Gillon Property Group’s plan to redevelop the Country Club Plaza is being built on a foundation of shrewd financial moves.

First, the ownership group bought the Plaza in 2024 for $175.6 million — a fraction of what it was worth just a few years earlier.

That was just the beginning.

Since then, the owners have appealed the county’s assessment of the Plaza to slash their property tax bill by nearly 40%. They’ve pushed a $210 million tax-increment financing plan that would divert sales taxes to help rebuild crumbling infrastructure. Finally, they’ve proposed a property tax incentive to help finance about $1.5 billion in Plaza projects that could effectively lock in their property tax bill for three decades.

All those breaks start to add up.

“It’s this deal, plus this deal, plus this deal, plus, you know, going to the Board of Equalization,” said Bruce Eddy, the executive director of the Jackson County Community Mental Health Fund and a member of the Tax Increment Financing Commission. “So, you know, somewhere, I suppose somebody knows how much this is costing the public. But it’s been divided up to downplay how big it is.”

Here are four key ways that the Plaza owners have positioned themselves for good deals to redevelop Kansas City’s landmark shopping district.

Discount shopping

For years, property values in the Plaza have slumped as the shopping center lost tenants.

“People who have been in Kansas City for a while still think of it as this kind of elite, upscale asset,” said Jon Stephens, president and CEO of Port KC, which is considering a proposed property tax incentive for Plaza redevelopment. “Something that I think people haven’t always acknowledged is (that) it is a depreciating asset. It has continued to go downhill.”

The Plaza hit a new low in June 2024 when Gillon Property Group purchased it for $175.6 million.

That may sound like a lot of money, but it’s a fraction of what the previous owners paid for it just a decade ago, when they bought the Plaza for $660 million. Adjusted for inflation, that’s equivalent to about $875 million in 2024 — about five times what the new owners paid.

Look even further back, and Highwoods Properties, which owned the Plaza until 2016, purchased the properties when it acquired the J.C. Nichols Co. in 1998 for $544 million. (That’s about $1.1 billion in 2024 dollars.) 

There are a variety of reasons for the drop in value. For one, as of April 2025, nearly one-third of the Plaza’s storefronts sat vacant. The Kansas City Star reported that the vacancy rate may be higher than it was even during the Great Depression.

In addition, the century-old infrastructure for stormwater and sewage is deteriorating and pushing the limits of its lifespan.

“A lot of people told us not to” buy the Plaza, said Dustin Bullard, the vice president of partnerships and place at Gillon Property Group, at a Dec. 3 meeting at Kansas City Hall. People said “it seemed tired, it’s unsafe. There’s deferred maintenance. It’ll never be the same as it once was. We didn’t believe that.”

Appealed property assessment

Since Gillon Property Group purchased the Plaza for $175.6 million, the owners now argue that the market value has dropped another 37% — to just $111 million.

That’s an 87% decrease since 2016, accounting for inflation.

Gillon Property Group filed an appeal with the Jackson County Board of Equalization in July, arguing that “income and expense and market support a lower value.” 

For years, appealing the valuation of the Plaza for property tax purposes has become a matter of routine for its owners.

“Under the previous owners, they appealed their taxes every single year,” Stephens said. “I believe they were successful or negotiated in almost all of them, because it was the reality (that) the asset was declining.”

In 2019, the former owners appealed the value of the Plaza for property tax purposes from $292 million down to $180 million. Then in 2021, the assessment was appealed from $329 million down to $215 million. In 2023, an appeal brought the value from $402 million down to $200 million.

But the 2025 assessment is especially important. That’s because the Plaza’s 2025 tax bill could be used as a baseline when setting up Gillon Property Group’s tax incentive through Port KC.

Essentially, the Plaza’s taxes for the next 30 years could be frozen at a lower level depending on the outcome of the appeal, as well as negotiations with Port KC and taxing jurisdictions including Kansas City Public Schools.

This is referred to as a “stealth incentive” by local leaders like Eddy.

Eddy runs one of the many taxing jurisdictions in Kansas City that get property taxes from the Plaza and could see a hit from a property tax incentive from Port KC.

“That’s a trick that’s played by development attorneys in Kansas City,” he said. “I don’t want to say (the Plaza) is dead, but it sure is on life support. So I’m sure they bought it for a song, and then they’re going to argue the value down again. And that’s for their margin.”

Infrastructure costs covered by a tax-increment financing plan

The Plaza is also under consideration for a tax-increment financing plan, also called a TIF, through the Economic Development Corp. of Kansas City.

That TIF would redirect what are called “economic activity taxes,” or EATs, to pay for infrastructure improvements at the Plaza.

Those EATs include sales taxes paid on purchases at shops on the Plaza, as well as earnings taxes generated by employers on the Plaza.

Ordinarily, those taxes would go to the state of Missouri or the city of Kansas City to pay for public safety expenses, capital improvements or other government services. But the TIF will redirect some of that money to Plaza improvements.

A TIF sets a baseline level of taxes that are generated by the Plaza at the beginning of the redevelopment project. That baseline amount will continue to go to the state or the city. But increases in revenue above that baseline within the TIF district over the next 23 years will be redirected to pay for “infrastructure improvements” specifically in that district.

That could include some of the aging stormwater and sewage lines, as well as sidewalks, roads, parking structures, streetlights and utilities.

Many of these items would have been covered by public money anyway. But the TIF will allow the Plaza to jump the line to make sure those upgrades are completed sooner.

In all, the TIF plan is expected to pay for about $210 million in infrastructure improvements.

The plan was approved by the TIF Commission on Nov. 24, but still needs to be approved by the Kansas City Council before it can go into effect.

Property taxes frozen at the lower assessed value

The biggest — and most controversial — piece of the puzzle for Gillon Property Group is a proposed property tax exemption through Port KC.

The initial proposal that was presented to Kansas City’s taxing jurisdictions in November would have exempted $309 million in future property taxes for the Plaza’s owners, equivalent to about 72% of the taxes they would have otherwise paid for the next three decades on the redevelopment.

Essentially, that deal would have set the Plaza’s property taxes at $3.5 million annually, which is the amount they could expect to pay if their pending appeal to the county is approved. 

By getting this deal from Port KC, they would no longer have to negotiate with Jackson County for a lower value — Port KC would have set their taxes at that low level, rendering the appeal largely irrelevant. Then, the taxes would be frozen at that lower level for three decades, with a 2% increase every two years.

Since then, Kansas City Public Schools has come out swinging against the proposal, calling it “malpractice” in a letter to Port KC. KCPS leaders argue that the schools would get less money under that proposed deal than they do now.

Port KC, the school district and the developer have met since then to negotiate the proposal before coming before the Port KC Board of Commissioners once again.

The second version of the proposal was better for the taxing jurisdictions, but the school district continued to oppose it and said the new version would still hold their revenues flat — better than reducing them, but still not necessarily delivering any guaranteed benefit.

“This proposal represents a betrayal of our community’s commitment to our schools,” KCPS Superintendent Jennifer Collier told the board on Dec. 22. “The proposal is a loss for our teachers, our students and our residential taxpayers.”

Over the past month, negotiations have been quiet, and Port KC has not said when they expect the plan to go to the board once again.

But Stephens, the CEO of Port KC, said that without a deal, Kansas City risks letting the Plaza’s value slump even further. In that way, he said freezing taxes for the Plaza would protect the school district from losing money in future appeals.

“It, one, guarantees that the school district receives that money, and (Gillon is) disallowed from appealing that,” Stephens said. “So if retail dies, if things fall apart, it’s a floor that they have to continue to pay, and it will increase annually for the whole term.”

So the fundamental issue is where to set the floor.

Given Gillon’s ongoing assessment appeal with the Board of Equalization, the Plaza’s owners have additional leverage in negotiations. 

Even then, people like Eddy or leaders at the school district want to make sure decision makers consider the math of inflation when they set the percentage increases every year.

“This is what the politicians and the developers will say: ‘You’re not losing any money,’” Eddy said. “And what they mean is that the value was frozen … It was, yes, frozen even lower than it started out originally. And then where I come in is to say, ‘OK, the cost of schools, the cost of community colleges, the cost of uninsured health care is not frozen over those 30 years.’”