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Nov
30
City can’t turn off the spigot of tax breaks
November 30, 2006 |
News broke this week that JE Dunn is threatening to walk away from its deal to build a new headquarters in the proposed East Village redevelopment in the eastern part of the Downtown Loop. The sticking point is money. Dunn wants the same generous deals that H&R Block and the Power & Light District received, where the city paid all expenses to demolish, clean up, and prepare the sites for construction.
The problem here is that the city has no policy for the use of tax breaks. Using TIF, 353, etc. to jump start redevelopment is OK, but once the engine is running you have to remove the jumper cables. With $500,000 condos and a dwindling supply of vacant buildings, that engine is definitely roaring now. But with a precedent established and no policy to fall back on, it’s become very difficult to say no.
H&R Block and P&L took fairly big gambles on a risky market, but three years later the Downtown market is much stronger. JE Dunn faces less risk and should be entitled less public subsidy.
- Biz Journal: Dunn looks to move HQ out of KC
- KC Star: Impass with KCMO has Dunn looking at other headquarters sites
Comments
7 Comments so far
One of the best paragraphs on economic development incentives I’ve ever read. I like the jumper cable analogy.
I have no doubts the City is trying to restructure a poorly conceived deal. They clearly did not do their homework and realize that State incentives require employment guarantees (which the City should have known).
What I don’t appreciate is the behavior that JE Dunn is displaying. They may be more “in the right” than the City, but Steve Dunn’s comments to the press about “making calls” is clearly a threat. Nobody likes to be threatened. Perhaps the City should start “making calls” and find a company who is willing to take Dunn’s place.
Good riddance. JE Dunn is a crappy company and the Dunn family, Bill Dunn in particular, are douchebags. Anyone remember the tirade at the mayor’s prayer breakfast a couple of years ago. The sooner they’re gone, the sooner they’ll fade into irrelevancy.
Alan you must be the real DB. Dunn is a top knotch company that is well respected throughout the country. They hire the best engineers, construction managers, estimators, etc. and pay them well and have those employees working downtown. You want to remove 900 top paying jobs and the intellectual people that go with the jobs? Man you are an idiot. Without the JE Dunns and KC Southerns and other downtown employers of young, college educated people that go to lunch, buy the condos, frequent the happy hours, attend the cultural events and generally spend their high salaries the success of the downtown revitilization is doomed.
The Dunn’s also personally spend millions on charity and give their time to multiple boards and charity orginizations. One member of the Dunn family has the positive impact equal to about 1 million Alan Birch’s.
I am not saying the Headquarter’s deal is a good thing for the city and I know that the Mayor’s prayer breakfast was a debacle but don’t slander the Dunn’s generally without using your brain first.
Birch, you sound pretty bitter not to mention ignorant. Did they fire you at some point in the past? Bill Dunn a douchebag? The guy is 80 something years old. Douchebag is a name reserved for the frat boy who pukes up tequila all over your rug at a party.
The fact of the matter is they could’ve walked away years ago from a dieing downtown, and they stayed, along with their employees when every other company was fleeing to the suburbs. The area is severely blighted and their desire to use TIF is perfectly reasonable and appropriate. This area is far more blighted than most other TIF districts in the area. It will be a huge blow to Kansas City if they leave.
It is not JE Dunn’s fault the city can’t even get their heads together and do proper due diligence on a project of this magnitude.
I agree TIF has been abused, but this is one area that will not go anywhere unless some incentives are offered.
On the other hand, I guess someone could reopen the Cherry Street Inn and let the junkies and horrors have the area for themselves.
Also Birch, the Dunn family are good people, even if you don’t agree with their religious views. They do a hell of lot for charity in this town. I’m not just talking about throwing money into charities. Their entire family gets hands-on with charitable organizations in town and elsewhere in the country.
It is not JE Dunn’s fault the city can’t even get their heads together and do proper due diligence on a project of this magnitude.
I would only disagree with Birch Knows Nothing in one respect. This is a great project for downtown. We need to retain office employment downtown even if it means giving J.E. Dunn some favorable incentives.
One other point. Their is always a lot of bitching on this site about the city council and others giving away contracts, public art inititivies, etc.. to out of towners. For the last five years they’ve been letting people from Dallas and Chicago build condos downtown at their leisure with outrageous incentive packages. Now it comes time for a local company to build (and retain employment) in an area that is actually blighted and the city is going to let them walk away over something like environmental remediation and employment gruarantees.
I would think they are in a position to threaten the city all they want.
ajh77,
You aren’t disagreeing with me really - I simply don’t know the details of the agreement so I can’t say that it is a great project for downtown yet - on the surface, I support it whole heartedly. I do know that I would give Dunn alot more than I would any out of towners. Your comments about the TIF, actual blighted areas and out of towners are spot on!
ajh77, it’s whore’s, not horror’s.