Retire the but-for test. State law doesn't require it, and the city doesn't follow it.
Mayor Duncan and members of the Governing Body,
You can fix this with one vote.
Kansas law does not require a but-for test for TIF, CID or RHID. Topeka wrote the test itself, in its RHID resolution (Res. 9627) and its TIF policy, and caps private applicants' returns at a 7.5% cap rate. The analysis is run by consultant Jeff White at Columbia Capital. The city's own deals and GO Topeka's deals are exempt.
So here is the arrangement: private owners and developers pay for a consultant to prove a negative, while the city waves its own projects through. The state's own Legislative Post Audit called the but-for question "inherently unknowable." Its incentive audit found most firms would have built anyway.
Look at what the city did when it held the pen:
- Hotel Topeka: $18,350,135.96 spent. A $7.6M bid against a $3M county appraisal. Sold for $1M cash.
- 220 SE 6th (former AT&T): bought for $1,512,500 in 2019, about $9.4M in public money since, a PILOT of $63K a year instead of about $298K in full taxes, and a $6.5M paper gain at the $8M asking price.
- Gordon Center (Chick-fil-A and Whataburger): two bankruptcies, and a traffic study that wasn't allowed to consider the site's history. That history is exactly what a but-for test should weigh, and it's exactly what this one ignores.
I have one question for each of you: if the test is good enough to impose on private citizens, why isn't it good enough for the city? And if it's not needed for the city, who is it actually for, other than the consultants paid to run it?
I'm asking the council to do three things:
1. Suspend the but-for requirement for private applicants now.
2. Bring a resolution to retire it, or apply one standard to everyone, city and GO Topeka included.
3. Publish every payment to Columbia Capital and Jeff White for incentive analysis over the last ten years, by project, along with who paid.
You voted 9-0 on October 20 to ask voters for an independent auditor. Same principle. Hold the city to the standard it holds everyone else to.
Henry McClure
(762) 291-2765
mcre13@gmail.com
You can fix this with one vote.
Kansas law does not require a but-for test for TIF, CID or RHID. Topeka wrote the test itself, in its RHID resolution (Res. 9627) and its TIF policy, and caps private applicants' returns at a 7.5% cap rate. The analysis is run by consultant Jeff White at Columbia Capital. The city's own deals and GO Topeka's deals are exempt.
So here is the arrangement: private owners and developers pay for a consultant to prove a negative, while the city waves its own projects through. The state's own Legislative Post Audit called the but-for question "inherently unknowable." Its incentive audit found most firms would have built anyway.
Look at what the city did when it held the pen:
- Hotel Topeka: $18,350,135.96 spent. A $7.6M bid against a $3M county appraisal. Sold for $1M cash.
- 220 SE 6th (former AT&T): bought for $1,512,500 in 2019, about $9.4M in public money since, a PILOT of $63K a year instead of about $298K in full taxes, and a $6.5M paper gain at the $8M asking price.
- Gordon Center (Chick-fil-A and Whataburger): two bankruptcies, and a traffic study that wasn't allowed to consider the site's history. That history is exactly what a but-for test should weigh, and it's exactly what this one ignores.
I have one question for each of you: if the test is good enough to impose on private citizens, why isn't it good enough for the city? And if it's not needed for the city, who is it actually for, other than the consultants paid to run it?
I'm asking the council to do three things:
1. Suspend the but-for requirement for private applicants now.
2. Bring a resolution to retire it, or apply one standard to everyone, city and GO Topeka included.
3. Publish every payment to Columbia Capital and Jeff White for incentive analysis over the last ten years, by project, along with who paid.
You voted 9-0 on October 20 to ask voters for an independent auditor. Same principle. Hold the city to the standard it holds everyone else to.
Henry McClure
(762) 291-2765
mcre13@gmail.com
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