?
The city said they didn't want the trucks parked on the streets or in the driveways. They also passed a rule that states you can't have storage boxes, along with no trailers on grass.
You only need to drive east bound on 350hwy. and look to the south to see
a big trailer with the words. BLOCK across the side, parked on the grass.
While a little further down is a business that brings in a lot of sales tax
dollars and this city is trying to run this man out of town for parking on
a paved lot just because somebody doesn't like his business.
Double standards abound in this town. City officials pushing one business over another. Friends getting special favors. Developers not having to go by
the same rules as the rest of us. Three big trailers parked side by side
right up from City Hall and the old church looking bad as ever and evidently
invisible to the city.
Aparently the city is also EXEMPT from city codes. IE The Olde Baptist Church. I wonder why?
As for the 353s coming up at the BOA 12/18, there was a business at this location on Raytown Rd where Knabe now is. I can understand a 353 for filling a long standing VACANT building, but why a 353 when an existing business has moved and is replaced by another? Makes no sense to me.
I hope that I am not the only one to speak at the next BOA. Is there someone there who could speak for the business people?
Andy Whiteman
I think all business property owners in Raytown, and I mean all
of us should go before the board and ask for the same
gifts as everybody else is asking for and receiving.
If they deny us we can claim favoritism or discrimination.
This might teach these people that nothing is free and giving
away a towns tax income is a disastrous way to do business.
Not only should they demand a 353, but they should demand a 10/15 term with no claw backs if that is what the present 2 requests get. I am against the NO claw backs idea feeling that all 353s should have a claw back. But if the city issues such, ALL business people are entitled to EQUAL treatment as well as equal treatment from the Code Gestapo. If the BOA laughs at Pat or anyone else, a legal action is in order but I think the city knows no one can afford to take them to court.
By the way where is LAUGHING ALL THE WAY? I assume nothing to laugh at?
Andy Whiteman
Why not, as business owners, just requesting the same..as Pat suggests..and when told "no" file a class action suit jointly against the city.
I have been before the board on other issues.
I asked them to listen to our (the downtown business owners)
when the developers were trying to steal our property.
You're right they laughed in my face. They said it wasn't their problem.
This is how sharp some of these people are about business.
One lady alderman told me that they had nothing to do with this, it was
between us and the developer.
I told her that the board approved the contract with this thief and they had just
as much to do with it as anyone.
On TV they voted five for and five against talking to us. Mayor Sue Frank
had to cast the deciding vote and she voted not to talk to us but to discuss the matter in the evenings executive meeting, that's the secret meeting after
the televised meeting. Off camera the vote was, I was told, eight against
and only two for talking to us.
Buy the way, Mr. Curt Wenson told these people how he wanted them to vote.
That came as no surprise to me.
So trust me I know how this cities government works.......or doesn't.
Most of these elected officials don't really care about the people or businesses
of Raytown, you only need to look back at some of the decisions that they have made.
I could be just a bit bitter though. After all they have treated me so well in the
past.
Those of you that want new blood serving the city - get out there and find some worthy candidates to promote and elect!
Thank you!
But aren't we beating a dead horse?
I talked to a highly placed city official a while back and asked why a human resources position is being created since the city clerk/human resources person was lauded by Bob Phillips in the Post for saving the city all this money on insurance claims.
Seems, I was told, that she's really not handling the job.
I have nothing against her personally but if that is true why would someone from the press mislead us?
When government and the media are in bed together, the people will never hear the truth.
This town is done and has been for sometime. Find the best deal for your property and hopefully find a place where honesty still exists.
From what I understand, a 'CID' is when city sales taxes are temporarily raised to pay for renovations. Can someone explain the difference (in simple terms) between a '353' and a 'TIF'? There is a lot of terminology being thrown around and mixed up in various posts.
TIF is a return of taxes collected to the business to help pay for the improvements.
353 would pay for bulldozing a building. TIF would pay for improvements to it.
Don't know if this helps. But I am trying to keep in simple per your request.
I have had to deal with her over the sewer backups and was told "Ihave to much to do I don't have time to talk to you" and she didn't. She is very lucky I didn't throw something at her before I left. She was the one I was told I had to talk to about the sewer problems the city has. Which by the way, She is still the one we will have to talk to about those things. I hope we don't have a lot of hard rains because it is not pleasant to deal with her and next time I may not be able to restrain myself.
The previous explanation has several errors regarding the difference between Tax Increment Financing and 353. A 353 is not exclusive to demolition at all. And both TIF and 353 abatements require an area to meet criteria related to blight, which many find confusing. Blight does not just mean "looks bad", it could mean that that area is in a certain barriers to development.
Property owners who pursue and qualify for this incentive still pay property taxes but just on the land and not the improvements that they made to the property. So, the taxing entity does not lose any revenue, but does not collect taxes on the improved valuation.
You can read more about the 353 Tax Abatement Program at http://ded.mo.gov/BDT/topnavpages/Research%20Toolbox/BCS%20Programs/Chapter%20353%20Tax%20Abatement.aspx
I would be careful trying to get any decent explanations from any blog.
And for sewer backups, try public works first, the city clerk is not going to clean your sewer line, public works probably will because they have the trucks and equipment to do just that.
If you were going to throw things at someone it sounds like you need some training in anger management.
Which city official(s) are receiving money under the table and how much?
Anonymous for a good reason
I don't think much about other areas in the metro unless it is important enough to make the news. Otherwise, I my have own problems.
Maybe if Raytown made the news, we would get some attention. All I ever hear about Raytown on the news is a criminal being arrested or a heinous crime being committed. There may be a little info in Wednesday's KC Red Star, but the bad crimes make TV and radio.
Andy Whiteman
It's amazing what lies, half-truths, inaccuracies and hate can be printed when people hide behind their anonymity and they know they can't be challenged on it.
What a load of stuff you spew!
You complain about others hiding behind anonymity, yet do so yourself.
By the way, some of your epistles have been less than factual -- haven't they?
Some folks do seem to jump to conclusions now and then -- that is only human.
But you, my friend, seem to be an insider that knows a lot better.
I bet if you removed your mask, you would see others remove theirs.