NOTICE TO DEVELOPERS REGARDING STREETCAR TDD SPECIAL ASSESSMENTS AND SALES TAX
Developers seeking incentives that would affect real property taxes should note the following if the project is located in the green or yellow areas on the attached map. A high-resolution version of the map can be viewed online here.
- The real property in the project will be subject to annual special assessments imposed by The Kansas City Main Street Rail Transportation Development District in connection with the Streetcar (the “TDD”). In addition, the TDD levies a one percent (1%) dedicated sales tax within its entire boundary.
- Neither tax increment financing nor property tax abatement will have any effect on the applicability of the full amount of the annual special assessments levied by the TDD.
- In any real property sale-leaseback transaction in which the real property will be owned by the City or any City agency (such as LCRA or PIEA), the lease will provide for the Developer to pay (in addition to any required payments in lieu of taxes) the full amount of the annual special assessments imposed by the TDD, determined as if the real property was owned by the Developer.
- The special assessments are based on the property’s full market value as determined by the County for each assessment year (Jan. 1 to Dec. 31), and therefore may change from year to year, especially in an assessment year following completion of a redevelopment project. For further information regarding the TDD, including its Special Assessments, click here or enter www.kcstreetcar.org/tdd in your browser.
- The current (and maximum) rate of the TDD special assessment works out to be (a) $1,536 for each One Million Dollars of commercial market value (commercial market value multiplied by 0.001536), and (b) $1,330 for each One Million Dollars of residential market value (residential market value multiplied by 0.001330). Property that is exempt from property tax because it is owned by a non-profit entity and used for a tax-exempt purpose is still subject to the TDD special assessment, although at a lower rate. Mixed use projects would apply the commercial and residential rates to the commercial and residential market values, respectively.
- Special assessments in the green area are currently payable annually, and will cease in 2037; special assessments in the yellow area have not yet commenced, but will commence in 2021 and cease after 25 years of payments.
- Special assessments may appear on a County-issued Joint Statement or may be billed separately, but in either case the special assessment will be due at the end of the calendar year similar to real estate taxes.