‘I say let them leave:’ Kansas City rejects incentive deal labeled ‘systemic racism’
The City Council on Thursday rejected part of a proposed incentive deal criticized as an example of how systemic racism influences Kansas City’s economic development.
In a contentious meeting that centered largely on whether racial bias affects the city tax incentives, members voted 9-4 against part of a package designed to keep BlueScope Construction from fleeing its West Bottoms location for Kansas. The company was asking for free parking, a 13-year 75% property tax abatement and $5.6 million in Missouri state incentives to stay. City officials said the company had been offered $20 million by Kansas to leave.
BlueScope has already been receiving a discount on its parking and a 100% property tax abatement for nearly 20 years.
“If we have a company that’s threatening us to leave, or we’re going to lose their … tax dollars because we’re not giving them free money, I say let them leave,” said Councilman Brandon Ellington, 3rd District at-large.
The deal has been criticized for the sheer magnitude of incentives the company would receive over the 33 years and has ignited a discussion about the way the city diverts revenues from urban school districts to spur development south of the Missouri River but often spares majority-white districts in the Northland.
The district has vehemently opposed the deal. In a scathing letter to the City Council this week, Superintendent Mark Bedell said the deal was a result of “systemic racism.”
“Financial decisions can be moral ones and this request is a violent economic practice that would never be inflicted on the majority-white school districts in the Northland,” he said.
In a statement, BlueScope spokeswoman Jill Harmon said the company appreciated the council’s “careful consideration of the matter” and accepted the decision.
“We’ve heard the concerns from Kansas City Public Schools and Dr. Bedell’s comments,” Harmon said. “We welcome the opportunity to learn more to understand how we can participate further to assist.”
The company’s request of the City Council was to extend and sweeten a parking deal it struck with the city in 2001. The city has been giving the company a discount on employee parking in a nearby city-owned garage. The ordinance members voted down would have made its parking completely free, a benefit of $2.4 million over 10 years.
BlueScope was seeking its property tax abatement through the Planned Industrial Expansion Authority. Asked if it would still pursue that possibility, Harmon said the council’s decision was “just one step in an ongoing process.”
“We’ll continue our deliberation and due diligence in the coming weeks to find a solution prior to our lease’s expiration in 2022,” she said.
All told, the local incentives would have amounted to $8.4 million. Combined with the state incentives, BlueScope would have received $14 million to stay put and add 90 jobs over six years.
Officials have noted the deal is a financial loss for the city — but a smaller one than it would weather if the company uprooted and moved to Kansas.
The school district criticized the deal because it would abate property taxes, which fund schools, to keep the company and protect the city’s earnings taxes, its largest single revenue source. School officials argued the district would bear the brunt of the incentives.
“When will we stop selling out our kids?” said Councilwoman Melissa Robinson, 3rd District, a former school board president.
Most of the Northland council members and Councilwoman Katheryn Shields, 4th District at-large, supported the deal.
Councilwoman Heather Hall, 1st District, said she would support it rather than see the “goal posts moved” regarding what developments are acceptable.
Councilwoman Teresa Loar, 2nd District, said the council needed tax incentive reform “because this is coming down to something very, very ugly,” saying the issue had divided council members based on race and whether their district lies north or south of the river.
Loar, who is white, said she had been called a racist and bigot this week and criticized Bedell’s letter as a “cheap shot.” She listed a number of former black council members she has worked with and urged colleagues to ask them if she had done anything racist.
“We do not need to allow this to divide us like this, and the race-baiting that is going on out there has got to stop,” she said. “I know it’s trendy right now, and it’s fun and it’s easy to call us a racist, but by God, I’m not going to take it. I’m 66 years old. I have never been a racist, and I will not be called that anymore.”
Robinson, who is Black, replied that it’s “not trendy or cute or fun to be Black in America.”
“We’re tired,” she said.
“What is wrong with us getting up and saying that there is an issue with this and not being met with this level of fragility?”
Ellington, who is Black, said Bedell’s letter was not calling people racist, but rather, pointing out the way institutional racism affects schools.
“If we pass this … we are definitely codifying — we’re saying that we’re cool and we’re comfortable with this area receiving less money for their schools,” Ellington said.
The deal is also reminiscent of the economic development border war Kansas and Missouri officials claimed to have ceased.
The two states agreed last year to halt the practice of offering hefty incentives to poach companies and jobs from each other, but companies have continued to get state incentives despite the truce by saying they were grandfathered into the agreement. Kansas Commerce Secretary David Toland said the state began talks with BlueScope long before the ceasefire.
Hall, Loar and Shields voted for the deal along with Councilman Dan Fowler. The rest of the council and Mayor Quinton Lucas voted no.
