Loss of jobs to Kansas irks Kansas City's mayor

By MICHAEL MANSUR
The Kansas City Star

Mayor Mark Funkhouser railed Wednesday against Kansas poaching jobs from Kansas City, and he placed much of the blame on the Greater Kansas City Chamber of Commerce.

“It’s just nuts,” Funkhouser said.

The chamber fired back and said the mayor was blaming the wrong people. It really wants the same thing as Funkhouser: better Missouri incentives to counter Kansas.

Both sides agree the recent shuffling of businesses among metropolitan area cities does little to boost the area’s economy.

Two Kansas-side officials said Wednesday that competition for business would prove to be a good thing.

“Everybody puts their best foot forward,” said Ed Eilert, chairman-elect of the Johnson County Commission. “What happens happens.”

Funkhouser called a news conference Wednesday to say he was “infuriated” by the actions Monday night of the chamber’s board, which endorsed a Kansas program that the mayor said would enable that state to raid city jobs.

The program, known as PEAK (Promoting Employment Across Kansas), allows for greater incentives to be offered to companies relocating to Kansas.

As a result, Kansas City has lost thousands of jobs to Kansas, Funkhouser told reporters.

“This a program that is absolutely raiding jobs from Kansas City to no benefit to the region,” Funkhouser said.

If Kansas does not stop, he said, he would like to see Missouri officials offer incentives equal to those dangled by Kansas.

“We’ve asked the state of Missouri to help us in this border war,” Funkhouser said.

But the mayor acknowledged that politicians in Jefferson City may balk at boosting economic incentives.

Funkhouser again encouraged Kansas City business leaders to rise up to form their own Kansas City chamber, which he said might better represent the interests of the city in economic development and other business-related issues.

What Funkhouser did not tell reporters, said Pam Whiting, a chamber spokeswoman, was that the chamber board also urged Missouri to enhance its economic development incentives.

The chamber is taking numerous steps to promote Kansas City business interests, she said.

“We’re working very diligently on Kansas City, Missouri, issues,” Whiting said, “including bringing a disparate group of people together to engage in a campaign to retain the earnings tax.”

Was Funkhouser’s news conference helpful or hurtful to bringing the area together?

“I don’t know what response the mayor wanted,” Whiting said.

Funkhouser told reporters that he wanted Missouri to offer similar or more incentives, which might be the economic development equivalent of “nuclear deterrence,” Funkhouser said. That might stop the shuffling of companies within the area, which doesn’t add new jobs, he said.

The area trails others in adding new jobs, he added, and that may be due, in part, to the poaching.

Funkhouser cited a recent Federal Reserve study that found an area’s economic interests hinged on the viability of the core city — in this case, his city.

He said he understood that many Kansas residents and their leaders believed they would be ahead by looking first to their cities’ best interests, attracting as many companies as possible.

But, Funkhouser said, “Our fortunes are tied together, and that’s an empirical fact.”

Eilert cautioned, though, that restricting businesses’ movement in the area might result in losing them altogether.

Blake Schreck, president of the Lenexa Chamber of Commerce, noted that an “anti-poaching” agreement from 15 or more years ago existed.

But Kansas and Missouri are different states with varying political and business interests, Schreck said.

A city or the state of Kansas can’t ignore businesses looking to relocate. Often, they don’t know a business is in Missouri until after the courting begins, Schreck said.

A “perfect storm” of a poor economy, the existence of prime office space at the Sprint campus, and area politics has resulted recently in more companies moving to Kansas, Schreck said.

“The reality is, what’s wrong with a little competition?” he said.

For now, though, the economic drain on his city is tough to take, Funkhouser said.

It began, he said, when the city lost the Kansas City Wizards stadium, as well as a new Cerner Corp. campus, to Wyandotte County.

Since then, the Kansas City companies moving across the state line have included JPMorgan Retirement Plan Services (800 jobs), KeyBank Real Estate Capital (300 jobs), and Hoefer Wysocki Architects (65 jobs).

A fear is that AMC Entertainment, a downtown fixture since 1920, will soon move to Kansas with 400 jobs.

City officials have said that the state of Kansas reportedly is offering $50 million to lure the company.

Kansas City did hold onto the National Association of Insurance Commissioners and its 460 employees in October, but city leaders had to offer to reimburse 50 percent of the earnings taxes paid by its employees for 10 years.

Funkhouser said a city with a $1.3 billion budget can’t compete with a state that has a nearly $14 billion budget.

Kansas eventually will realize, Funkhouser predicted, that spending tens of millions of dollars on business incentives would be better invested in schools and infrastructure.

But until then, he wants the hurt from this economic drain on his city to stop.

“This is absolutely against the interests of Kansas City and it’s against the interests of the region,” he said.

To reach Michael Mansur, call 816-234-4433 or send e-mail to mmansur@kcstar.com.