The incentive war between Kansas and Missouri -- Kansas is winning -- made it into the pages of The New York Times. Reporter and heir A.G. Sulzberger talks to the chief executive of AMC Entertainment, who sounds almost embarrassed by the fat offer to relocate the company's headquarters from Missouri to Kansas. "In all candor, it's unusual and a little disconcerting," Gerry Lopez, the executive, says. Lopez was photographed in his office, making the "What are you going to do?" gesture with his hands.
The takeaway from Sulzberger's piece is that Kansas and Missouri are playing a destructive game, and everyone knows it.
Self-interest rules the day. David Frantze, one of the city's most active development lawyers, says it's "horrible public policy" to subsidize companies that move from one side of the state line to the other. But as long as the programs exist, he says he's going to continue to try to "get the best deal" for his clients.
Headquarters poaching is nothing new. But the stakes went up in 2009, when Kansas passed a law that allows companies relocating to the state to retain 95 percent of their employees' payroll taxes. The program enabled Kansas to lure J.P. Morgan Retirement Plan Services, Hoefer Wysocki Architects and KeyBank Real Estate Capital from Missouri.
AMC has been offered more than $40 million to leave downtown Kansas City. Lopez indicated to Sulzberger that the gift package will be hard to ignore. But even he can see that what is good for AMC won't create wealth for the metropolitan area. "Will there be any net improvement to the region?" Lopez asked. "Probably not."
The candid discussion was brought down by John Vratil, a Kansas state senator who lives in Leawood. Vratil says the incentive war is "just an inherent aspect of the free market." Government subsidies are "free market"? Hmmm.
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