Saturday, August 13, 2005

cut 4

At issue was a tax abatement for Crown Center, an upscale shopping, office and residential center just south of downtown, adjacent to the headquarters for Hallmark, which owns the development. The center was planned in the late 1960s as a means of rejuvenating the area, which had begun to resemble a slum. The project sprawled out over the next two decades, gobbling up acres of old neighborhoods, with each phase's development buoyed by generous tax breaks. Now, in 2002, the last of these was set to expire, but city and business leaders were pushing to have them extended for another 20 years, largely because the center’s retail ventures were unsuccessful and the mall was barely able to stay open even with a reduced tax burden. The abatement would affect the school district because it depends on property tax.

One of the board members, Elma Warrick, stiffened in her seat and frowned. She said she'd been investigating the situation. She’d called a city official and felt "insulted" when the gentleman told her he hadn't spoken with anyone from the school district—indeed, he didn’t even know the proper person to contact. She complained that city leaders could care less about the needs of Kansas City's school children.

Board President Mauro shifted in his seat. He said he wanted to talk about the matter, but he that it would be unethical to do so because his son was a high ranking executive for Hallmark. But the district’s top in-house attorney told him it was OK. "I think you ought to voice your opinion," Warrick said haughtily. "Whether you are able to influence me is another question."

Mauro agreed that the abatement was a bad idea from the school district's perspective, and that they ought to fight it. But, he said, it was already to late. "One of the problems is we hear about these decisions after all of the staff work is done," he said. "And we need to be considered. It’s really at the staff level is where it all happens."

What he meant was that decisions about tax abatements and development projects are made behind the scenes, before the matter comes up for public debate. Public meetings are mere formalities. Mauro would know. He'd been president of the Downtown Council, an group of downtown business owners who pushed for more city investment in its withering commercial core. He helped spearhead a major residential and commercial redevelopment on the western edge of downtown, which was aided by tax breaks and the power of eminent domain given to a few well-connected developers and law firms.

It was all so ironic. Less than a year earlier, Mauro had recruited a slate of candidates to run for the school board because he was frustrated by the way other board members, Warrick among them, would decide matters behind the scenes. Mauro, a longtime civic leader in Kansas City, had trouble swallowing his own medicine. So he held a series of breakfast meetings and built his own majority, a "Mauro Majority," we called it in an article in the Pitch.

Now, as board president, he was saying with a straight face that this is how things work at City Hall, where white folks are in charge, and there's a whole lot more money on the line. Mauro could have spared Warrick the lecture. She knew full well how things worked in this town. Annual audits of the city's tax break system revealed a program in which developers essentially called the shots. These developers and their attorneys formed a small circle of insiders, the reports revealed, nearly all of them heavy campaign contributors. Moreover, the staff and board members who ostensibly represented taxpayers' best interest in these endeavors were typically former employees and associates of the developers and law firms that were benefiting from the program. On the other hand, the developers' attorney's were often former city council members and city staffers. The program had no policy that dictated where such benefits should be directed and which projects ought to be supported, though state law required such a policy to be in place. These investigations found that earning projections for proposed projects were almost always overblown, and that the city was losing hundreds of millions of dollars to fund them. One audit was particularly scathing. It found that the financial books at the city agency that oversees the tax breaks was woefully mismanaged. In many instances, developers were reimbursed with tax money with little or no documentation that they’d spent money. In some instances, these developers double billed or sought repayment for expenditures that were not legal under their contracts.

Not that Warrick was innocent herself. A year earlier, the federal judge overseeing the desegregation case had ordered an investigation into allegations of patronage and micromanagement by board members. Though the judge ultimately ordered that the results of the $100,000 investigation remain sealed, I learned that it had focused primarily on her. Shortly after Warrick and four of her colleagues had unseated the superintendent, Warrick began meeting with the newly installed superintendent and Gwen Grant, director of the Kansas City chapter of the Urban League. Grant and Warrick were close friends; the urban league had established a nonprofit Warrick ran, the Family Resource Center, from which she drew a $50,000 salary. At the time of these meetings, Urban League officials continued to keep the FRC's financial records. Together, Warrick and Grant pushed for the new superintendent to enact a district reform initiative, which would require an outside contractor to provide professional training to principals and teachers. Coincidentally, the Urban League was simultaneously offered a no-bid contract to offer the exact kind of training that was spelled out in the reform initiatives. As soon as the investigators' report was finished, and when board members and other parties in the desegregation case were deciding whether to allow the report to be released to the public, Warrick retained a lawyer to represent her at district expense, costs totaling $20,000. Now, just a year later, at the time of this meeting, the reform initiative had been essentially abandoned, though the Urban League had received full payment on its $160,000 contract. There were other suspicious incidents as well. For a time, Warrick's niece was employed in the district's legal department, which was run by another friend of Warrick’s, Kathy Walter-Mack. And within a few months of the patronage investigation’s conclusion and burial, another close friend of Warrick and Grant, Dianne Cleaver, former mayor Emanuel Cleaver's wife, received a no-bid contract to serve as an assistant to the superintendent. She was later hired to a permanent position after a costly candidate search which Cleaver herself and another close friend of her and Warrick (and district contractor) helped direct.

Through the window from our perch on the tenth floor I could see Crown Center in the distance. It was a cold November morning and long clouds of white steam billowed from vents on the tops of office towers. I could see the neighborhoods of the city’s east side, the shabbiness of some of the houses visible even from the distance, and the tree-lined parkways leading to Country Club Plaza the mansions of the Southwest Corridor, where Mauro lived. These sinewy patches of green perfectly bisected the city and, from where I was sitting, they were framed perfectly between Warrick and Mauro, with Warrick on the left side of the conference table, the east, and Mauro at its head, on the west. It was a perfect image of Kansas City.

No comments: