Burns & McDonnell CEO Greg Graves was the star of the Greater Kansas City Chamber of Commerce's 123rd Annual Dinner. On that night in 2010, Graves was introduced as the chamber's chairman for 2011.
The event, held inside the Hyatt Regency–Crown Center ballroom just before Thanksgiving, is the local business community's Super Bowl. It's a gathering of hundreds of businesspeople and politicians, all dressed to the nines, sipping cocktails and eating chicken dinners. Social hour gives way to drawn-out, congratulatory speeches by chamber elites.
But the 2010 affair was a little different. Then–Kansas City Mayor Mark Funkhouser skipped the event, citing his frequent criticisms of its host organization. (The next day, Funkhouser would blast the chamber for supporting business tax incentives that encourage companies to hopscotch the state line.) No one seemed to care about the mayor's absence.
As is customary, Graves took the podium to give his speech as incoming chamber chairman. Some of his remarks strayed from the usual upbeat tone of past chamber dinners.
Graves directed his ire at conservative interests, led by St. Louis billionaire Rex Sinquefield, that had spent nearly $1 million to convince voters to repeal Kansas City's one-cent earnings tax. The tax generates about $200 million each year for the city's general fund. City leaders said losing that money would lead to severe cuts in public safety and basic services. So Graves fired a shot at Sinquefield.
"We would like you to take your high school civics experiment and go home," Graves said, eliciting a roar from the crowd.
Burns & McDonnell backed up Graves' remarks with a $50,000 contribution to the campaign to keep the earnings tax. Kansas Citians overwhelmingly agreed, voting to keep the earnings tax by a 78-22 margin in the April 2011 election.
Three years after defending the earnings tax, Graves wants to use it to help pay for his engineering powerhouse's expansion in south Kansas City. Burns & McDonnell is seeking a tax-increment-financing package that would direct half of the earnings taxes generated from new Kansas City employees to the engineering firm for the next 23 years. All said, the incentive would redirect $41.9 million from the city's coffers to Burns & McDonnell to help pay for the company's $231 million proposed expansion project at 9400 Wornall.
For a company like Burns & McDonnell, which doesn't charge sales tax, TIF is a tool that largely redirects earnings taxes generated by the employees at the Beth Shalom expansion site to cut down on private development costs.
"Obviously, the earnings tax is vitally important to the city, not just for basic services but also to be able to use as a tool to help attract, retain and help companies that are here expand," says Mike Talboy, a former Missouri state representative who now works at Burns & McDonnell as director of government affairs. "And we will continue to pay the earnings tax that we currently pay and we will obviously pay on the new jobs that are created from the expansion."
In 2013, Burns & McDonnell paid $2.9 million in earnings taxes, along with another $300,000 from contract employees.
The new site would replace the sprawling, gaudy building previously owned by Beth Shalom, a Jewish congregation that moved to Overland Park in 2011.
On April 22, the Tax Increment Financing Commission approved the request for the earnings-tax redirection. The proposal now goes to the City Council, where it is certain to receive approval from elected officials who cheer — and benefit from — the company's presence.
Burns & McDonnell is a fast-growing company with 2,600 local employees, and it expects to almost double in size over the next five years. The firm is approaching $2 billion in annual revenue, owing to its engineering presence around the globe and in Kansas City, where it is doing extensive work on the city's $4 billion overhaul of the sewer system, among other projects. But Burns & McDonnell's influence isn't limited solely to the engineering world.
The firm is one of the leading financiers of local political campaigns, including funneling money to Kansas City Mayor Sly James and other members of the City Council, who ultimately decide whether Burns & McDonnell will get its tax incentives.