Leawood says no to Hy-Vee, but tax break mania still infects the area

05/28/2014 5:49 PM

06/03/2014 10:17 AM

Maybe in a few years Leawood will be wildly throwing public money at private companies to attract development, just like many other Kansas City area communities do these days.

But for now, the tony suburb is standing firm: Hy-Vee won’t get $1 million in tax revenue to help upgrade the inside of its grocery at 12200 State Line Road.

Good for Leawood and tough-minded City Administrator Scott Lambers, and bully for its City Council and Mayor Peggy Dunn.

Here’s one consequence for daring to say “no” to this kind of corporate welfare deal: Hy-Vee says it will close the grocery at 6 p.m. Sunday, though its pharmacy will continue operating there.

The decision to shutter the grocery has aggravated many Leawood residents as well as customers from nearby Kansas City neighborhoods.

Some blame the city for being so hard-headed. Others blame Hy-Vee for being so greedy.

Here’s the middle of that argument: Leawood made the best decision for taxpayers. They shouldn’t be put in the position of funneling money through a higher sales tax to the grocer for expenses it alone should bear, such as fixing up the inside of its building.

Leawood, by the way, was ready to look at using a higher sales tax for public amenity improvements at the shopping center, as is often done in community improvement districts around the metropolitan area.

It would be encouraging if Leawood’s principled stand was some kind of bellwether for the rest of the region, prodding officials to get stricter in forking over public funds to companies.

Alas, cities still too eagerly dole out millions in tax breaks to keep or woo businesses. For instance:

The Kansas City Council recently approved incentives worth several million dollars for DST Systems as it expands a data center and adds equipment — but no new jobs — in the Winchester Business Park.

The firm could have planned for and paid for the upgrades as a normal course of business. Instead, DST decided to get taxpayers to reduce the lug on the company. In the background was the implied threat that the data center operations might move to another city. Wonder how much that would have cost DST — even with assistance from the new community?

In Lee’s Summit, city officials are on the verge of approving a large public subsidy for yet another shopping center, this one called Summit Place near Interstate 470 and U.S. 50.

RED Development claims that the deal could die if it doesn’t get more than $18 million in incentives. And Lee’s Summit is no Leawood: Most of the money would go for site development, buildings and other costs normally picked up by the private sector. That’s a big departure from using funds for public amenities.

This would be the third RED-owned center near that intersection, all built with taxpayers’ help. Incredibly, the City Council wants to give even more money to the developer. How about putting a little bit more risk on RED rather than dipping into taxpayers’ pockets?

This list could go on and on, unfortunately.

A long time ago Kansas City crossed the threshold that Leawood is refusing to cross.

Tax dollars helped erect the private buildings in the Power & Light District in downtown. Tax revenues are used by businesses in some of the city’s community improvement districts to pay for all kinds of things — such as providing security and clearing snow — that private dollars once would have supported.

Come Sunday in Leawood, shoppers will have to go elsewhere to buy their groceries when Hy-Vee closes. It’s a small price for a mini-victory for taxpayers in a game they usually lose.

To reach Yael T. Abouhalkah, call 816-234-4887 or send email to abouhalkah@kcstar.com. Twitter: @YaelTAbouhalkah.

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