Overland Park ‘took a hit’: Tax incentive feud splits city council and roils business
The size and frequency of tax incentives that local governments have given out to new and expanding businesses have faced intensifying scrutiny across the Kansas City region. But a rookie Overland Park city councilman’s methods in questioning an incentive deal there have poisoned the political climate and alarmed the business community.
Newly minted Councilman Scott Hamblin had questions about an incentive package for local business Dimensional Innovations that his council colleagues approved in December before his January swearing-in. But a failed Feb. 3 motion to rescind the deal, and Hamblin’s PowerPoint presentation in favor of rescinding it — basically saying the city staff and city council had gotten it horribly wrong — ended up insulting his colleagues and sent a chilling anti-growth message to the business community, as Councilman Chris Newlin put it.
“I believe this sends a dangerous message to our local business community that will ultimately harm the residents of Overland Park,” Newlin said at the meeting.
Even setting aside the legal liability that rescinding the deal might have exposed the city to — the council voted 7-3 to keep the deal intact — several council members told The Star they took deep offense to Hamblin’s accusations of data blunders in the deal, contentions that city staff rebutted even before his presentation.
“I think it’s already spooked the business community,” Councilman Paul Lyons said.
Indeed, noting that the council had followed all laws and procedures in approving the incentives, the Overland Park Chamber of Commerce warned in a statement to The Star that, “The proposal to rescind an agreement after it had already been voted on communicated an act of bad faith, and though the motion was not successful, in the eyes of the business community Overland Park took a reputational hit with this exercise.”
Hamblin’s presentation, Lyons said, contained numerous inaccuracies and unfairly impugned city staff, city council members and the company, all of whom were involved in a legitimate and laid-out process. “I thought it was completely inappropriate and uncalled for. It was unnecessary. They knew (the motion to rescind the incentive deal) wasn’t going to pass.”
In particular, city staff have assured the council that, contrary to Hamblin’s assertions, the company’s job growth timeline (225 jobs phased in over 10 years) is in line with similar projects; the expansion’s estimated economic impact is in line with both the state Department of Labor and Department of Commerce; and the property targeted for expansion is not yet owned by the company. In addition, any company failure to fulfill the agreement will result in “claw backs” of the abated taxes.
Lyons and others maintain the broadside against the incentive package for Dimensional Innovations, a homegrown industrial and graphic design and content creation company, was orchestrated to further a planned mayoral campaign by Councilman Faris Farassati.
Farassati, who cheered on Hamblin’s presentation and continues to defend it, said his main political ambition is simply to fix problems in city government, including misguided tax giveaways.
But regardless of what one thinks of tax incentives, trying to rescind them once they’re approved is dicey. And stepping on your colleagues’ toes while attempting it is no way to win friends or influence people.
Nor is it any way to conduct business with businesspeople.
“Make no mistake about it,” Newlin told his colleagues, “reneging on an agreement such as (Dimensional Innovations’) sends a chilling message and endangers our future as a city.”
Told that some feel Hamblin’s presentation was unfair to the city staff and council, Farassati told The Star, “Unfairness is an irrelevant term here. We are talking about data. We are talking about math, essentially. We are not talking about emotions here. We are talking about solid facts.”
For his part, Hamblin is equally unbowed, saying he’s not sure what else could have been done to bring this situation to light — and that he still feels city staff’s numbers are wrong and his are unrefuted. He said he’s heard the business community is nervous about all this, but that, “I think to say that a legitimate business would leave Overland Park because we want to cut legitimate deals is kind of an absurd notion.”
Yet, he mischaracterizes the business community’s angst. It’s not over legitimate or even hard-nosed deals — it’s whether the council will later try to back out of them.
Regardless, Mayor Carl Gerlach was clearly offended by Hamblin’s presentation and the questions it raised about the city, which he said is built on the four-legged stool of citizens, business, schools and government.
“We have worked together among all four of those and, I think, made a pretty good city — one that’s been rated nationally,” he told Hamblin.
Overland Park is a dynamic, growing city that attracts high-quality people and businesses, Lyons says. “These kinds of things can tend to bring that to a grinding halt.”
“These kinds of things” include the kind of factional politics that has made Washington, D.C. such a no-go zone for civility and progress.
“That’s the last thing we want to see,” Lyons says. “We’ve been lucky for the last three or four years — when you’ve seen all this happening at the state and the federal level, we haven’t experienced that problem. And all of a sudden it’s now affecting our local council. It’s unfortunate. I hope we can get past it.”
Whether they can will go a long way toward determining what kind of community Overland Park is going forward, Newlin argues.
“The question is whether we are going to continue down the path that has made us the greatest place to raise a family, best place to buy a house, best place to retire,” he warned his colleagues — and the citizens of Overland Park.
Those citizens would be wise to take notice. It’s their city, after all.