Too often we become caught up in questioning elected officials on what they didn’t do. Occasionally, we need to stop and recognize what they do.
Last week, The Citizen wrote a story detailing questions the Platte County Commission had for the owner of Zona Rosa — a popular retail development and shopping district off of Barry Road. The matter confused me enough that I decided to ask a few questions to see if I could clarify the situation.
I did, and the results are a bit startling.
To summarize the findings, I will detail:
A split vote in 2007 put Platte County taxpayers at risk
There’s at least some reason for concern at this point
Let’s be glad the three commissioners have decided to be proactive, even if this all blows over
Basically, Zona Rosa’s ownership — Olshan Properties in New York — needs to reinstate a letter of credit for $500,000 to help restore some confidence in potential tax payment shortfalls. For the first time since the agreement to form a Transportation Development District (TDD) in 2007, the company failed to provide cash to cover the shortfall in revenue for a bond payment.
Olshan Properties, which declined comment on the matter, instead drew on its letter of credit to make this year’s payment. As of Monday, that letter of credit had not been restored.
Still with me?
The TDD formed helped build extra parking garages for Zona Rosa with a payment schedule starting in 2008. Previously, the City of Kansas City worked with the developer to secure bonding and liability, but that changed when the 2007 commission entered into the TDD agreement.
This — perhaps unwittingly — put all Platte County residents in a precarious position a decade later.
Payments started at just under $2 million but have now increased to just more than $2 million per year. Revenues from the TDD tax have fallen short in recent years with Olshan covering the difference out of pocket.
That changed this year, and without a new letter of credit, Platte County must plan for next year’s payment, scheduled to be made Dec. 1, 2018, to again be short. If that’s the case and with no letter of credit, Olshan would again be responsible for the difference in cash.
If Olshan doesn’t pay? Well, then there’s a hole in the Platte County budget that needs filled.
The Platte County Commission issued a statement earlier this month that read in part, “This year Zona Rosa did not make a cash payment. Therefore, the trustee requested and received the draw on the letter of credit to cover the entire 2017 payment.” Without a restored letter of credit, Platte County general fund money — yes, your tax dollars — would be needed to make up the difference.
Credit goes to presiding commissioner Ron Schieber and commissioners Dagmar Wood and John Elliott for being proactive. The budgeting process will surely include plans to prepare for this, hopefully, unnecessary contingency.
Maybe the public scolding could’ve been handled differently, but at least we know.
Platte County elected officials have secured legal counsel, another cost to taxpayers, to try and assure this doesn’t leave the taxpayers holding the bag. There’s almost 15 more years of payments due with the schedule calling for full repayment on Dec. 1, 2032 — that one with a price tag of more than $5 million.
Call it the “Amazon Effect” or whatever you want, agreements are made and markets change. Hopefully, this is just a minor scare with a positive resolution for all involved, but for now, know your elected officials have taken the steps to start looking now to try and protect taxpayers.
That shouldn’t be overlooked.
Ross Martin is publisher of The Citizen. He may be reached via email at email@example.com. Follow him on Twitter: @Citizen_Ross.