By Kevin Collison
LuxLiving has dropped its request for tax incentives to help build a proposed riverfront apartment project, a move that could yield about $18 million in fresh tax revenues, but set back efforts to providing affordable housing in the booming area.
Port KC President and CEO Jon Stephens said the St. Louis-based developer informed his agency it no longer will be seeking a 25-year property tax abatement for the 250-unit project planned near Berkley Riverfront Park.
“The LuxLiving team has notified us that they intend to pursue the previously approved land purchase and they do not intend to pursue exemptions or incentives from Port KC,” Stephens said in a statement.
“Therefore, the project is anticipated to be a privately funded, market rate project.”
Officials with LuxLiving could not be reached immediately for comment.
The $56 million apartment plan had been in limbo since the Port KC board failed to act on its incentive request in May. The deal had been opposed by the taxing jurisdictions, including schools and libraries, and KC Tenants, a housing activist group.
Under the terms of the 25-year abatement request, 90 percent for 10 years, 75 percent for 10 years, and 25 percent for five years, LuxLiving would have saved about $12.6 million in property taxes over that period.
The project, which is proposed for Port KC land that’s not currently paying property taxes, still would have yielded $5.5 million to taxing jurisdictions over its 25-year life.
If the project moves forward as an entirely private deal as planned, the taxing jurisdictions will now receive taxes based on its full property value, about $18.3 million over 25 years.
Those losing out however, will be renters seeking affordable housing on the riverfront.
LuxLiving officials had said the 25-year abatement was necessary to meet the city’s former affordable housing policy that required developers to set aside 20 percent of the units as affordable in order to receive incentives.
Port KC previously approved the sale of the land to LuxLiving and this week, the City Plan Commission endorsed its development plan. The plan still must be considered by the City Council.
With the decision by LuxLiving to forgo incentives, that means the loss of the 50 affordable apartments that were originally part of the plan, 25 for people earning up to 30 percent of area median income (AMI) and 10 percent for those earning 70 percent or less.
“The project is anticipated to be a privately funded, market rate project,” Stephens said. “The majority of the previous exemption request was to accommodate the significant affordable housing set aside.”
Port KC officials previously said they negotiated with Lux Living to provide a mix of units to be affordable, not just studios. For those making 30 percent AMI, monthly rent for a studio would be $455; one-bedroom, $520, and two bed-room, $585.
Now that LuxLiving is pursuing the project privately, it will be able to charge rents at whatever the market allows if the plan moves forward.
This is only the latest setback to providing affordable housing on the riverfront.
Two years ago, two affordable housing proposals for the riverfront, a 124-unit project by Flaherty & Collins, and a plan that included 40 units pursued by EPEC, were turned down for low-income housing tax credits by the Missouri Housing Development Commission.
The decision by LuxLiving to scrap the affordable housing component coupled with the earlier failure by projects to win state tax credit help means all the apartments built so far at the riverfront will have been market rate.
In addition to the 250-unit LuxLiving proposal, the other big riverfront projects completed over the past couple years are the 410-unit Union at Berkley Park and the 348-unit CORE development.
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