Union members take a stand against TIF in Lee’s Summit

More than 200 union carpenters showed up at Lee's Summit City Hall on a recent Tuesday. Some rode Harleys. Some brought children. Almost all of them wore T-shirts protesting a deal that the City Council was about to make.

The carpenters mustered in the parking lot, giving the council members who arrived for that night's meeting a glimpse of what lay ahead. No car hoods took a beating, though. As they entered the building, Dave Wilson, an organizer at the Carpenters' District Council of Kansas City & Vicinity, assured Councilman Allan Gray that peace would prevail. "We told our guys: best behavior," Wilson said.

The carpenters had come to express their displeasure with a loan proposal, of all things.

In 2006, the Lee's Summit City Council approved tax-increment financing for a shopping center called Summit Fair, near U.S. Highway 50. Organized labor usually supports such deals because development means work for union members.

This time, though, the union didn't think the developers were hiring enough of its members. The loan protest was really a hiring protest.

The carpenters are motivated by self-interest, to be sure. But the union's fight with Summit Fair owner RED Development goes beyond labor versus capital. In a way, the union is putting TIF on trial — and some of the evidence is pretty ugly.

The carpenters union, along with the Ironworkers Local 10, became angry when Summit Fair "went vertical."

RED Development chose contractors from outside the region to build significant portions of the mall. A contractor in California put up the steel. A Georgia company is performing the framing and drywall.

The unions complain that out-of-town contractors look attractive because they bring in workers who are willing to toil for less than prevailing wages. "The local workers are being left out in the cold," Wilson says.

RED officials, in turn, say the union shops' bids were simply too high.

The dispute played out in typical fashion. Ironworkers camped outside RED's office near the Plaza with a banner criticizing the contracting decisions. This we've seen.

The Summit Fair fight escalated when RED asked the city of Lee's Summit to provide an $8.8 million loan so that the company could pay off an existing bank loan.

The carpenters, hoping to take advantage of populist outrage, took to calling the loan a "bailout." Union officials even made a 10-minute film to illustrate the effects of RED's contracting practices. In one scene, an unemployed union carpenter, Mike Helms, moves forlornly about his garage. Helms tells the interviewer that it's where he goes to get out of his wife's way.

RED officials reject the notion that the loan is a bailout. Managing partner Dan Lowe told the council that the loan was "not a gift" but an advance of funds that the council promised when it approved the TIF plan. Without the injection of cash, Lowe said, construction would have to stop.

The carpenters argue that RED is using the city's creditworthiness to obtain a loan with a below-market interest rate. And in addition to making the point that area residents had been deprived of jobs, Joe Hudson, political director of the carpenters union, suggested to the council that RED had sought to opt out of the "risk" half of the risk-reward equation.

The council chambers looked like a basketball arena on a night when the fans wear shirts of a particular color (in this instance, white). When it was time for public testimony, a carpenter who lives in Lee's Summit approached the microphone. He was holding the hands of his young daughters. "These are the ones who are affected when I don't go to work," he said.

Besides the emotional appeals, there were discussions about the technical aspects of TIF, a scheme that allows developers to recover costs from the tax revenue generated by their projects. Councilman Gray asked for some clarification on the mechanics of the loan. David Frantze, a development lawyer with a city contract, responded with an answer so lengthy and opaque that you would've thought he was getting paid by the three-syllable word.

TIF is tricky, which is part of its genius. It's hard to be outraged by something that's semi-incomprehensible.

Take a comment that Lowe made. He told the council that as "stewards of public money," RED Development had to hire contractors who submitted the lowest bids.

It's true that TIF pays for the infrastructure — such as roads and sewers — that new developments need in order to function. TIF proponents, in fact, make a point of using the term "public infrastructure" in an effort to push back against the notion that it's a handout to developers. The argument: TIF pays for stuff that cities build anyway.

But if that is the case, how is RED being a public steward when it hires a cheapo company to drywall the future site of a Victoria's Secret? Those are not the public's frilly panties.

The contortions didn't end there.

The term "public-private partnership" kept coming up. At one point, Lee's Summit Mayor Karen Messerli said: "Whether you like or not, the city is a partner on Summit Fair."

But moments later, Messerli said the city couldn't instruct RED Development to hire local employers. "We have no control over that," she said.