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The downtown starter line between River Market and Union Station, as well as the extension now underway to run from Union Station down Main Street through Union Hill, Midtown and the Plaza to UMKC (51st & Brookside Blvd.), both received significant Federal grants toward their development and construction (approx. $37 Million in 2013/2014 for the starter line and approx. $174 Million in 2021 for the extension to UMKC).
The remainder of the costs of development and construction of each phase, as well as annual operations and maintenance, have been or will be paid for with revenue generated by separate Transportation Development Districts (or “TDDs”). One TDD was formed for the downtown starter line in 2013 (the “Starter Line TDD”) and one TDD was formed for the combined starter line and extension (the “Extended Line TDD”) in 2017. Funding also includes an annual contribution of $2.039 Million from the City’s public mass transit sales tax (which is not increasing even with the construction of the extension). A second extension from River Market to Berkley Riverfront Park that is being pursued by Port KC has separate funding. The purpose of this page is to provide information and resources regarding the two TDDs.
For a special Notice from the City to Developers seeking incentives for projects within these TDDs, click here
The TDDs are separate from the City and from the Kansas City Streetcar Authority. For more information about the Kansas City Streetcar Authority, click here.
WHAT ARE TDDs
TDDs are formed and exist under the Transportation Development District Act, which is found at 238.200 – 238.280, RSMo. They are formed through an election by voters within their boundary after a Circuit Court has approved the details of the proposed TDD and authorized the formation election. A TDD is a distinct political subdivision of the State of Missouri with the power to impose certain taxes, special assessments and fees as were initially proposed in its formation petition to the Circuit Court if approved by the voters within the boundary in a second separate election after the formation election. A TDD is governed by its own Board of Directors. As a political subdivision, a TDD is required to have open meetings of its governing body and maintain open records just like a city.
Due to the different methods employed to seek formation of the two TDDs, their respective Boards of Directors are selected differently. The Starter Line TDD was proposed in a Petition filed in the Circuit Court by Kansas City, Missouri and the Port Authority of Kansas City, Missouri (or “Port KC”); its Board of Directors consists of whoever is serving as Mayor of Kansas City and whoever is serving as the Chair of the Board of Commissioners of Port KC, and two more people, one selected by the Kansas City Council and one selected by the Port KC Board of Commissioners. The Extended Line TDD was proposed in a Petition filed in the Circuit Court by more than 50 registered voters of Jackson County; its Board of Directors consists of seven (7) individuals who are residents within the boundary and are elected at large by voters within the boundary.
The Directors of the Starter Line TDD are Mayor Lucas (Chair), Phil Glynn (as current Chair of Port KC Board), Matt Staub (City Designee) and Lynn Carlton (Port KC Designee).
The Directors of the Extended Line TDD are Jan Marcason (Chair), Ruben Alonzo, Crissy Dastrup, David Johnson, Albert Ray and Zac Sweets. There is presently one vacancy that is to be filed by the Board for the unexpired term of the vacant seat.
A TDD is primarily a financing entity that levies revenue sources. It then monitors the collection and distribution of the revenue to the City under an agreement that assures that it is used for project purposes. The TDD does not govern or participate in the operation of the streetcar. Decisions regarding operation of the streetcar are made by the Kansas City Streetcar Authority in consultation with the City.
BOUNDARIES OF THE TWO TDDs
The Extended Line TDD is larger than the Starter Line TDD, and it includes all of the area of the Starter Line TDD. The Starter Line TDD runs (very generally speaking) from River Market between Broadway Bridge and Heart of America Bridge, south into the entire Downtown Loop, and then between Broadway and Locust south from the Loop to 27th Street.
The Extended Line TDD runs (very generally speaking) from the Missouri River on the north, south between State Line on the west and Campbell Street on the east to a southern boundary that meanders west to east from 46th Street at State Line to 53rd/54th Streets at the southeast side.
The Extension Line TDD will effectively replace the Starter Line TDD and the two TDDs cannot collect their revenue for the same periods. After a winding down period, the Starter Line TDD will be abolished under a procedure in the TDD Act.
Click here to see a map showing the boundary of the Extended Line TDD, which also shows the smaller boundary of the Starter Line TDD in green. Owners of real property within the green or yellow areas should be sure to review the section called TDD SPECIAL ASSESSMENTS.
TDD REVENUE GENERALLY
Each TDD has the power to impose a sales tax of no more than 1% and certain special assessments against real property, which will be discussed in more detail below. With the signing of the $174 Million Full Funding Grant Agreement in January 2021, actions are underway for the Starter Line TDD to end its 1% sales tax on June 30, 2021, and for the Extended Line TDD to begin collection of its 30-year 1% sales tax on July 1, 2021. Similarly, if the transition is completed as expected, the Starter Line TDD’s special assessments would cease with the 2020 assessments, and the Extended Line TDD would levy its special assessments starting with 2021.
TDD SPECIAL ASSESSMENTS
The Starter Line TDD has been levying special assessments throughout its entire boundary (the green area on the map) since 2013, and like the sales tax, the intention is for the Extended Line TDD to begin levying the special assessments starting in 2021, and the Starter Line TDD would no longer levy those assessments after 2020. The amount of the special assessment is explained below in the section TDD SPECIAL ASSESSMENT CALCULATION and there is a link to an assessment calculator in that section.
The special assessments of the Extended Line TDD will be levied on real property located within the green or yellow areas on the map. The special assessments will last for 25 years. In the yellow area, the 25 years will begin with 2021 assuming the transition occurs as currently expected; for the green area, the 25 year period began with 2013 and will end in 2037 (25 years after 2013). The special assessment formulas and rates are the same in the two TDDs, but like the sales tax, will not overlap in time.
There are two separate special assessments, a primary special assessment based on the appraised market value of the real property according to Jackson County, Missouri, and a supplemental special assessment against commercial surface pay parking lots. The special assessments apply only to real property within a certain proximity to the actual rail line (the green area and the yellow area on the map). These special assessments are billed annually, and are included on the County Consolidated Tax and Assessment Bill which is due at the end of each year.
Unlike property taxes, special assessments are not reduced or abated by property tax abatement. In addition, properties that are constitutionally exempt from property taxes because they are used for educational, religious or charitable purposes are not exempt from special assessments.
TDD SPECIAL ASSESSMENT CALCULATION
The formula for the primary special assessment varies for commercial, residential and nonprofit-owned properties. Click here for a more detailed explanation of the structure and formula of this special assessment. Click here for an assessment calculator with embedded formulas into which you can enter your property’s County-determined market value. You can look up your property’s market value at the County’s website by clicking here.
As examples, a commercial property with a market value according to the County of $1 Million would have an assessment of $1,536 for the year (effective rate 0.1536%); a residential property (including single family homes, condo units and apartment buildings) with a market value of $250,000 would have an assessment of $332.50 for the year (effective rate 0.133%); non-profit properties are only assessed by the TDD over a floor value of $300,000 per parcel and pay a lesser rate.
Property used as a commercial surface pay parking lot is assessed a supplemental special assessment of $54.75/year for each pay surface parking space that is subject to the supplemental assessment. This supplemental assessment applies only to actual surface pay lot businesses (not to any type of garage parking and not to surface employee parking lots neighboring a business and owned by the business or an affiliate of the business, for example). Almost all of the commercial pay parking spaces are in or around downtown. Since 2013, several surface pay parking lots have seen new development, and revenue from this supplemental assessment has declined. This was consistent with the original financial projections that anticipated this component would decline.
TDD SALES TAX
A TDD’s sales tax extends throughout the entire boundary of that TDD. It is collected at the point of sale and remitted to the Department of Revenue like all other sales taxes. It applies to all taxable retail sales made within, and only within, the boundary of the TDD, except it does not apply to the sale or use of motor vehicles, trailers, boats or outboard motors nor to all sales of electricity or electrical current, water and gas, natural or artificial, nor to sales of service to telephone subscribers, either local or long distance. The sales tax rate in either TDD is 1%.
The Starter Line TDD began collecting its 1% sales tax within its boundary (the green area on the map) in 2013. Assuming collection of that sales tax ends as now anticipated on June 30, 2021, then on July 1, 2021 the Extended Line TDD’s 1% sales tax will begin to be collected throughout the entire boundary of the Extended Line TDD (the white, green and yellow areas on the map) and last for thirty (30) years. As previously noted, the two sales taxes will not be collected at the same time.
For Further Information, Contact MainStreetRailTDD@gmail.com
COMMERCIAL – $0.48 PER $100 OF TDD COMMERCIAL ASSESSABLE VALUE
County Market Value x 0.32 = TDD Commercial Assessable Value
(TDD Commercial Assessable Value / 100) x $0.48 = TDD Commercial Special Assessment
Example: If County Market Value of commercial property is $1,000,000:
$1,000,000 x .0032 = $3,200; $3,200 x $0.48 = $1,536
RESIDENTIAL – $0.70 PER $100 OF TDD RESIDENTIAL ASSESSABLE VALUE
County Market Value x 0.19 = TDD Residential Assessable Value
(TDD Residential Assessable Value / 100 x $0.70) = TDD Residential Special Assessment
Example: If County Market Value of residential property is $200,000:
$200,000 x .0019 = $380; $380 x $0.70 = $266
NONPROFIT PROPERTY – $0.40 PER $100 OF TDD NONPROFIT VALUE
Same as Commercial or Residential Property, EXCEPT (1) at the start of the formula, subtract $300,000 from the County Market Value (i.e., the first $300,000 of market value does not get charged), and (2) the ratio (32% v 19%) depends on whether the property is classified by the County as commercial or residential. There is a $300,000 floor and a cap explained in footnote 4. That floor and cap is per each tax parcel
(County Market Value – $300,000) x 0.32 or 0.19 = TDD Nonprofit Assessable Value
(TDD Nonprofit Assessable Value / 100) x $0.40 = TDD Nonprofit Special Assessment
Example: If County Market Value of exempt commercial property is $500,000:
($500,000 – $300,000) x .0032 = $640; $640 x $0.40 = $256
Example: If County Market Value of exempt residential property is $500,000:
($500,000 – $300,000) x .0019 = $380; $380 x $0.40 = $152
CITY OWNED PROPERTY
City contributes $2.039 Million annually by contract. However, property owned by City or a City Agency as part of an incentive plan but really used for private purposes will be required to agree to pay the TDD special assessment as part of the terms of the incentive, and those special assessments do not apply against the City’s $2.039 Million annual contribution.