Incentives should require signoff
 By Mark ForsytheThe Kansas City Post We've read the stories so many times it fails to register with even the most ardent economic incentive critics. Some small to medium firm receives tax breaks to move from an adjoining municipality like Lenexa or Independence and Kansas City claims "economic development" or "new jobs." It's a wonderful game... if you're one of the companies playing neighboring communities against each other. The business avoids paying property taxes for 10 to 25 years, and since they rarely move more than 20 miles it can retain the majority of its employees. The only thing that really changes is the employees' commute. It would seem with embattled Mayor Funkhouser going around trying to sell a regional light rail plan he would receive a warmer reception if he had something to offer. It doesn't make sense to have conversations about regional cooperation for transit when the attitude towards economic development is anything but. Why not come bearing a pledge? A pledge of a non-compete clause in our supposed Economic Development Policy. I see it working like this. A company grows tired of their current location in Lenexa. Their tax-abated building is about to go back on the roles at full rate, and coincidentally they've managed to "outgrow" their surroundings and need a different facility. Funny how these realizations always seem to happen right about the time taxes need to be paid. The company determines that maybe they should relocate to one of Kansas City's many URD (Urban Redevelopment District) zones where they can receive generous Chapter 353 tax abatements and perhaps some TIF. Here's where the non-compete clause kicks in. Why not make it policy that Lenexa's city council has to approve the deal? It would seem that if everything is above board, if every incentive being offered is necessary and all parties are bargaining in good faith there should be no problem with all parties involved approving the deal. By "all parties" that includes the municipality that supposedly can no longer contain the growing company. After all, we are OneKC. Aren't we? |
posted by Mark at 9:13 AM
Comments on "Incentives should require signoff"
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Eric said ... (11:35 AM) :
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Mark said ... (11:47 AM) :
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Capt. Geoffrey Spaulding said ... (9:00 AM) :
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Bob B. said ... (4:10 PM) :
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Anonymous said ... (11:41 AM) :
post a commentGreat idea, but it would require Joco to participate. KCMO has already tried to negotiate an agreement like this and Joco has always said no.
Joco has their own agreement within the county. For example, if Lenexa can't accommodate a company they will pass them onto a neighboring suburb. Lenexa would also notify Shawnee if a company from Shawnee contacted Lenexa looking for office space.
That's all well and good within the county. The problem is that Joco does not extend the same courtesies to neighbors outside the county. Until they do, KCMO ought to target all the companies who moved to Joco in the 1980s and 1990s and whose tax breaks are about to expire. Those could be ripe for the picking.
"KCMO ought to target all the companies who moved to Joco in the 1980s and 1990s and whose tax breaks are about to expire. Those could be ripe for the picking."
I have to disagree with you Eric. Just because everybody else is doing it doesn't make it right. Or even smart for that matter. The "screw them before they screw us" attitude hasn't profited anyone in Kansas City except for the corporations and their lawyers who know how to play the game.
Kansas City should lead by example. Not just react, or wait until somebody else does it. Sure it may hurt a bit, and we'll probably lose a company or two across the state line but eventually with enough pressure a reciprocal agreement could be maintained. It has to start somewhere. I for one am not willing to sit back and wait for a suburb to show us the way.
"One" with greed maybe....
-Groucho
Shock, Hardy and Bacon have never paid taxes from one building to the next.
Really,how does it effects the middle class family Mark?
First of, I don't think I would put my fate on the hands of another community.
More importantly, I think your assessment that a company "grows tired" of its location is highly offensive and naive. Companies do grow and growth is not a bad thing. Growth provides jobs and income for people.
A non-compete pact should be something that could be easily done as a "good neighboor" agreement. It would be a platitude more than anything because at the end of the day, the region should do what it has to do to preserve jobs within the region, even if that means providing an incentive for a company to move from city to city.
To me, it is more important to prevent property owners from rolling over property from incentive program to incentive program. A property receiving tax abatement should not be eligible to be part of a TIF plan or another tax abatement. These type of rollovers have happened once in a while and they will be probably become more common as some of the old incentive plans reach maturity. The policy rationale behind this is simple: people have to pay their fair share of taxes and if an owner gets an incentive to improve his property, he should make improvements that will make the property useful for a period of time that is greater than the life of the incentive.
Just a thought.