Kansas, Missouri battle over companies

[dangerboy]

Not a surprise, but Don Nissanka has made it official that his new battery venture will have HQ and plant in Lee's Summit:
http://www.bizjournals.com/kansascity/n ... r-90m.html

[bobbyhawks]

Not a surprise, but Don Nissanka has made it official that his new battery venture will have HQ and plant in Lee's Summit:
http://www.bizjournals.com/kansascity/n ... r-90m.html

I think I just figured out a loophole that could get KCMO back in the game.  Instead of offering ridiculous tax incentives to entire corporations to relocate their businesses, offer tax or housing incentives to CEOs of companies to relocate their businesses.  They could create a fortress/gated community near downtown with free million dollar homes for C-level execs at companies of a certain size who sign leases of certain duration, with a year long parachute if they get fired.  Bruce Wayne and Tony Stark could be their neighbors.  No matter, there would be so many ethical, financial, and legal issues involved in such a situation it would be impossible.

But that does get me thinking.  Could KCMO build or partner with someone to build a corporate apartment complex downtown that is not income restricted, is cheaper than normal units, and is only available to companies within a River through Crown boundary?  That sounds like a great way to attract young talent and to give companies a free benefit for their employees.  If you are going to subsidize anything to attract a company, wouldn't it be better if that subsidy also brought in more residents to the area?

[aknowledgeableperson]

1. They may not want to live in an apartment complex.
2. They may not want to live downtown.

[mean]

1. They may not want to live in an apartment complex.
2. They may not want to live downtown.

Um. Who cares? Then they don't have to. They can go live wherever they want.

[KCMax]

1. They may not want to live in an apartment complex.
2. They may not want to live downtown.

1. They may want to live in an apartment complex.
2. They may want to live downtown.

[KC-wildcat]

They may like batteries. 

...or, they may not. 

[loftguy]

I feel so liberated with the possibilities.

3. They might not want asparagus
4. They might not want to breathe air
5. They might not want to sex Sarah Palin
6. They might not want to be a millionaire

It's freaking endless!


Oh, by the way Bobbyhawks, that is a rather brilliant idea.

[bobbyhawks]

1. They may not want to live in an apartment complex.
2. They may not want to live downtown.

That's beside the point.  Many companies offer transit stipends for carpooling and public transportation.  What if employees want to drive themselves?  What if they don't want your health insurance, etc?  What if they never eat at your in-building cafeteria?  These are part of the packages that make a company appear to be working hard for their employees and keep them happy without having to pay out the ass.

The point is, this would be a free benefit that the city could pass on to downtown companies, who could in turn tout that they are taking part in revitalizing the communities, and saving a few hundred bucks/month on rent would make working for a downtown company a lot more attractive to bright young individuals and anyone else who would be willing to relocate.  It would start with one building, and one commitment to a new company (or existing co. with sufficient lease terms), then progress if it is successful.  The worst case scenario is that nothing changes; the exodus to the suburbs continues; and the city loses some money trying to land new business (but has built new infrastructure).  

I know that places like Lockton have deals with apartment complexes on the Plaza for cheaper rent, and a lot of their new employees end up living in them.  I don't see why this couldn't work as a proactive and general benefit for downtown companies.  A lot of young people out of college have debt, yet make $30k+.  They don't qualify for low income housing, yet can't afford a $900/month apt.  The opportunity to offer a significant discount for a quality place may keep them from moving down the street from their parents in OP because they can split a 5 bedroom 3 ways for cheaper per person.

[FangKC]

I'm not convinced the E-tax is what causes companies to move to Kansas. Taxes in Kansas are higher than in Missouri overall--even with the E-tax figured in.

However, I will concede it might be a reason for a KC company to move to Lee's Summit or Liberty, or a new company to open there instead of here.

Companies moving to Kansas are more likely lured there by liberal Kansas incentives packages, which are more lucrative than what KCMO and Missouri offer.  If Missouri offered essentially the same lucrative incentive, I doubt the E-tax would be a factor, and companies would stay in Missouri.

I would wager that a bigger factor (than most people will acknowledge) is the simple fact that most of the executives making the decision about company locations already live in Kansas, and want a shorter commute. And the truth be known, they could care less if that meant that some of their employees will now have longer commutes from Liberty, Independence, or Lee's Summit.  Never discount personal selfishness as a motive.

The other thing about this is that many local business leaders have a lot of influence in Jeff City and Topeka.  These relocation incentives didn't come out of nowhere.  Businessmen have learned that you can get taxpayers to fund your operations, and expansions. They have learned to play both states against the other.

Once they have all moved over to Kansas, and their incentives are about to run out. These same business leaders will get Missouri to enact the same incentives, and then they will  move back to Missouri.  You mark my words.

[aknowledgeableperson]

The point is, this would be a free benefit that the city could pass on to downtown companies,
...
I know that places like Lockton have deals with apartment complexes on the Plaza for cheaper rent, and a lot of their new employees end up living in them.

That's the point, it would be very expensive for the taxpayer to pick up the cost.  If a company wants to do it on their own more power to them.

Most, if not all, newer residential units downtown are already subsidized through abatements, TIF's, etc and to throw an additional subsidy doesn't make much financial sense.

3. They might not want asparagus - so give them a subsidy so it is free and shove it down their throat
4. They might not want to breathe air - so we will pay for their funeral
5. They might not want to sex Sarah Palin - we will give them a Hillary Clinton blowup doll
6. They might not want to be a millionaire - will throw money at them anyway, afterall it is just the taxpayer's

[bobbyhawks]

Not disagreeing with you Fang.  The E-Tax is just a whipping boy.  I just thought that any way to sweeten the pot and at the same time encourage employees to live in the area would be beneficial; something that is badly needed downtown. 

As for the selfishness of CEOs, that is the genesis of the idea (it branched off from the half-joke CEO fortress idea).  The incentives combined with convenience for C-level are 99% of the reason why these companies are choosing suburban locales.  The Kokam guy lives in Lee's Summit and he got great incentives = ball out of park.  Downtown KCMO will continue to have to offer great incentives, but they have the opportunity to offer other benefits that no other part of the city can come close to.  >.  I can only imagine how many more quality programers and engineers Garmin would get if they had a headquarters and affordable places to live downtown.  That complex of duplexes across from their headquarters is the most depressing thing I have ever seen, aside from much of Wichita.

[aknowledgeableperson]

I'm not convinced the E-tax is what causes companies to move to Kansas.

It is not a sole factor in the decision making process but I would say it is one of the factors considered, especially on an individual basis.

Your point about the executive is important though.  For one making $200,000/year and already living in KS moving the company/office from KCMO to KS saves him/her $2,000 a year plus simplifies income tax reporting from two state returns to one return.  And if he/she has a tax professional doing the returns saves additional money there.

[bobbyhawks]

That's the point, it would be very expensive for the taxpayer to pick up the cost.  If a company wants to do it on their own more power to them.

Most, if not all, newer residential units downtown are already subsidized through abatements, TIF's, etc and to throw an additional subsidy doesn't make much financial sense.

The problem with many of these places is that you have to earn far below the average salary for a downtown office worker to be able to live in any of the "affordable" housing.  I fell into the nether region for a long time after college of not being able to afford an apartment that I would want to live in, and not qualifying for any of the "affordable" options.  I lived in the burbs for a few years, and I can totally see how people get sucked into staying there.  If it weren't for my total obsession with the city, things like this forum, and me not exactly being a suburban type guy, I could be another casualty of the convenience.

Asking a single college grad making 25-40k before student loans and credit card debt to pay $800 for a small apartment is asking a lot.  They really have to want to live downtown for that option to make sense.  That ends up being almost half or more than half of their after tax income.  I think subsidized corporate housing would provide more overall benefit to the area than does subsidized low income housing, but that is perhaps just me.

[Highlander]

It is not a sole factor in the decision making process but I would say it is one of the factors considered, especially on an individual basis.

Your point about the executive is important though.  For one making $200,000/year and already living in KS moving the company/office from KCMO to KS saves him/her $2,000 a year plus simplifies income tax reporting from two state returns to one return.  And if he/she has a tax professional doing the returns saves additional money there.

The E-tax is not a factor at all.  Unless a tax is truly repressive and the e-tax isn't, people generally do not fret about it, particularly people who make >200,000$.  My salary is what some here might consider pretty well paid and I could care less about a 1% tax, I willingly pay nearly that much to drive the toll roads of Houston so I don't have to put up with the interstate traffic crap, quality of life is my and most people's first concern.  The same is true for most of my colleagues.  

Companies do consider a lot of options when relocating but any company that has any size or is owned by out of city concerns is not going to seriously consider the e-tax an impediment to business.  If anything, it's an afterthought but not a reason.  If professional staffs live largely in Joco, that would be a far greater issue, most companies will go to some lengths to retain professional staff while not really considering the wishes of their more replaceable non-professionals.  

[KCPowercat]

He is just trolling, why entertain him?

[GRID]

etax = scapegoat.

[aknowledgeableperson]

The E-tax is not a factor at all.   

For some it may not be a factor, for others it is.  At least according to comments made by some decision makers in the past concerning moves from KCMO.

[Highlander]

For some it may not be a factor, for others it is.  At least according to comments made by some decision makers in the past concerning moves from KCMO.

references?  I've never seen any company that matters in terms of employment seriously refer to the e-tax as a reason for relocating its business. 

[grovester]

etax=cover story

[warwickland]

can we somehow change certain forumers screenames to like a goldenrod color?