With its new plant, the Star banishes a downtown business to Kansas.

Press Run 

With its new plant, the Star banishes a downtown business to Kansas.

On October 15, The Kansas City Star got to write about itself. The paper lauded its own plan to invest $199 million in new German presses and a signature downtown building enfolded in blue glass and aged copper.

"This project is great for the Star and will have a dramatic effect on the surrounding area," said Publisher Arthur S. Brisbane. He added that the company had explored sites in Lenexa, Olathe and Lee's Summit before choosing to build just north of the newspaper's headquarters at 18th and Grand. The company would seek $19 million in tax breaks and hoped to be finished with the project by February 2006.

Mayor Kay Barnes was quick to add the project to her great-things-are-happening-downtown litany. In a September 27 speech at the dedication of Kansas City Southern railroad's new headquarters, she said she wanted to see "more businesses such as Kansas City Southern, eager to stay or relocate downtown." Barnes tallied the successes -- the President Hotel renovation, the new downtown library, the Bartle Hall expansion and the proposed $300 million performing arts center, which she called "the linchpin of our greater Downtown's future." Barnes has an even longer list of all the downtown apartment and loft conversions in the works.

Barnes and other civic leaders have embraced the idea that getting more people to the area at more hours of the day will help downtown emerge from its coma. The Star even argued as much in the six-part series it ran in September and October, urging that the city pull together to save downtown and suggesting ways to do it.

But at a time when luring -- and retaining -- as many bodies as possible seems crucial to downtown's future, the Star's heralded expansion is forcing one business to move its 75 workers out of downtown and across the state line to Kansas.

For now, the employees of Individual Assurance Company commute to 16th and Oak every day. Sometimes they eat lunch at the Cigar Box on Grand. Taking their smoke breaks, they add a little street life to the northern edge of Barnes' so-called SoLo district. But theirs is one of twenty properties -- mostly dingy brick buildings and asphalt parking lots -- the Star is buying to clear the land for its expansion. So around the first of the year, Individual Assurance Company employees will head for Prairie Village.

"Really, really, we were an asset to that neighborhood," employee Glee Montgomery says of downtown. "You start kind of arranging your life around your job. Your bank, your drugstore ... I bought my house in consideration of where my job was."

Montgomery says about half of her compatriots are sorry to leave downtown, however lifeless it feels at times. But, she adds, she can't blame her superiors for taking a better deal in Kansas.

And Montgomery questions whether city boosters even made an effort to keep her company downtown. She says they're "arrogant to think that companies will stay downtown without persuasion and assistance."

Individual Assurance's departure from its sturdy, five-story tan-brick building is prompting one more skirmish in what Joe Driskill, economic development director for the State of Missouri, calls an "incentive war" between Kansas and Missouri. Kansas won by promising Individual Assurance about $1 million in perks. Though the package has yet to be finalized, Kansas has offered, among other types of help, training for the company's employees and tax credits equaling about one percent of the money the company plans to spend on a building for its new office. More than $100,000 comes in the form of state income-tax credits because the 75 jobs are new to Kansas.

That was an important consideration as Individual Assurance explored buildings and locations on both sides of the state line, says Charles Miller, an attorney who helped arranged the company's move to a newer, bigger building with floor-to-ceiling windows. (Company owner Robert Stroud declined to speak with the Pitch.)

Kansas City couldn't compete, because Missouri doesn't hand out the same kinds of incentives when a company simply relocates within the state.

That's why Kansas City's Economic Development Corporation, one of the agencies leading the charge for downtown revitalization, hardly bothered with Individual Assurance.

EDC officials met with Miller and company representatives to compare site choices, but it was a short conversation.

"Unless that business is increasing in size, the State of Missouri is not going to provide anything in the way of incentives," says Gary Sage, the EDC's senior vice president for business development. "From a policy standpoint, this is actually kind of goofy."

The incentives work the other way as well, Sage says. If a Prairie Village company were interested in moving downtown, Sage could tap Missouri's new-job tax credits and other tools to seal the deal.

But it seldom happens.

"It's probably a 10-to-1 ratio toward Johnson County [rather] than them coming here," Sage says.

In the mid-1990s, officials in Kansas City, Lee's Summit, Blue Springs and Independence leaned on Missouri to try to get the rules changed. Tired of losing businesses to Johnson County, they wanted a special package of incentives for cities along the state border. The proposal went nowhere. Legislators in the central parts of the state saw no need for programs just to benefit Kansas City, Sage says.

At about the same time, Driskill tried to coax Kansas Lieutenant Governor Gary Sherrer into a cease-fire for the Kansas City metro area. No go.

"We tried very hard several years ago to get an agreement together that would have stopped the kind of bidding war across the line," Driskill says. "It's an understatement to say the Kansas people were not interested. .... I just gave up."

Though Driskill has hopes that incoming Kansas Governor Kathleen Sebelius will see things differently, the prospects don't look good.

"It's not our objective to cross the line and steal all the companies in Missouri, despite what some might think," says Steve Kelly, director of the business development division of the Kansas Department of Commerce and Housing. "We don't recruit Missouri companies. We don't do any advertising. We don't make calls."

But Kelly answers the phone when it rings.

Kelly says he's heard the argument that the metro is a single entity and companies shouldn't be allowed to benefit from moving within its borders. He doesn't buy it. Individual Assurance's move means income and property taxes for Kansas. It also means 75 people having lunch and buying gas in Kansas. Employees such as Glee Montgomery, who arranged her life around her job, might end up moving to Kansas to be closer to the office.

The exodus of Individual Assurance doesn't hurt nearly as much as the recent move of Midland Loan Services and its 450 employees from downtown to Corporate Woods in Johnson County.

But Kansas City's economic development officials are losing a company they should have been able to keep. It was a company that wanted to stay downtown.

Montgomery says company owner Stroud was near tears at his departure from downtown. She says she took a final picture for him of the downtown skyline from the fifth floor. "He was just very moved that I would do that," Montgomery says.

The Star has dutifully reported its continued struggle to purchase the final two properties in the path of its presses, but the paper has failed to note Individual Assurance's move even in its business section. Montgomery says she is not surprised. "Would the Star really report that their project displaced a downtown company to Johnson County?"


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