COMMITTEE SUBSTITUTE FOR ORDINANCE NO. 220388
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Accepting the recommendation of the Central City Economic Development Tax Board for additional funding in the amount of $140,000.00, for a total not to exceed $422,354.00, for an economic development project proposed by CELT Real Estate Holdings, LLC to rehabilitate an existing structure for the Thirty-Eighth Street Studio & Business Incubator and five residential housing units within the boundaries of the Oak Park Neighborhood located at 3841 Agnes; authorizing the City Manager to enter into a Funding Agreement for that purpose.
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WHEREAS, Section 67.1305 of the Revised Statutes of Missouri authorizes the City to impose a retail sales tax not to exceed one-half of one percent if the imposition of such a retail sales tax is submitted to, and then approved by, a majority of the votes cast; and
WHEREAS, on April 4, 2017, pursuant to authority granted by Section 67.1305, RSMo, a majority of Kansas City, Missouri voters approved a new 1/8 of one percent retail sales tax for funding economic development projects within the area bounded by 9th Street on the north, Gregory Boulevard on the south, Paseo Boulevard on the west and Indiana Avenue on the east; and
WHEREAS, as part of the third round of funding, CELT Real Estate Holdings, LLC (“Developer”) submitted a proposal seeking $ 282,354.00 of Central City Economic Development (“CCED”) sales tax funds for a proposed project to construct commercial office space, business incubator and 5 residential housing units, to be located in the 3800 block of Agnes (the “Project Site”), all in Kansas City, Jackson County, Missouri; and
WHEREAS, the Council authorized a funding agreement with the developer for the above Project in the amount of $422,354.00 with its passage of Ordinance No. 200994 on December 17, 2020; and
WHEREAS, Developer subsequently identified a need for additional funding due to increases in construction labor cost and construction materials; and
WHEREAS, at its November 9, 2021 meeting, the Central City Economic Development Sales Tax Board voted to approve a recommendation to the City Council; and
WHEREAS, the Project serves a predominantly public municipal purpose because, without limitation, completion of the Project (i) enhances the tax base of the Project Site; (ii) retains and/or generates jobs; (iii) promotes economic development in the area of the City in which the Project Site is located, and promotes consideration of areas of the City that the City Council has determined to be blighted as a location for business operations; (iv) results in generation of tax revenues to the City from the conduct of business and other activities in the City that would not otherwise occur; (v) serves as a catalyst for additional investment in and further redevelopment and rehabilitation of the area of the City in which the Project Site is located; and (vi) furthers the City's policy of encouraging economic stability and growth; and
WHEREAS, the City desires to encourage the Developer to carry out the Project for the purpose of realizing these predominantly public purposes by entering into an agreement to contribute certain revenues in an amount needed to cause the project to be undertaken and attract the necessary private investment; and
WHEREAS, the contributions contemplated by the funding agreement are limited to those which have been determined to be needed for the purpose of ensuring that the Project proceeds, and, but for their contribution, the Project would not proceed, to the detriment of the public interest; NOW, THEREFORE,
BE IT ORDAINED BY THE COUNCIL OF KANSAS CITY:
Section 1. That the CCED Board’s recommendation that CCED sales tax revenues in an additional amount not to exceed $422,354.00 be utilized for the costs associated with the rehabilitation of an existing structure for the Thirty-Eighth Street Studio & Business Incubator and five residential housing units for its above-referenced Project is hereby accepted.
Section 2. That the City Manager is hereby authorized to enter into an agreement with CELT Real Estate Holdings, LLC for the costs associated with its above-referenced Project in an amount not to exceed $422,354.00, from funds previously appropriated to Account No. 23-2200-555998-B-57CELT, the Central City Economic Development Sales Tax Fund.
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I hereby certify that there is a balance, otherwise unencumbered, to the credit of the appropriation to which the foregoing expenditure is to be charged, and a cash balance, otherwise unencumbered, in the treasury, to the credit of the fund from which payment is to be made, each sufficient to meet the obligation hereby incurred.
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Tammy L. Queen
Director of Finance
Approved as to form and legality:
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Joseph A Guarino
Assistant City Attorney