‘This Is What Airports Do,’ Part 2

The chart below documents the estimated amount of tax dollars lost because of Kansas City International Airport (MCI) acting like a private property developer.

We know that government departments such as the airport do not pay taxes. This is also true for tenants on airport land. According to Karbank Real Estate Co.,  which competes against the taxpayer-subsidized airport, the assessed value of the Blount International facility on airport land is slightly more than $7 million, or one-third the appraised value. As a result, the affected tax districts have lost almost $650,000 in annual tax revenue. The Park Hill School District alone is denied $380,000; Kansas City proper loses slightly more than $107,000; Mid-Continent library loses $22,000.

Of course reading this, you might think that officials in Platte County — the county in which the airport is located — are up in arms about this deal because they are losing thousands of tax dollars to an airport that undercuts private taxpaying developers. But you’d be wrong. The Platte County Economic Development Council not only supports the airport in the past deal, but also in the current plan for a new terminal. Heck, Alicia Stephens, executive director of the Platte County EDC, supports the new terminal project and the mayor appointed her to the Airport Task Force!

But don’t worry about Stephens losing her job for supporting deals that cost Platte County dearly. Her boss, the chairman of the Platte County EDC, is none other than Mark Van Loh — the head of the Kansas City Aviation Department, whose developments are robbing Platte County of tax dollars.

Reasonable people are left with two compelling questions: How can Stephens credibly serve on a task force in which she will be asked to pass judgment on a proposal by her boss? And why does Platte County tolerate its EDC chairman having such a clear and significant conflict of interest?

Here is a table Karbank compiled that provides a breakdown of tax revenue NOT being paid on property that the airport developed:

Not satisfied with giving away the house on rent and taxes, the Aviation Department signed a lease agreement that stipulated, (emphasis added):

In the event that ad valorem real property taxes are assessed against the Premises, the bonus value of this Lease, the Infrastructure Improvements or any component of the Premises or the leasehold estate created by this Lease (“Taxes”) and paid by Lessee, City shall either pay Lessee an amount equal to such Taxes or credit such amount against Rent owed to City by Lessee.

In other words, Kansas City is on the hook for any taxes owed on the property should the abatement end. And it might. Karbank is suing the airport over the matter, alleging that the agreement, which they claim is effectively 100 percent abatement  in perpetuity, is unconstitutional. Whatever the results of the lawsuit, MCI needs to act like an airport, not Donald Trump.