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  • kctifwatch
    • Jun 21, 2021
    • 5 min read

Lux Living, LLC Request for Tax Abatement for Katz Redevelopment, June 16, 2021

Updated: Dec 19, 2021

Katz Drugstore is a historic landmark on Main Street in Kansas City, Missouri

Lux Living, LLC is based in Saint Louis and comes to Kansas City with a long and troubled history of using tax incentives to turn a profit.


According to sources in Saint Louis, two of Lux Living’s apartment projects in Saint Louis were sold within a year or so after completion. The "Tribeca" & "Steelyard" luxury apartment projects. There were no claw backs & the windfall projections to Lux are believed to be well more than $10 Million.


Following Lux Living's confirmation that it intended to sell a project under development, in 2020, the City of Saint Louis LCRA instituted a policy that caps the assessed value of a project that is eligible for abatement following a resale within the abatement area. The Saint Louis Development Corporation (SLDC) has developed a financial impact analysis that it employs to evaluate requests for incentives. Lux Living's business model has made it challenging for SLDC to apply the financial formula.


Even more disturbing, and another reason we need to dig deeper into these development deals, is that the owners of Lux Living, LLC (Charter No. LC001642667, formed 4/11/19) have a history of dishonesty and should not be trusted to do what they are saying they will do.

Several folks from Saint Louis are warning us not to do business with Lux Living.


A quick search for Missouri business records revealed that Lux Living has a direct connection with the company known as Asprient Properties, LLC (Charter No. LC0081130) who were in the news because they are terrible landlords.



Furthermore, one of the people involved was fired as CEO of Ixia because he falsified his credentials, the very same person who appeared before Kansas City Missouri's Neighborhood Planning and Development Committee asking for more incentives.


Below is the full recording of that meeting, including the request and testimony from the public:


This NPD meeting was rather unorthodox due to the fact that Katheryn Shields, Councilmember for 4th District At-Large, was there to champion the project even though she wasn't on the committee, and was allowed to sit next to Councilman Barnes (the chair of the committee) and interrupt them whenever she felt the urge to speak up.



She also had lots of nice things to say about the developer including the fact that in all the years she has been doing this work (and that is not an insignificant amount of years), she has never had a developer be so accommodating to her requests.


We wonder if it has ever occurred to her that this is exactly what a con would look like? Either way, this information has been sent to all of the council members and the mayor so it's up to them to do the due diligence.


Councilmember for 6th District At-Large Andrea Bough was willing to wade in to the legal work of at least attempting to hold the developer accountable.


She made the logical statement that "saving" the Katz building was tangential to the amount of incentives that were being requested for the development and wanted to make sure that the city and our taxing jurisdictions weren't being taken advantage of with a speculative development.


Councilmember Shields (who has been an avid supporter for several incentive giveaways over the years) took offense to the idea that "historic preservation was tangential" which really demonstrates that for her, it is more about brick and mortar than about the potential deception or "prospective" nature of how it will be preserved or the damage it will eventually cause the city's residents.


During this exchange between Councilmembers Bough and Shields it is revealed that the developer is only requesting incentives because he intends to "save" the Katz building and that if we didn't give the developer what he wanted, then most likely another developer would come in and do what they wanted with the building without incentives.



We think this would be just fine and we wonder if Councilmember Shields knows that she sounds a lot like she is placing more value on a building than she is on the lives of the people that the building will eventually displace.


We heard some really great testimony from Kathleen Pointer with Kansas City Public Schools who testified that KCPS ranks #17 in the country for the amount of dollars they lose to economic development incentives, and 90% of abatements are given away WEST of Troost.



Janice Bolin with the Kansas City Public Library also testified in opposition of the request for incentives. The Kansas City Public Library is another public service that loses a considerable amount of their yearly budget to unnecessary tax abatements. The problem was so bad that they were forced to ask the city's voters to approve an increase in the amount of taxes that residents pay so that they could keep up with the ongoing demands of new technology.


We agree that if the developers weren't trying to add all of the listed amenities: a bistro café, co-working facilities, a rooftop pool, a sky lounge, a court yard, a fitness center, a basketball court, a bowling ally, a virtual golf lounge and an audio studio; they could revitalize the building for a lot less money and even house more people for lower rents.


We heard from a new voice in the fight against incentives which was Austin Strassle who is on the Kansas City Health Commission board.


The Health Commission advises the Mayor and City Council on matters related to the KC Community Health Improvement Plan (KC-CHIP), public health, public health policies with a focus on prevention.


KC Tenants showed up along with other residents to make the important argument for Affordable Housing. We were especially touched by Vance Wilson's testimony who explained that her Mom was evicted from her home during a pandemic because a developer bought the building and raised the rents.


With home prices soaring out of control in a frenzied housing market, there is a shrinking pool of affordable housing, leaving residents to fend for themselves and live on the streets while trying to maintain a job and keep looking for housing.


After several rounds with Councilmember Bough the committee made changes to the Ordinance and voted it out of committee. It went on to be heard by the full council on June 24, 2021. Below is the full discussion from that meeting:


On July 14th, 2021, the Neighborhood Planning & Development committee was expected to take up a NEW request for incentives for Lux Living. Wash-Rinse-Repeat. Stay tuned for updates.


Katz project in the News:


Kansas City Star:







KSHB:




Flatland KC:



KCUR:



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