TIF for new Aldi location at 39th and Prospect

Today, Kansas City, Mo announced that it was going to TIF $5 million worth of spending on a new 16,500 square foot building that will house an Aldi store at 39th and Prospect.

Let me start with the good news.

1) I'm completely supportive of TIF money being used in the Urban core of Kansas City to help bring jobs, development, and resources to our badly-in-need urban core.

2) The new Aldi store will bring an estimated 13 jobs to this area of town.

3) Aldi is a great (and growing) brand, that serves low-cost goods. These types of low-cost food are in desperate need in this neighborhood that is in the middle of one of Kansas City's many Food Deserts.

So on many fronts, I applaud the city for funding this much-needed development in one of the city's high-need areas.

On the flip side, the building pictured above is an old Grocery Store that is in a strip mall at Linwood and Prospect -- a mere 7 blocks away. Could we not, less expensively, get a new grocery store to move into an old grocery store space just a couple of blocks away?  This would have helped end the blight of an abandoned building, helped the store get open sooner, and been less expensive for the city to help fund since it was an existing buidling.  Seems like it could have been an easier solution that could have left more available TIF funds for other projects instead of just throwing money at the situation for money's sake.  Not that this is a bad idea, just that it seems like there is a better, cheaper option.

Comments

[InsideBub]

Your final paragraph reveals to me that you do not understand TIF or the situation at Linwood & Prospect. First, the grocery space at Linwood & Prospect was vacant 5 years ago when Aldi decided to build a new store at 39th & Prospect. While it is only 7 blocks away, for many retailers it might as well be on the other side of the moon. A target demographic can change completely in 1 - 2 blocks. Traffic patterns and volumes are also very different between 39th & Prospect and Linwood & Prospect. Aside from these differences, you are also assuming that the vacant store at Linwood & Prospect is suitable for reuse as a grocery. I believe that store had an issue with the sewer line, which often resulted in an unpleasant smell throughout the store. Addressing a sewer issue below the store is an expensive task. The parking lot is also in poor condition and will require extensive work. There is also the problem that the whole complex is a suburban shopping center model plopped down into an urban setting. It never worked well and is not likely to work well in the future. Redevelopment is its best bet. You also talked about using TIF funds elsewehere. TIF captures the increased property taxes and half of the increased sales, earnings and utility taxes generated by a project to reimburse a developer for their eligible expenses. Thus, projects create their own subsidy through TIF. Creating a TIF does not create a briefcase full of cash; it creates the opportunity to recover some expenses through the increased taxes. Even if the TIF Commission or the City issues a bond in order to provide upfront financing, it is the project itself that repays that bond with its increased taxes (except, of course, when the City guarantees a bond and has to cover any shortfall in the debt service). BTW, welcome back. We've been waiting for you.

[Brent]

Interesting on the sewer line -- wasn't aware of that. It just seems as if this is a never ending process that the city TIF's projects, and then, by the time they would start generating revenue for the city (vs just paying for themselves) they end up empty and we then TIF someplace else down the road. It seems like a big part of the reason the city is alway broke becuase they never get increased tax revenue that isn't already assigned to the project that generated it. While I agree that the Linwood/Prospect building is a horrible urban design (why do you need so much parking in a neighborhood where almost no one owns a car?) but sure seems that filling it makes more sense than letting it get abandoned and rot and build new elsewhere. Overall, it's still good for the area, but just doesn't seem like the best option to me...