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JEFFERSON CITY | State officials hope a $240 million tax-credit program approved Thursday will lure a Canadian company to build an aircraft assembly plant in Kansas City.
After nearly five hours of debate, senators voted 24-8 to pass the legislation. The bill already had won approval in the House. Lawmakers now will work to reconcile differences in the House and the Senate versions before sending the bill to the governor for final approval.
Kansas City Mayor Mark Funkhouser said the Senate’s vote came after weeks of heavy lobbying from city government and business officials.
“This is real economic development,” Funkhouser said. “This is high-end manufacturing that creates good jobs with good benefits.”
The debate Thursday began with an essentially overhauled version of the tax-credit legislation. For the past five weeks, lawmakers had debated a program that would have allowed up to $880 million in tax credits over 22 years.
Sen. Charlie Shields, the bill’s handler in the Senate and one of its strongest proponents, presented a new version of the bill Thursday. It revised the tax-credit total downward to a maximum of $240 million over eight years and included new safeguards for protecting the state’s investment.
As in earlier versions, the “mega-project” tax credits would be available only to projects that invested at least $300 million in the state, guaranteed creation of at least 1,000 new jobs and met several other requirements. The amount of tax credits provided annually would be based on the plant’s payroll and capped at $40 million.
The legislation also includes a repayment with interest of all tax credits issued, probably as a royalty on each plane sold.
Bombardier Aerospace is considering Kansas City International Airport as the site of a $400 million assembly plant for a new line of midsize commercial jets. The plant is expected to create 2,100 jobs paying an average of $63,000 a year.
Mark VanLoh, the top city executive at KCI, said Bombardier should be satisfied with the package because the firm had a hand in shaping it. A Kansas City financing consultant was with company officials in Montreal on Wednesday while the deal was being revamped in Jefferson City, he said.
“A lot of people worked behind the scenes,” VanLoh said.
Marc Duchesne, a spokesman for Bombardier, declined to comment when asked about VanLoh’s assertion that the compromise had Bombardier’s blessing, but he re-emphasized that his company’s preferred location is the Montreal suburb of Mirabel.
“We believe that Missouri will propose a very serious and interesting offer,” Duchesne said. “I can’t comment on the figures.”
The U.S. location is attractive because, with the weak U.S. dollar recently trading below the Canadian dollar, it would be cheaper to build here.
Bob Marcusse, president and CEO of the Kansas City Area Development Council, said Kansas City is the only location competing for the facility besides Montreal.
Duchesne said Bombardier wants to make a decision no later than January.
Scaling back the state’s obligation was critical to picking up the support for the bill.
“From the time we started to the position we’re in now, this is a better deal for the state of Missouri,” Shields said.
But approval did not come easy on Thursday.
Sen. Matt Bartle, a Lee’s Summit Republican, railed against the bill, arguing that it misused taxpayer money, invested the city in a mercurial industry, overlooked Missouri businesses deserving tax relief and created a precedent of huge giveaways in exchange for development.
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