Kansas City is in the early stages of a major power shake-up that could radically change how the development incentive game is played here.
If you’ve been reading my column for a while, you know my opinion of the city’s use of tax incentives to spur economic developments: For years it’s been the biggest scam in town.
One reason for this is that the agency that administers these programs – the Economic Development Corporation of Kansas City – earns most of its money through a commission system. They rake in a percentage of every tax break that gets approved. So they have an incentive to make sure that lots of tax breaks get approved.
Well now, according to a stack of documents I’ve obtained, there is a serious move underway to change this system.
Last Friday, Mike Chesser, chair of the EDC, called a meeting of some of the most powerful people in the city – the Mayor, City Council Members, top business leaders and even a representative of labor. And at that meeting they unveiled a proposal to essentially disband the EDC and create a new agency that would handle all of the city’s economic development incentives.
Here’s the potential new economic incentive model that was presented at the meeting.
It remains to be seen whether or not they can pull this off.
I spoke with Chesser tonight by phone and he stressed -- several times -- that "we are nowhere near having a set proposal."
But still, this is a real, serious move to change the way things are done in KC. And that's welcome news to me. Some of the bullet points that were presented on Friday are like art to my often cynical eyes:
- “Disconnect EDC funding from incentive granting.” Translation: end the conflict of interest.
- “De-politicize the development process.” Translation: Make sure we approve projects that are in the best interest of the city, not the fat cat insiders who make the biggest political donations.
- “Greater emphasis on small business, entrepreneurship, organic business retention and growth, workforce enhancement and distressed areas.” Translation: Use the incentives to improve the local economy – especially where poor folks live – rather than just funding big-ticket real estate deals.
I’ll be digging into this story in the coming days, so be sure to check out my column this Sunday. I'll have more from my conversation with Chesser.
Meantime, check out these documents for your reading pleasure:
(Oh yeah, and take that, Kevin! Scooped ya big time!!)
