Overland Park approves tax break to keep marketing company in city

With a brief discussion of the benefits and over a few objections from residents, the Overland Park City Council approved a $25.6 million tax break to help Digital Evolution Group stay in the city.

Council members voted unanimously to grant the incentive that abates half of the property taxes on the marketing company’s home-to-be at 6601 College Blvd., as long as certain employment and salary requirements are met.

Three people objected during a public hearing, saying the city is already such an attractive place that businesses shouldn’t need further incentive to stay.

“We have the most fantastic city in the world already and they should be paying us to come here,” said Earl Long of Overland Park. Long pointed out that the tax break would amount to about $177,000 per job for the additional 145 jobs the company hopes to create.

Digital Evolution Group, a marketing company with 217 employees throughout Kansas City and other cities, has planned the move from its current office at 10801 Mastin Blvd. in Overland Park to accommodate its growth.

The company has 155 employees in Overland Park but plans to increase to 300 in the next five years. After a search for new locations, company officials decided to move into the College Boulevard site that was formerly the home of about 300 Black & Veatch employees, who had been relocated. The building is owned by Tower Properties.

Council member Fred Spears said he initially had problems with a plan that helps a business move from one Overland Park location to another. Tax incentives are more typically used to lure businesses from other cities.

However, he said the investment will yield a good return, according to a state analysis. “When we keep these jobs in Overland Park, we do reap a benefit,” he said.

Council member Terry Goodman also gave his support.

“I think business retention is equally important to business attraction,” he said. “They do have options and those options can take them out of our city.”

Beth Johnson, vice president of economic development with the Overland Park Chamber of Commerce’s Economic Development Council, said incentives are necessary as the city competes with other places.

“(Digital Evolution) is a home-grown company, locally based, that loves our area, loves Overland Park,” she said. “But you know what? That’s not always enough.” The abatement will help the growing company pay the higher lease rates in the redeveloped building, she said.

The city has been told that the company’s move depends on the investment of public money. But there were several provisions in the agreement designed to protect the city in case Digital Evolution’s growth falls short.

The company must report its employment and salaries to the city each year, for instance. If the employment level is not sustained at 300 full-timers by the end of five years, the abatement drops to 40 percent and if it drops below 155 employees, the abatement drops to 25 percent. Average yearly salary also has to be maintained at $75,670 during the 10-year period. If it drops below $70,000, the abatement becomes 25 percent.

During discussion Monday, the council referred to a cost-benefit analysis done by the Kansas Department of Commerce. According to that report, the company’s move would create 384 direct and indirect jobs over 10 years and would give $5.51 in benefit for every $1 invested.

This story was originally published April 20, 2017 at 11:38 AM with the headline "Overland Park approves tax break to keep marketing company in city."