FAQs about the 2014 effort to expand the KC Streetcar
In 2014, the City proposed a streetcar expansion that would have built three additional streetcar lines. Residents voted against that expansion effort in August, 2014. The City of Kansas City then continued with construction of the downtown streetcar line, which launched in May 2016.
The 2016 proposal to expand the streetcar south on Main to 51st & Brookside Boulevard is a community-based project organized by the KC Regional Transit Alliance, not the city government. For information about that proposal, please contact the Kansas City Regional Transit Alliance at firstname.lastname@example.org or 816-336-9424.
The information below will remain on our website for transparency and as a historical reference.
Q: Would the proposed expansion of the streetcar line also be financed with a Transportation Development District (TDD)?
A: Yes, in part. Phase 2 of the streetcar line (also known as NextRail KC) plans to be paid for with a combination of revenue from a new TDD (to pay for annual operating costs and approximately 40-50 percent of construction costs) and from federal and state funds and other non-TDD sources, including potential public-private partnerships.
Q: What are the boundaries of the Expansion TDD?
A: The Expansion TDD would run from State Line Road on the west to I-435 on the east, with the Missouri River as the northern boundary. From State Line Road & 46th street, the southern boundary zig-zags east to 53rd & The Paseo, following precinct lines. It then goes south primarily on Paseo, then east on Gregory Boulevard to I-435.
Q: What are the revenue sources proposed for the Expansion TDD?
A: The revenue sources for the Expansion TDD would be the similar to the Phase 1 TDD, a combination of a 1 percent sales tax within the entire boundary of the Expansion TDD and a special assessment on some, but not all, property.
Q: What happens to the Downtown Streetcar TDD?
A: If a new, larger TDD is created to finance the expanded streetcar system (the “Expansion TDD”), the existing Kansas City Downtown Streetcar TDD (the “Phase 1 TDD”) will be replaced by the Expansion TDD once Phase 2 is ready to proceed. The Expansion TDD will seek voter approval for the same sales tax and maximum special assessment rates as are currently being imposed by the Phase 1 TDD. Although voters may be asked to approve these revenue sources in November 2014, the Expansion TDD’s sales tax and special assessments would not begin until it is determined that Phase 2 has sufficient non-TDD funding to be viable. At that point, the revenue sources in the Phase 1 TDD would be replaced with the revenue sources from the Expansion TDD. Property owners in the Phase 1 TDD will not notice any difference. Their sales tax and special assessment will remain the same.
Q: How would the special assessment work in the Expansion TDD?
A: The special assessment would be applied at the same maximum rates as the Phase 1 TDD. However, not every property in the Expansion TDD would pay a special assessment. In the Expansion TDD, it’s anticipated that only properties within a reasonable distance (up to approximately one-third mile on either side of the streetcar line, with some exceptions) will pay the special assessment. Downtown properties that already pay special assessments under the Phase 1 TDD will continue to pay those assessments under the new Expansion TDD.
Q: How much would a special assessment cost?
A: The special assessment rates for the Expansion TDD would be no more than the maximum approved rate for the Phase 1 TDD. Using those maximum permitted rates, below are examples of the annual special assessment for property that is subject to the assessment (the actual formula is outlined in the final answer of this FAQ sheet):
• For residential property: The special assessment would be $66.50/year for every $50,000 of property market value (as determined by Jackson County);
• For commercial property: The special assessment would be $1,536/year for every $1,000,000 of property market value (as determined by Jackson County).
Special assessments would also be imposed on property owned by the City, property owned by non-profit entities (property valued under $300,000 would be exempt), and surface pay parking lots.
Q: Will special assessments be paid by properties that have tax abatements?
A: Yes. Special assessments are different than property taxes and tax abatement does not abate special assessments.
Q: How long will the assessments and taxes be in effect?
A: The sales tax has a 30-year sunset.
The special assessment on property has a 25-year sunset.
None of the TDD tax rates or assessments will go into effect unless the City secures enough federal and/or state matching funds to make the project work.
Q: What is the process for forming an Expansion TDD?
A: A petition has been filed with the Jackson County Circuit Court. The petition will describe the proposed project to be undertaken, boundaries of the Expansion TDD, revenue sources and the maximum rates for each type of revenue. If the court rules the petition to be proper, it will order an election.
Creating and funding the Expansion TDD requires two public votes. The first vote, expected in August 2014, will ask voters to approve creating the Expansion TDD. The second vote, expected in November 2014, will ask voters to approve the specific revenue source, i.e., the sales tax and the maximum special assessment rates.
Q: Why are we starting now to create the new Expansion TDD if the expansions are not expected to be constructed until 2019?
A: It is essential that a local funding source be in place when the federal government is considering the City’s application. The City’s intention is to apply for federal funding in early January 2015, and therefore the two Expansion TDD elections need to be completed before then.
In order for the first question – to approve forming the Expansion TDD – to be on the Aug. 5, 2014 ballot, the court order authorizing that first election needs to be issued more than 10 weeks in advance, which would be May 27, 2014.
To allow plenty of time for all necessary notices and legal procedures, it is necessary that the petition to form the Expansion TDD be filed around Jan. 24, 2014. If it becomes necessary during the court proceeding, it would be possible to make amendments to the petition, although this is not anticipated.
This timeframe is important because the current leadership at the U.S. Department of Transportation is very supportive of transit funding for local projects like the expansion routes.
Q: What are the revenue sources and maximum rates that have been approved for the Phase 1 TDD?
- A sales tax not to exceed 1 percent on sales within the Phase 1 TDD boundary
- A special assessment on real estate within the Phase 1 TDD boundary, with maximum annual rates as follows:
- 48¢ for each $100 of assessed value for commercial property ($1,536 for each $1 million of market value)
- 70¢ for each $100 of assessed value for residential property ($266 for each $200,000 of market value)
- $1.04 for each $100 of assessed value for property owned by the City (which would mean a total annual City payment of about $810,000)
- 40¢ for each $100 of assessed value for real property exempt from property tax, such as religious, educational, charitable, etc. property, but only on market value more than $300,000 and less than $50 Million.
- A supplemental special assessment on surface pay parking lots within the Phase 1 TDD boundary (not garages and not free parking lots). The maximum rate for the supplemental special assessment on surface pay parking lots will be $54.75 per space per year.
Phase II Streetcar TDD – Proposed Boundary 3.24.2014