The Crossroads Arts PIEA is a tax abatement program in the Crossroads Arts District specifically designed for properties with arts and cultural uses, including:
- spaces used by independent artists, writers and performers;
- art dealers and art galleries;
- performing arts organizations; and promoters;
- fine arts schools;
- motion picture and video industries;
- sound recording industries;
- museum, historical sites, and similar institutions; and
- other arts uses as approved by the Crossroads Arts Advisory Committee.
In 2006 as the Crossroads began to flourish and prices increase, the CCA recognized the need to save their creative artistic neighborhood. Meetings were scheduled with the Mayor, City Council and the EDC to establish the PIEA which ensures the continued affordability of the community for artist for years to come. The General Development Plan for the Crossroads Arts PIEA was approved by City Council of Kansas City, Missouri on March 29, 2007, via City Ordinance NO. 070192. The General Development Plan (GDP) was revised by the PIEA Board on April 21, 2009 to reflect a change in staffing for the Arts PIEA from the EDC to the PIEA. Arts uses for properties must occupy at least 51% of the square footage of the property in order to be eligible for the program.
Out of a total of 668 property parcels in the Crossroads in 2007, there are 36 properties (5.4% of the total) participating in the program as of January 2015.
Level of Abatement
The GDP as adopted in 2007 established that abatement “for projects within the redevelopment area will not exceed 10 years at 100% abatement of the improvements, unless the Council, by resolution, makes a determination that additional tax abatement allowed under state law should be granted.” (p. 34, GDP)
Intent and Use
The expressed intent of the Arts PIEA is “to retain and expand the arts and cultural uses within the Crossroads area by stabilizing assessed values in order to promote long-term affordability (which will preclude its use for any other purpose) and which will prevent the reoccurrence of blight.” Furthermore, “the presence of arts and cultural uses has been proven to stimulate commercial investment in the area and adjacent areas, as well as nearby properties, thereby encouraging the removal of blighting conditions and expanding the tax base. The presence of arts and cultural uses has helped make the Crossroads area attractive for other uses, but are now being priced out of the neighborhood. The potential loss of arts and cultural uses in the Crossroads would diminish the appeal of this neighborhood and potentially cause blight which has previously been cured to reoccur.” (pp.5 – 6, GDP)
The “Proposed Land Use” of the GDP indicates that the Plan “contemplates the retention, expansion, and attraction of ‘arts and cultural’ uses and the rehabilitation of existing industrial and vacant properties to modern, user- and neighbor-friendly arts and cultural facilities.
Participation & Monitoring
Participation in the program requires an initial investment in improvement to the property to mediate blight conditions and the payment of legal fees for filing and required documentation. Each year the property owner must file a report certifying continued compliance with the conditions of the program, which are reviewed by staff. Any concerns about compliance of arts uses are brought to the attention of the Crossroads Arts Advisory Committee, which meets as needed to review these reports as well as requests from new projects applying for Arts PIEA eligibility. The Committee’s recommendations are referred to the PIEA Board for their final approval and action. If property owners leased to tenants, rental rates must be affordable, as defined by “the lease rate per square foot is less than the average lease rate per square foot for comparable properties in the Crossroads.” (p. 32, GDP)
Impact
Blight in the Crossroads has diminished since the Plan was approved in 2007, but is still present in many parts of the neighborhood, especially towards the east. The Crossroads Arts PIEA not only helped to keep a significant number of properties devoted to arts and cultural uses, it also stimulated new investments in arts uses, such as properties being rehabilitated and devoted to artist studios.
As a result of the severe economic downturn in 2008, property values in the Crossroads did not continued to increase after 2007, and in some cases even declined. Some of the property owners who were accepted for the Arts PIEA in 2007 have not seen a significant return on their investment, and may even be paying slightly more in PILOTS (payments in lieu of taxes) than they would have paid otherwise in taxes. But with the economy recovering and major new investments in public transportation infrastructure underway (the streetcar), property taxes can be expected to resume a sharp upwards trajectory soon.
Review & Renewal
In 2017, The Crossroads Arts PIEA Area Plan was extended for current participants and is also available for new participants. By Resolution, this act was approved by the City Council. The goal is to retain and expand the arts and cultural uses within the Crossroads area by stabilizing assessed values in order to promote long-term affordability (which will preclude its use for any other purpose) and which will prevent the reoccurrence of blight. The General Development Plan for the area requires that in order to be eligible, more than 50% of the property has to be used for art-related uses consistent with NAICS codes established in the Plan. It also provides the projects be monitored on an annual basis to determine if the owners are complying with the eligibility requirement and also to determine rent affordability for the eligible artists.
Former program participants were granted a 15-year extension where their assessments were abated at 50% of the assessed values as established by the Jackson County Assessor’s Office. Newly approved participants are eligible for 10 years of 100% abatement of incremental increases in value. There is not an additional 15 years of 50% abatement for new projects approved after January 1, 2017.
Contact the Economic Development Council for more information.
