The Missouri Downtown Economic Stimulus Act (MODESA), a tax incentive program that helped finance the Power & Light District in Kansas City, has been revived by Missouri lawmakers. The updated program allows for the expansion of existing developments, two new developments per municipality, and an expansion of what taxes can be collected to fund the projects.

Local Impact

The program’s revival could support upcoming developments like the Kansas City Current’s riverfront expansion and the Royals’ proposed ballpark at Crown Center. Dan Moye, vice president of land development for the Economic Development Corp. of Kansas City, said the program’s revival would be helpful in tackling issues like vacant property downtown and aging infrastructure.

The bill awaits Gov. Mike Kehoe’s signature or veto. The deadline for decisions on bills this year is July 14. For each development project, the process starts with the municipality, which applies for projects and selects developers through a bid process after receiving approval from the Missouri Department of Economic Development.

Program Details

The core funding mechanism for those projects works by diverting some of the new state and local tax revenue the development creates to reimburse project costs. The updated version allows projects to capture 50% of new revenue from state and local income taxes, sales taxes, municipal earnings taxes, and other economic activity taxes.

Expanded development projects can capture up to 70% of new state income taxes if the DED determines the project is unlikely to occur without greater state contribution. The program also requires local matches, meaning the municipality can issue bonds and accept payment in lieu of taxes to help fund the developments.

Original reporting: The Beacon (Kansas City) — read the source article.