Columns » Martin

Here’s why that shiny new government building doesn’t really help taxpayers



I played Leonard Nimoy last week and went In Search Of …

The object of my quest? A moving sidewalk.

Its location? Underneath Pershing Road.

My obstacle? Three security guards.

First, some background.

In 2006, the Internal Revenue Service dedicated a new building near Union Station where workers now process tax returns. It's a heavy-looking thing with window slits that seem designed to enable archers to fire upon advancing enemies.

A colossus at 1.1 million square feet, the new building consolidated IRS workers who previously had reported to the Bannister Federal Complex or to an office in Overland Park. U.S. Sen. Kit Bond called the facility a "huge boost to our region's economy" when it opened.

To be sure, architects, engineers and construction workers benefited. The building carries a “green” certification as well, which is cool.

But the IRS also performed a sort of vanishing act.

To build its headquarters, the IRS didn't clip pennies from a few million 1040s. Instead, the federal agency worked with a private developer. The IRS leases its new building from Pershing Road Development Co., a venture of DST Systems and a company controlled by Kansas City insurance executive Michael Merriman.

The Pershing Road group undertook the deal because it qualified for tax-increment financing, a scheme that allows developers to share in the tax revenues created by their projects.

One tax stream that TIF makes available to developers is the 1 percent income tax that's paid by everyone who works in Kansas City. That adds up to a significant sum of money on a project like the IRS facility because thousands of people work there.

City officials further sweetened the deal for the developers. It gets a little complicated, but the important thing to know is that Pershing Road Development Co. is receiving more than just the "incremental" taxes promised by tax-increment financing; it's also getting a piece of the earnings taxes that IRS workers paid to City Hall before the consolidation.

To review: While the IRS employs more people in Kansas City than it did before the redevelopment, fewer of the employees are paying earnings taxes to the city.

Other federal offices have also disappeared into TIF districts. The U.S. Department of Transportation leases a building in a TIF area adjacent to Ilus W. Davis Park downtown.

All of which got me thinking about another rule of thumb: If two U.S. senators from the same state and different political parties agree on something, a ribbon-cutting is probably involved.

On June 17, Bond and his Democratic colleague, Sen. Claire McCaskill, wrote to the head of the U.S. General Services Administration. Their two-page letter asks a series of questions. But it's obvious that the senators' interest in the answers isn't all that genuine.

What they really want is a big, shiny, new federal office building in downtown Kansas City, Missouri.

First proposed in 2006, a new federal building was once considered a done deal. The only mystery was its location: Would it be on downtown's east end or along the Missouri riverfront?

Then, a few weeks ago, officials at the GSA, which acts as Uncle Sam's landlord, asked for a "review." Was the proposed building in the taxpayers' best interest? Could the GSA and the Federal Emergency Management Agency, the building's prospective tenants, make do someplace else without spending all that money on a new place? The GSA, prodded by Sen. Barbara Boxer of California, chairwoman of the U.S. Senate Committee on Environment and Public Works, decided to find out.

Bond and McCaskill say the review is unnecessary.

Comments (2)

Showing 1-2 of 2

Add a comment

Add a comment