Thursday, December 10, 2015

Missouri 2030 Provides Long-term Vision for the State

By Paul Thompson

Dan Mehan of the Missouri Chamber of Commerce introduced attendees at the Friday, December 4 Grandview/South KC Chamber Government Affairs breakfast to a new, long-term vision for the state known as the Missouri 2030 plan.

Missouri 2030 came into being as the result of a year-long analysis by the Missouri Chamber of Commerce into the state’s recent economic performance. Those studies concluded that Missouri has fallen behind economically compared the rest of the U.S. Mehan discussed several concerning developments: from 2004-2014 Missouri ranked 42nd in the U.S. in employment growth, 43rd in in per capita GDP growth, and 37th in per capita income growth. With those economic statistics in hand, the chamber sought to take the lead by answering an essential question.

“What can we do to really position the state in a better light?” Mehan asked. “When we looked at the data that is the real thing, we are in the 40s or 30s. We’re never above the mid-range; pick the metric.”

The result of that thought process is Missouri 2030, a comprehensive, long-term plan to improve Missouri over the next 15 years. The plan narrows its sights on four primary areas of focus: preparing the workforce, competing for jobs, connecting through infrastructure, and uniting the business community. Each individual focus has a series of goals and action steps within it designed to make the hopes of the chamber a reality.

Properly preparing Missouri’s workforce has been tabbed as the plan’s top priority. The action steps created to accomplish that goal include advocating for K-12 and higher education funding, creating PSAs and social media campaigns touting technical jobs, promoting student internships  with Missouri employers, and expanding the number of scholarships available for high achieving Missouri students, among others. Mehan said that he too often hears from business owners who can’t find qualified employees.

“I hear things like, ‘I’ve got the jobs, but I hired somebody who showed up for two days and then I never heard from them again,’” he said.

Center school district superintendent Dr. Sharon Nibbelink, who was in attendance at the meeting, concurred with the plan’s notion that today’s students need more hands-on time learning from the state’s economic drivers.

“We have to get kids into your businesses, and into the real world,” said Nibbelink.

Already, Mehan has seen strong business support for the Missouri 2030 Plan, including the South Kansas City and Grandview Chambers of Commerce.
“Seventy-five chambers of commerce have said that they want to be a part of this,” said Mehan. “If you extrapolate out how many small-business employers that is, it’s over 45,000.”

Mehan noted that if Missouri is going to fundamentally change, it needs to happen at the behest of business owners. Elected officials in Jefferson City are hampered by revolving doors and term limits, and the resulting push for strong legislative action has led to a pronounced increase in proposed bills early in the session.

“We just started on Tuesday, December 1, and there’s already been more bills filed than last year by a factor of three,” said Mehan. “We’ve got a lot of unfinished business on our agenda that typically carries over from last year. Governor Nixon has the honor of being the most vetoed governor in the history of Missouri.”

“There is no continuity in leadership,” he added. “The continuity is the people in this room that are creating these jobs and opportunities.”

Mehan said the Missouri Chamber understands that the state’s economic fortunes won’t change overnight. But he feels that their first step – building a realistic vision – will help bring Missouri real results.

“You don’t see us saying that we want to be number one; we just want to be in the top half to start with. We’ve got to walk before we can run,” he said. “In the typical Missouri way, the house will have burnt down and then we’ll try to fix it. That’s what we’re trying to fix with this Missouri 2030 plan.”


The Missouri 2030 plan can be viewed online at http://mo2030.com/.

Thursday, December 3, 2015

Grandview Aldermen approve $52.5 million Botts Road industrial project plan

by Mary Wilson

A public hearing was held in front of the Grandview Board of Aldermen on Tuesday, November 24, regarding a potential industrial project to be developed on 68 acres of land at 143rd Street and Botts Road in Grandview. Joe Lauber, the City of Grandview’s economic development special council, presented a staff and consultant’s report regarding the details of the industrial development plan.

The developer, Botts Road Property, LLC, plans to build twelve buildings on the property, totaling 737,000-square-feet in the industrial/business park. In addition to the buildings, the developer will also provide associated street, utility and other infrastructure improvements.

“I want to emphasize that this is just a plan,” said Lauber. “The numbers presented in this plan are estimates and projections based on what the applicant and what city staff and consultants believe to be future events. As we all know, as these plans unfold, sometimes there are differences.”

When a developer approaches the city requesting incentives, the city and consultants work to determine whether the developer’s numbers are justifiable and whether incentives are a necessity and if so, how much. According to Lauber, in the case of this proposal, Botts Road Property, LLC’s initial request was one that did not work well for the city or the taxing jurisdictions.

“To this applicant’s credit, they cooperated with us to arrive at a plan that was much more mutually beneficial to all parties,” said Lauber.

The incentive tool considered for the plan is the Chapter 100 Industrial Development tool. With a Chapter 100 plan, the statute creates a situation where the property that is subject to redevelopment becomes owned by the city during the time the incentives are in place. Because it is owned by the city, that makes the property tax-exempt. The owner, in this case Botts Road Property, LLC, will transfer the property to the city and become the tenant, creating abatement.

The applicant requested 100% exemption/abatement for 15 years per building. The abatements would only become eligible when a tenant proves that they have invested at least $50 per square foot in construction. This ensures that the city is not abating empty warehouses.

“This is a speculative project,” said Lauber. “It’s one where the applicant at this point does not have tenants lined up to come in, so we don’t know exactly what we’ll get.”

The applicant also agreed that there would be no new abatements after ten years of the initial exemption. The financing mechanism will be Chapter 100 Industrial Development bonds purchased by individual companies or their lender and paid through a lease-purchase agreement.

“It is not the type of project that would typically go out to the open market to be sold,” said Lauber. “It’s a very close transaction in that circumstance.”

While the city will own the property, the cost of constructing the buildings will be covered by the industrial development bonds. The debt service on that financing is then paid by the company that comes in the form of a lease payment to the city.

The city also worked with the developer to address issues regarding improvements included in the project. The developer will build and own all of the streets, drive lanes, parking and other public improvements, keeping them private. The city will then enter into a 40-year agreement with the developer to maintain the improvements. In order to cover the maintenance cost, the developer will pay additional rent for the services, equaling to 32.5 percent of the would-be tax bill.

“The city keeps 12.5 percent of that,” said Lauber, “with an additional 20 percent going to the developer to help attract businesses to come in as quickly as possible. The agreement then requires the developer to dedicate the improvements to the city after the 40 years.”

The city worked with the developer to ensure that all of the taxing jurisdictions affected by the development did see some tax benefit from the project. While the developer asked for 100-percent abatement originally, a 90-percent abatement agreement was negotiated.

“In other words, all of the taxing jurisdictions that are involved will be receiving PILOT (payments in lieu of taxes) payments in the amount of ten-percent of the tax bill during the entire time the property is being incentivized.”

Finally, an additional item ultimately benefitting the developer is a sales tax exemption on construction materials due to the property being city-owned. With the 10 percent PILOT, cumulatively over the abatement period, the taxing jurisdictions will receive approximately $1.4 million in tax revenues that are not currently being created. According to Lauber, the property currently provides  $360 of cumulative property tax revenues for those jurisdictions.

“That is nearly 2,700 times more revenues that will be created once the abatement is over,” said Lauber.


Overall, the developer intends to invest approximately $52.5 million into the community of Grandview. Ultimately, the Board of Aldermen unanimously approved the industrial development project for Botts Road Property, LLC by ordinance.