Council Abruptly Revises $140M Waddell & Reed Deal, Delays Vote

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The new Waddell & Reed tower is going up on the site of the former IBM Building, which is currently being demolished.

By Kevin Collison

The Kansas City Council abruptly changed the terms of the $140 million Waddell & Reed headquarters development deal Thursday, injecting last-minute uncertainty to a project that’s expected to bring 1,000 well-paid jobs to downtown.

In a substitute amendment introduced during the Council meeting, a 15-year, 75 percent property tax abatement that was part of the original incentive package had its final five years cut in half to 37.5 percent.

The Council voted, with little discussion, to approve the property tax abatement change and also to delay a final vote on the project for one week.

It is uncertain how the last-minute change will affect the proposal to build an 18-story headquarters for Waddell & Reed at 14th and Baltimore. The move cuts several million dollars from what was a $44 million local incentive package.

David Frantze, the attorney representing the developers of the proposed project, Burns & McDonnell and Financial Holding Corp., could not be reached immediately for comment.

After the meeting, Waddell & Reed reissued a statement it made last week after the Council Neighborhood Planning and Development Committee endorsed the original incentive agreement.

“We remain excited about the possibility of bringing our workforce of approximately 1,000 employees to a distinctive new building inside an enhanced enterprise zone in downtown Kansas City,” spokesman Roger Hoadley said in a statement.

During the brief discussion before the revised amendment was approved, Mayor Quinton Lucas said a request by Mark Bedell, the superintendent of the Kansas City Public School District, prompted the property tax abatement cut.

In a letter sent to the mayor and Council on Tuesday, Bedell said the school district had not received justification from the developer for its incentive request and expressed doubt the amount would change.

He asked the city to reduce the property tax abatement being offered to 10 years at 75 percent, a reduction that would increase the district’s future tax revenues from the deal from $18.4 million to $28.4 million.

As an alternative, Bedell said the city could provide its 50 percent share of the economic activity taxes (EATS) the project is expected to generate to the other taxing jurisdictions, including the school district. That would yield $9.93 million in future tax revenue.

EATS taxes include earnings taxes, sales taxes and utility taxes.

In the end, the Council decided to offer the school district half the property tax abatement reduction it requested.

Lucas said the additional week will allow further conversations with Bedell regarding the revised incentive package.

The state also is providing a $62 million job incentive package to Waddell & Reed, which is currently located in Overland Park.

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