Kansas City Mayor Mark Funkhouser’s effort to encourage development in the inner city has taken form as the “New Tools” initiative.</p><p>Supporters say it will emphasize self-reliance and entrepreneurship in economically distressed neighborhoods. As task force member Spark Bookhart put it in a meeting with The Star’s Editorial Board, backers recognize that “no one is going to come to our aid.”</p><p>All well and good. In its current form, however, the plan could fall into one of the traps that has bedeviled not only poor communities, but poor countries: a palpable suspicion of outside capital.</p><p>Supporters say investment should be treated less favorably if the resulting businesses are owned by those located outside the special district the plan would create.</p><p>Task Force member Linwood Tauheed, an economics professor at the University of Missouri-Kansas City, said a Starbucks outlet on Troost Avenue, for example, would not pass muster.</p><p>That wouldn’t mean Starbucks or any other nationally known company couldn’t open outlets in the New Tools District. But those businesses would not be eligible for the plan’s special loans or “premium” development incentives.</p><p>The problem, Tauheed argues, is that outside ownership entails “leaks” that bleed capital from the community. A Starbucks would employ residents from the surrounding neighborhoods, but it would also draw its revenue from the same source — and then ship the profits to some other city. Therefore, a Starbucks on Troost would be a net negative.</p><p>Sorry, but this doesn’t pass muster either. The Starbucks would attract customers who might also patronize stores nearby. A cluster of such businesses — in a mall or a shopping district — affords convenience for customers and opportunity for retailers. </p><p> Mall owners seek this kind of synergy because they need a healthy mix of commercial offerings, no matter where the companies’ headquarters flags are planted. Even stores owned by outsiders add value. </p><p>The suspicion of “outside” capital is an old story in the inner city and it’s not hard to see why. During the Jim Crow era, Kansas City was one of the most segregated places in the country. Black residents couldn’t try on clothes in downtown department stores. They couldn’t eat at the lunch counters. About the only aspect of urban life not racially segregated was seating on streetcars.</p><p>Given that, suspicion toward “outsiders” is hardly unexpected, even if it’s often counterproductive. At its extreme, it can result in the sort of scene that played out in an inner-city church basement in 1995.</p><p>In July of that year, Walter Meiners, the owner of a grocery store at the Linwood Plaza shopping center, was led into a room described as “sweltering” by The Star. There, he was “berated” by a crowd of 300 in front of TV cameras and newspaper reporters.</p><p>Those attending complained that the Meiners organization operated clean, well-run stores in the suburbs, but they had allowed their East Side outlet to deteriorate. Meiners, who is white, had attended several meetings about the store with a small group of Baptist ministers. He thought this would be a similar gathering. Instead, he ended up at the podium.</p><p>He explained that employees were receiving extra training, and management was trying to work around the store’s design flaws, which included lighting too high to adequately illuminate the aisles. Also, an exterior vent was built near a dumpster, which pulled in odors.</p><p>Regardless of the details of the dispute, it highlighted the misgivings of many black residents toward white business owners. The ministers who organized the protest seemed unaware that they had damaged their community’s ability to attract fresh capital.</p><p>Many business people who saw that story — and it received prominent play — no doubt saw it as a reminder of the risks of operating in the inner city. Most people will go well out of their way to avoid the sort of media show trial to which Meiners was subjected.</p><p>Much in the New Tools initiative has merit, especially its emphasis on entrepreneurship. But the basic goal of a development plan must be to attract capital, and any plan with a subtle message of suspicion toward “outsiders” begins at a disadvantage. After all, maybe a lot of East Side residents wouldn’t mind having a Starbucks, or any other nationally known retail outlet, in their neighborhood.