BlueScope Companies request for abatement extension in Kansas City, June 25, 2020
Updated: Jun 29, 2020
BlueScope Companies, an Australian-based, billion dollar corporation, has been receiving an abatement on their property in the West Bottoms for 20 years. Now that the deal is about to run out, they've asked for 13 years more, which will have a larger negative impact on Public Schools than if they were to leave and go to Kansas (as they were threatening to do).
The first step for BlueScope to receive more incentives (on top of the 20 years of abatement they have already enjoyed), was for them to extend an agreement for a parking garage in the west bottoms, the Kemper garage.
Taxing jurisdiction representatives for Kansas City Public Schools knew that once the extension was granted, the project would then be heard at the Economic Development Corporation's PIEA where that agency had the power to grant the 13 year extension on the abatement.
The people who make up the PIEA board are not elected officials and do not answer to the public, yet they were waiting to hear what council would do before making their decision and it was stated by many that were working on the project that they would vote no if city council denied their extended lease.
This meant that the only way for the project to fail was for city council to deny the extension of the garage. Everyone on the council knew this but frequently this is how the abatement lawyers work.
Kansas City Public Schools, which are predominantly black schools, frequently argue against abatements that further detract from the public school budgets. Schools north of the river, are predominantly white and have a history of not suffering as much from the decreased funding that occurs as a result of these deals.
After testifying in committee against the deal (in great detail as the video below shows), the ordinance was voted out of committee without a recommendation which meant it had to move on to a full council discussion and vote.
Public Testimony also came from the Kansas City Public Library:
As did the Community Mental Health Fund taxing jurisdiction:
and the MORE2 Education Task force:
Council member Andrea Bough had reservations about the project and notes that even though it's about extending a deal on a parking garage as presented to the committee, it will receive incentives if it is approved:
Council Member Lee Barnes then made some comments and made sure to note that the committee doesn't approve every deal that comes along. We'll have to do a separate report to highlight his past votes for perspective so stay tuned:
We were shocked, saddened and dismayed by Council Member Loar's comments at this meeting. Not only does she acknowledge that the incentive package has a greater negative impact on schools south of the river, she says it's their job to "look out for the city" and then voted to approve it out of committee.
These comments sparked outrage in the communities south of the river and essentially highlighted the dividing line between the "have"s and "have not"s which we have been talking about for years.
The last person to testify in the committee meeting was Council Member Heather Hall who is sponsoring the bill. She also recognizes the disparity in how incentives affect the different school districts and laments about how her dad used to work at Butler Manufacturing and gives an emotional argument based on her fond childhood memories.
Council member Hall then uses Waddell and Reed and the extensive deal that was offered in her arguments, and said if we can do it for W&R then we should have no problem with doing this (or apparently anything else since Waddell and Reed is pretty much the biggest thing we've done so far).
What's intriguing about this argument is that she voted against Waddell and Reed due to transparency issues and the BlueScope project suffers even greater transparency issues. The whole deal is packaged to look like an extension on a parking garage lease, for example.
Suffice it to say there still wasn't enough committee support to put this out to the full council with a recommendation so it was set to go out without one for a debate on June 25, 2020.
Meanwhile, news of testimony was getting out to the public and more and more people were writing in to council members and the Mayor to vote no on the ordinance.
Several articles of news were published:
A Construction Company Asks Kansas City For Another $8M Or Says It’ll Move Out Of State - by Elle Moxley, June 17, 2020
Kansas City, Missouri, Schools Superintendent Blasts Incentive Deal For Construction Company As 'Systemically Racist' - by Lisa Rodriguez, June 24, 2020
Kansas City Council Rejects Incentives For A Company That Threatened To Move Across State Line - by Lynn Horsley, June 25, 2020
Kansas City Star:
Despite border war truce, KC offers millions to combat Kansas’ offer to poach company - by Allison Kite and Kevin Hardy, June 17, 2020
Nearly a year after border truce, Kansas City firm wants millions to hop state line - by Allison Kite and Kevin Hardy, June 17, 2020 with Steve Vockrodt contributing.
Why would KC Council even consider giving millions in tax subsidies during a pandemic? - by the Star's Editorial Board, June 22, 2020
‘This is systemic racism’: Kansas City school leader criticizes tax incentive plan - by Allison Kite, June 24, 2020
‘I say let them leave:’ Kansas City rejects incentive deal labeled ‘systemic racism’ - by Allison Kite, June 25, 2020
Kansas City Business Journal
Show-Me Institute Commentary:
About that Border War Truce... - by Patrick Tuohey on June 24, 2020
On the day of the vote, June 25, 2020, we start out with Council Member Barnes giving an overview (although he is aware that by now everyone knows about this ordinance) and adds as his own comment that he was hurt by Dr. Bedell's statement calling them "racists".
What is clear is that he didn't want to discuss how the policy is racist, rather decided to focus on how his feelings had been hurt.
Next up to speak was Council Member Brandon Ellington, who actually spoke twice during this debate.
First, in rebuttal to what Council Member Barnes had just said and to clarify Dr. Bedell's statements in the context of covert and overt racism. He also calls on the "At-Large" council members to consider the impact of the population living on the east side of Kansas City because they are also accountable to them. He closes by mentioning the numbers that were given by Kansas City Public Schools which he felt proved the irrational request from BlueScope.
The 2nd half of this clip features Council Member Ellington again debating against the extension of a tax abatement beyond it's original 20 years which defeats the purpose of incentives and again makes the argument that voting for a systemically racist package deal is wrong.
Council Member Dan Fowler, who represents the 2nd District along with Council Member Teresa Loar gives his remarks in support of extending incentives for another 13 years, even after listening to how insane that was from Council Member Ellington.
He laments on how mean it is to pick on Council Member Loar because she has always been a supporter of public schools, since she used to be a teacher. We're not sure he realizes that this might actually make her recent comments sound worse, not better, in light of this testimony.
Remember, earlier we remarked that the schools north of the river are primarily white students vs. south of the river where the population is primarily people of color.
Maybe he didn't actually watch her comments when she admitted this deal wouldn't have the same affect on her schools as the ones south of the river?
Standing up to speak against extending incentives to BlueScope, Council Member Melissa Robinson gives voice to Dr. Bedell's letter in a clear and reasonable way. She earnestly describes the struggle that our school districts and mental health fund are under and how they serve a demographic that is primarily people of color.
Council member Robinson speaks to the many other projects that have had an equally harmful impact in her district and people of color and makes an impassioned plea to the council to consider the many more years of harm they could cause by voting to extend the deal.
In the second half of this video, she stands up again to refute the remarks made by Council member Loar as she had taken the discussion for an ugly turn. Council member Loar's remarks are below but it is clear she was not actually listening to the truth of the problem but was instead feeling personally attacked. Her white fragility was showing and we commend Council member Robinson for calling her out and speaking the truth here by saying, "It's not trendy to be black in America."
Council member Teresa Loar, 2nd District At-Large, who's comments in the earlier committee meeting sparked outrage in many of the communities south of the river who serve people of color in larger quantities, outdid herself with her comments from the City Council meeting on June 25, 2020. She began her tirade by saying, under her breath, "Well I said I wasn't going to do this but..." and perhaps she should listen to herself more often?
Instead of trying to convince the council why they should support extending the incentives to BlueScope, she agreed the process was flawed and needed to be changed. Council member Loar then decried Dr. Bedell's letter as a "cheap shot", and started to complain about being called a "racist" and a "bigot". And then, to prove that she wasn't a racist, Council member Loar pulled out a written list and read off all of the names of black people that she knew and proceeded to say that the whole discussion on systemic racism in their policy was "race-baiting" which she then said was "trendy" and "fun". Many people later accused her of saying that the Black Lives Matter movement was trendy.
We think that an apology is in order to the entire black community for completely missing the point of the Black Lives Matter movement in her hurry to defend herself. We're also suggesting that Council member Loar check out the Racial Equity Institute and do herself a favor by researching "racial bias" and "systemic racism" before defending her honor any further.
Council member Eric Bunch weighed in to the discussion saying he would be voting no to extend the incentives to BlueScope because to do so would be to undermine the purpose of economic incentives and that he agreed that Kansas City's Economic Development has been skewed to benefit one population more than another.
We think Council member Bunch knows that it's unfair to punish future generations of children and encourage him to continue to do everything he can to fix this process moving forward.
Council member Katheryn Shields continued to agree that our incentives affect schools primarily south of the river and her mind, they were agreed to work downtown which is also south of the river so in her book, nothing is new and everything is working according to how it was created (she's been on council for so long she actually remembers). If we want to change it, we need to agree to change it.
The Council member waves her arms and says that unfortunately the deal before them that day was "poorly packaged", then voted yes after explaining that the city stood to gain (even though the school district would suffer) and that was good enough for her.
Someone should tell Council member Shields that change is coming whether she wants to support it or not. We feel that her decision and arguments were old-school and that new thought needs to go into handling economic development deals moving forward, starting with this one. Thank goodness it failed, despite her vote.
Council member Kevin O'Neill gave brief testimony against extending incentives to BlueScope saying that he had to look up the name of the company because he had never heard of them. He went on to say that he disagreed with extending them just because they threatened to move across the state line.
We're happy that he voted no on extending the deal.
Kansas City Missouri Mayor Quinton Lucas, who voted no to extending incentives to BlueScope, had several points to make including the history behind the fight against his 75% cap years ago and the fact that many said it would end development in Kansas City, which it didn't.
He reminded the council that everyone has a stake in the district they live in, but they also have, in the past, worked to help the city has a whole and should remember that.
Mayor Lucas also pointed out that normally corporations show "good corporate citizenship" by making a larger impact in their communities or building more into the "deal" to help benefit the school district and brings up Cerner as an example.
We're happy for the no vote and look forward to the Mayor's support on future legislation which will create an Economic Development policy that is more equitable for schools who have traditionally suffered the largest negative impact.
Council member Heather Hall continued to support BlueScope adding to her overall testimony from committee by refuting Council Member Kevin O'Neill who had just said he'd never heard of the Australian corporation.
There seems to be some awkwardness between them and we wondered if there were some other issues at play here. We knew she would be a "yes" vote since she sponsored the deal but again, we are glad that it was voted down by her colleagues.
Council member and Mayor Pro Tem Kevin McManus weighed in on the discussion to extend abatements to BlueScope and surprised TIF reformers with his "no" vote.
We have tried for many years to have a conversation with him about reform and look forward to hearing his thoughts on new policy making it's way to City Hall.
Council member Ryana Parks-Shaw remarks on her opposition to extending abatements to BlueScope which revolve around the policy it sets to see the abatement extended past the life of its term. She also speaks to the "many emails and calls" that she received which we attribute directly to the involved citizens who sought to share news of this ordinance far and wide.
Council member Parks-Shaw also recently introduced legislation with Council member Melissa Robinson, 3rd District, to prohibit economic development property tax abatements within the boundaries of the Kansas City, Missouri, Independence, Center, Hickman Mills, Grandview, Raytown, and Lee's Summit School Districts. The ordinance exempts severely economically distressed census tracts.
All in all the final vote was 9 against and 4 in favor so the ordinance fails. Read our official statement here.
On June 29, 2020 we received word from PIEA that the request for incentives had been withdrawn, so we are considering the matter closed.