COLUMBIA — Over the past year or so, the city of Columbia has ventured into uncharted territory by offering economic incentives intended to spark development and make the community a more attractive choice for businesses, particularly those that bring the potential for high-tech jobs.
The most recent example was the Columbia City Council's approval on March 1 of a new policy that gives a break on electric costs to businesses that buy 10 or more megawatts of power from the city and who improve the city's public infrastructure. The city, under that policy, will reimburse these companies over time for up to half their "payments in lieu of taxes" to the electric utility. Those payments typically amount to about 7.5 percent of a large customer's total power cost.
In July, the council approved the use of tax-increment financing, or TIF, for the first time to facilitate two downtown development projects, a renovation of the Tiger Hotel and a proposed mixed-use building at Tenth and Locust streets. Trittenbach Development, the developers for the Tenth and Locust project, later withdrew their request for tax-increment financing.
The city also was the first in the state to establish a state-certified shovel-ready industrial site. Ewing Industrial Park in northeast Columbia is targeted as the possible site for a new data center, which would be eligible for the electric utility incentive.
Candidates for mayor and two seats on the council have different thoughts on the definitions and the use of incentives to attract industry and create jobs. Here's a look at what they had to say in a series of video interviews with the Missourian. The videos are available via the Missourian's online voters guide.
Sid Sullivan: Sullivan said he's "not a strong fan of incentives" and wants to focus on maintaining industries already in Columbia and on marketing the city to retirees.
"I have advocated taking a look at the changing demographics of the retirement population ... You’re not bringing in jobs, you’re actually bringing in people with incomes of say $40,000 and less, and (retirees) would have services they would want."
Jerry Wade: As the Fourth Ward councilman, Wade voted to approve tax-increment financing for the downtown projects in July. He also voted for the electrical policy incentive. He said there are other forms of incentives the city should promote.
"(Incentives) can include worker training and technical training to make sure the company has the best possible work force. They include infrastructure to make sure the company has the facilities and public service to effectively operate."
Paul Love: Love doesn't support straight cash incentives, but he does support selling electricity to large utility customers at the price Columbia buys it off the grid. He said public safety can also be an effective incentive.
"One of the things you can offer to business in a high-tech industry are areas, business parks, that have a guaranteed (police) patrol rate."
Bob McDavid: McDavid said that it's important for the city to grow its tax base and boost economic activity. He said tax-increment financing is most appropriate when it's used to promote development in blighted areas.
"When appropriate it's important to offer some incentives to companies."
Sean O’Day: O'Day, too, thinks it's appropriate that the city use incentives such as the electric policy.
"I think there are many tools we can use, and I don’t necessarily think it’s out of line for them to be used."
Sal Nuccio declined to participate in the Missourian's video interviews.
Tracy Greever-Rice: Greever-Rice said economic incentives can be an effective means of attracting businesses to Columbia and keeping existing businesses here.
"It’s not whether or not incentives are available or that we use them, it’s that we’re careful and thoughtful in the process we use when we decide how to use them."
Sarah Read: Read said that she supports Regional Economic Development, Inc.'s, work to secure shovel-ready sites and that incentives should be offered to "catalytic" projects.
"The incentives, I think, need to be uniquely tailored to the project, and they should be offered for projects that help benefit our community and develop it in the ways that are consistent with community norms and values."
Rick Buford: Buford said economic incentives are important if Columbia is going to compete effectively with cities such as Kansas City, St. Louis, Springfield, Jefferson City and Kirksville.
"We’re going to have to offer some sort of incentive for people to bring those jobs to Columbia."
Daryl Dudley: Dudley praised the power incentives as a means of luring large businesses but said Columbia needs to do more for small businesses. The current council, he said, has not been as proactive as it needs to be in attracting new companies and creating shovel-ready sites.
"We need to have the community and the City Council not be a blockade to new (businesses) coming in."
Karl Skala: The incumbent Third Ward councilman voted to approve the TIF agreement for the Tiger Hotel, saying it made sense because of the historical character of the property. He is generally skeptical of tax-increment financing, though. He also voted to approve the electricity incentive.
Skala said incentives must be "measured and targeted," and he prefers investing money in efforts designed to create offshoots of businesses already here. He cited a local food initiative that would link farmers to distributors and restaurateurs as an example. He also would be hesitant to "roll the dice" and provide too many incentives in an attempt to "land the big one."
"We’ll wind up paying a lot of money to become a company town, and I don’t think that’s what a lot of people really want. I think we would be much better off to invest our dollars in business incubators and those kinds of things."
Gary Kespohl: Kespohl said he supported the council's vote in favor of the electric incentive because it "doesn't cost the city anything" and because the city will inherit infrastructure improvements that are paid for by businesses coming in.
"I've always been of the opinion that you've got to spend money to make money, and that's exactly what the city's done. That's a great, great incentive for that particular industry. I think there should be some incentives in taxes and water rates and those kind of things to draw people here. We've gotta get jobs."