New EEZ Board members discuss job creation, zone boundaries

Sunday, July 1, 2012 | 6:00 a.m. CDT; updated 11:27 a.m. CDT, Tuesday, July 3, 2012

COLUMBIA — Several months of work by Regional Economic Development Inc. culminated in February with the creation of an Enhanced Enterprise Zone Board by the Columbia City Council.

REDI, a private-public partnership, supported creation of an enterprise zone to attract businesses with tax incentives for job creation. But a declaration of "blight" is required by state law for an area to be eligible for the incentives, and public outcry about declaring more than half of Columbia blighted contributed to a recent decision by the City Council to press the reset button.

On May 21, council members authorized a new board with members named by Mayor Bob McDavid to begin the process anew. Two of the members appointed by the mayor — Jeremy Root and Anthony Stanton — were not on the previous board. Pat Lensmeyer, representing the county and taxing districts, is also a new addition.

At the new board's first three meetings, citizens again expressed concerns about blight, whether an enhanced enterprise zone would effectively create jobs and how to hold eligible businesses accountable for job creation.

The board will be responsible for making recommendations to the Columbia City Council on three topics:

  • The level of property tax abatement on new investment.
  • The boundaries of the zone or zones.
  • The types of businesses eligible for the incentives.

To receive the state tax credits, companies must also receive a local property tax break on expanded or new facilities. On June 13, the board voted to recommend setting any property tax abatement at the minimum level of 50 percent.

The board has yet to make any recommendations on the size or boundaries of the zone. Members have approved only one set of North American Industry Classification System codes that are used to identify the industry a business falls under.

The codes recommended by the board and approved by the council will determine which industries will be eligible for state tax credits and local property tax abatement within the zone. 

In a series of one-on-one interviews over the past month, members of the EEZ Board expressed their opinions on blight, job creation and other issues:

Louis Gatewood, who served on the previous EEZ board, has lived in Columbia for almost all of his 36 years and said many of his extended family members live here. He works for the Columbia Housing Authority on its after-school program. He also teaches for Columbia Public Schools and said he has been a student advocate for 12 years.

What do you think about a designation of blight leading to the use of eminent domain or contributing to lower property values?

"I’m not necessarily talking about blight or eminent domain – that’s not my scope."

Do you think the EEZ is an effective tool for job creation?

"I think there’s positives and negatives, I think it’s debatable on both sides. I think that there’s an opportunity to create jobs."

How large or small do you think the zone should be?

"You know, that’s what we’re working on, that’s a collaborative effort. We’re trying to get it to the smallest we can, of course, but that’s what the EEZ Board is working on right now."

Is there any particular issue you’re going to focus on as a member of the board?

"I think one of the issues we’re trying to work on is the level of incentives, the level of abatement that we offer to these organizations. One of the issues I really want to focus on is to make sure we bring companies that are bringing jobs and the level of abatement or incentives that they receive is based on the number of jobs they bring to Columbia. Make sure there’s a direct correlation with the number of jobs and the level of incentives."

What impact do you think it’s going to have on property tax revenues?

"If there’s no businesses here, no businesses moving to Columbia, the schools aren’t really getting anything. So, if we’re able to attract some major businesses and the taxes go to schools then that’s a good thing."

Do you think that there are any types of companies that should be excluded?

"Companies that are going to hurt our environment or pollute our air — I think those ones probably need to be excluded. I mean, we’ve got to put Columbia first. So anything that’s going to damage our community and what Columbians don’t want — I think we’ve got to take that into consideration."

Randy Morrow, vice president and chief operating officer of Boone Hospital Center, served on the previous board. He also serves as the secretary of REDI. Morrow has lived in Columbia for 42 years and graduated from MU with a degree in economics and finance. He started working at Boone Hospital Center in 1975.

What do you think about a designation of blight leading to the use of eminent domain or contributing to lower property values?

"I have enough faith in our City Council, this community, that that would not happen. Eminent domain should not even play a role. I think there are hopefully some stopgap measures that would never allow that to happen. I believe there are two things that influence property values — supply and demand and location. And if we are able to bring jobs to Columbia, more people will be able to be employed, have health insurance and by being able to do that, there should be even greater demand for housing which hopefully would make a person’s value in their property actually go up."

Do you think the EEZ is an effective tool for job creation?

"The enhanced enterprise zone is just really another tool. Columbia as a whole — we’ve really got a lot to offer. And it’s just another thing to try to attract businesses to Columbia. It's just one of the many tools to recruit and retain businesses. We need to give every family an opportunity to be able to make a decent living and the enhanced enterprise zone is just another, hopefully, a way that may happen. There’s no magic bullet. There’s no single thing, I don’t think, that sways a company. But this might be something that might lead them to say yes."

How large or small do you think the zone should be?

"I think we’re definitely going in the right direction. I think it should be as narrow a scope as possible and the only reason I say that is we need to really keep it where we would like to see additional growth of the business type of growth. I think we need to keep it as close to the office-industrial setting as we can."

Is there a particular issue you're going to focus on as a member of the board?

"I think it’s creating sustainable jobs. I think Anthony had a great thing — we don’t want to create two jobs and they’re gone next year, that’s not what I’m interested in at all. I want us to try to create sustainable jobs that will be here in the community for our citizens so that they can have reliable jobs that they’ll have for a number of years. So that’s my No. 1 goal — to create sustainable jobs in an environmentally friendly way. I think all of us are for the same thing — just how do we get there and how do we have some safeguards and I think all of that’s good; I think the public part of that’s good."

The board is also discussing what types of industries, as defined by NAICS codes, to allow. What’s your stance on that?

"There are items that I’ve mentioned before that I would prefer not to — favor’s probably not the correct word – but tobacco manufacturing. You know, in my business we’re trying to prevent health diseases. So I would hope we would not encourage that type of industry. If all the other members of the board think that is fine then I will go along with that but I will vote against that. So individual things, yes."

John Strotbeck was chair of the previous board and was re-elected as chair of the new board at its first meeting on June 1. Strotbeck said the mayor and REDI contacted him to be on the EEZ Board after the decision to form the board had been made.

He moved to Columbia in 2002 to become the manager at the Kraft Foods plant. The plant is Columbia’s largest industrial employer with nearly 600 employees. Strotbeck said he and his wife plan to eventually retire in Columbia.

What do you think about a designation of blight leading to the use of eminent domain or contributing to lower property values?

"I've heard two different sides to the story. One is that there's no evidence that that is going to occur but I also understand the concern of citizens who could have a home in the EEZ zone. There's certainly an argument on both sides, and there's certainly some merit and there's certainly probably some overreaction to it, but I'm just not an expert on that. I'm just trying to do a job that City Council and the mayor have given us to do. They're the ones that need to certainly research that issue."

Do you think the EEZ is an effective tool for job creation?

"I do. And I not only see it as good for job creation I also see it as good for sustaining the current jobs that we have. And let me explain that a little bit. As a factory, any time you can bring new business in that also makes the existing business you have much more sustainable. You're able to take fixed costs and things like that and spread it over more business. So it's not only just creating new jobs, it's the reliability or the ability to keep existing jobs that I think will benefit from this."

How large or small do you think the zone should be?

"We're trying to take into consideration including areas that are zoned for business, to include those kinds of areas in the EEZ but also trying to take into account the homes that could be included and trying to minimize the impact of that. And that's what the previous board was doing. I'm sure that this board will get there as well. I think we're very interested in trying to minimize the impact to the citizens as best we can."

What do you hope to accomplish as a member of this board?

"Our scope of work is in three areas — we're an advisory board, we have no decision-making authority. So I think sometimes that gets lost in the shuffle with a lot of the public comment. We'll make a proposal to City Council and to the mayor and that's the scope of our work."

When you were first appointed to the board, were you surprised at the citizen concern over the establishment of an EEZ and the blight designation?

"I don't know if surprised is the right word, but I've learned a lot as I went through the process and I can certainly understand the concerns that these citizens have. I would say those are the things that mayor and the City Council need to take into account as they try to weigh the pros and cons to what the EEZ is going to provide to our community."

James Whitt replaced Jonathan Sessions as the representative for the Columbia Board of Education. Whitt attended one meeting of the first board before it was dissolved. 

Whitt has been on the School Board since 2009 and has lived in Columbia for 12 years. A retired General Electric executive, he founded a nonprofit called cPhase Sports Association, which teaches academic and athletic values through sports.

What do you think about a designation of blight leading to the use of eminent domain or contributing to lower property values?

"The blight issue for me is a separate issue (from eminent domain) because that’s an issue that people within the community feel could impact property values. So if your property is within the EEZ zone and you live there, you certainly don’t want your property to be impacted by that and so that’s a concern and those are the kind of answers that people want to hear from the council, they want to hear from the advisory board and how we’re going to handle that to make sure property values aren’t impacted. Those are valid concerns."

Do you think the EEZ is an effective tool for job creation?

"In the proper form, there are opportunities for the EEZ to bring additional manufacturing-type jobs into the city. Columbia has a low unemployment so there’s a scenario that could say, well, do we really need it because we’ve got low unemployment. But we’ve got companies that are here that have plants overseas — they could relocate to different areas. I’m sure that we’d like to keep the manufacturing base that we have and grow it."

How large or small do you think the zone should be?

"I would think that — my personal opinion — as small as possible in areas that would have a significant opportunity to bring additional businesses into the community. Probably that would be my opinion."

What do you hope to accomplish on the board?

"I represent the School Board, so obviously the tax abatement is an important issue for us. The community has to have a say-so in whether the EEZ is good for Columbia, whether this is the kind of thing that will have a positive impact on Columbia. The purpose of the EEZ is to bring manufacturing jobs into the city and hopefully those manufacturing jobs will hire people from our community and if that’s the case down the road, if we get more hiring, then that increases the number of taxpayers that we have in the community. And you know, more taxpayers, you know, bigger impact it has on Columbia Public Schools, and that’s a positive impact."

So while you’re concerned about the tax abatement issue you also think that the jobs — bringing jobs — will also help in terms of tax revenues?

"Good high-paying jobs always help. Any city would love to have good, high-paying jobs. In many ways companies really have an advantage nowadays because companies can relocate plants and things like that. So communities are really at somewhat of a disadvantage and the only way to compete for some of these manufacturers is through tax abatements...

"So now you got a big balancing act so now you’ve got to make decisions, which are tough decisions, they’re not easy decisions to make and you really have to be respectful of the people that live in your community and the impact it has on them. That’s why we need to have an open and honest discussion about what impact this EEZ has. The downside is — we can say, ‘It’s not good for our community,’ and companies could start moving out; we don’t get the companies that could possible relocate here."

Anthony Stanton, vice-chair of the new board, has lived in Columbia for 15 years and said his family home is located in the First Ward. He took courses in computer information systems at Columbia College and also attended MU as a civil engineering student. He now works in construction. He describes himself as a "computer nerd turned construction contractor."

He said he got involved with city government after he started the Minority Contractors Alliance in Columbia and was appointed to the Affordable Housing Committee. Stanton also worked as a heavy highway instructor for Columbia Builds Youth, a division of Job Point, and has recently worked for APAC-Missouri.

What do you think about a designation of blight leading to the use of eminent domain or contributing to lower property values?

The city administration "used reconstruction or urban renewal back in the '50s and '60s in kind of the same way that they’re trying to use blight and EEZ language that they’re using now. That’s what people are scared about — that they’ll use the EEZ, they’ll use this blighted determination in the name of good to push a hidden agenda for a few. My ears are always open, listening for those keywords and if I hear the wrong thing or I see the wrong intentions — I’m right on it. Let’s make sure it stays honest and that there’s no backdoor intent."

Do you think the EEZ is an effective tool for job creation?

"At this time I do. There could be some tweaks. My belief is, OK, we have to start somewhere. If the EEZ is not the solution, we’re not going to find the solution by talking about it’s not a solution. We've got to make a step forward in some direction. You know, can’t get somewhere without that first step. I feel like the EEZ is a first step – it might not be the right step, I don’t know. I feel almost like we’re running an experiment. I don’t know what the outcome is... The EEZ is only one tool in the tool belt of economic tools the city and the county need to use to create jobs."

How large or small do you think the zone should be?

"I feel that the zones need to be as big as the most qualified areas can be. So there’s a criteria for EEZ — we look at everything — wherever that fits. And I know that central city has been taken out and I think that’s a good idea because I feel like once we give this EEZ a try on the outside we can fine-tune a way to do the same thing in central city. So, I’m almost kind of embarrassed to say — let’s look outside, let’s try it somewhere else first, make some mistakes out here, learn from them and then apply that to central city."

What do you hope to accomplish as a member of the board? What’s the primary issue that you’re concerned about?

"Achieve the publicly stated intent of the board or of the EEZ. The mayor said he wants to create jobs and he wants to shrink the gap between the haves and have nots and that this is a tool that he wants to use to do that. I want to see that happen. Do not deviate from what you publicly told us the intention is."

On working with the opposition

"I want to make sure that we’re paying attention to the opposition because your biggest asset is your critics. I want to be devil’s advocate and look at why people have a resistance to what we’re doing and when I find out why, then that opens the door of how to fix it. A lot of people, they’re just opposition, and it’s got to be a conflict thing. There’s no need for a conflict. That’s why I’m really looking at this process really scientifically — trying not to have emotion in it. I have a stake socially, culturally, but I’m trying to look at this really scientifically and make a decision as if I were making a business decision." 

Role on the board

"My job is to achieve the goals set for the board, present recommendations to the city, let the City Council take this information — and I intend to give them the best report possible — and leave it in the hands of our leadership that they make the best decisions possible based on the information and that’s when my eyes will really perk up. Once you’ve got this information I’m really watching you. I’m really watching the mayor; I’m really watching the City Council and my purpose is intent. Is it their intent to do what we recommend or were they using this to push some other agenda? I’ll be right there, every step, to make sure the intent is good and if it’s not, I’ll be one of those busting up the EEZ meeting, part of the opposition. Hopefully the EEZ will be a solution. I feel from a business perspective it can be."

Jeremy Root participated in Citizens InVolved and InVested in Columbia, or CiViC, but said he expects his role will change because of his appointment to the EEZ Board. He said areas designated as blighted on the original map caught his attention, and he contacted the council members about the process used. Root said he was surprised to be named to the new board. 

Root and his wife, who was born in Columbia, moved to Columbia in 2006. He is a partner at the law firm of Stinson Morrison Hecker and said his firm has represented clients on tax credit issues.

What do you think about a designation of blight leading to the use of eminent domain or contributing to lower property values?

 "I don’t personally believe that this blight declaration is likely to lead to exercise of eminent domain over property within the zone. But my property is not within the zone, and I do think that there is some increase in the risk of eminent domain just because it is one of many steps that would need to be taken. I was always more concerned with the impact on property values. If the information (about blight) enters that transaction, I can’t imagine that it’s going to have a positive effect on price and so I think that those concerns are real."

Do you think the EEZ is an effective tool for job creation?

"I am not convinced that it is. I think it has the ability to help encourage businesses to come to Columbia. Whether it’s necessary to achieve that end, I don’t know. If we’re going to use this tool to try and solve poverty-related problems, we have to build into the tool some avenue to solve those problems. It is not a poverty reduction tool. They’re designed, if anything, to attract businesses to Missouri. And that’s a laudable goal but that in itself for Columbia, I think, is insufficient. The problems that are being put forward in Columbia that need to be solved are related to poverty we have to make sure the tools we are using are built to try and solve those problems. I hope if we go forward with an EEZ, that it will be built that way."

How large or small do you think the zone should be?

"I don’t have a preconceived idea of how large or small the zone should be. I think the zone should be as closely targeted to existing and potential manufacturing sites as is possible."

What do you hope to accomplish as a member of this board?

"I want the board to make the best recommendation it can to the council about whether to have an enhanced enterprise zone in Columbia, and I think that the decision needs to be made based on evidence and a rigorous examination of the data that we’re using, as well as the neighborhoods and parts of the community that we’re including within the zone."

So you would like to see more neighborhood involvement?

"We need to gather input from neighborhoods that are going to be affected by this to hear what their concerns are. I think we also need to try, to the extent we can, to resolve those concerns within our recommendation to council. And one thing that I hope to also help the board do is figure out the extent to which we are able to create incentives within the program for employers to hire members of our community who are living in poverty, who are unemployed or underemployed so that we actually get the most benefit that we can for our community from this program.

Pat Lensmeyer, the Boone County collector since 1995, represents the taxing districts including Boone County, the public library, the Boone County Fire Protection District and others. Lensmeyer said she has lived in Columbia for about 20 years and graduated from Columbia College. 

What do you think about a designation of blight leading to the use of eminent domain or contributing to lower property values?

"I think it’s unfortunate that the state statute has tied economic development to terms like blight. I see that definition as being useful in a community where there is extreme poverty. It makes it really difficult to talk about economic development when you’ve got this other definition that’s tied so closely statutorily. Does it apply? I don’t know. I don’t know if anybody really knows."

Do you think the EEZ is an effective tool for job creation?

"I can’t say that I see it that way but I can’t say that I don’t see it that way. What I would like to see is the possible results from another community that would be comparable, and I don’t know where that is right now. I’m hoping somebody will be able to turn that over and point us in the direction of a community that would be comparable that we could look at."

How large or small do you think the zone should be?

"I think it should be as small as possible to meet the goals of what an EEZ is supposed to do. And I think an EEZ is supposed to provide an opportunity for businesses that would not otherwise come to a community to be able to open shop, hire employees and be good corporate citizens."

What do you hope to accomplish as a member of the board?

"I want to have an opportunity to really understand the citizens' concerns and how those can be beneficial in any decisions that are going to be made as far as the zone, as far as the accountability structure, those kinds of things. My goal, personally, is to make sure that the tax entities are held as harmless as I can do as their county collector."

Process of the advisory board

"I think the process that the advisory board is using now is sound. I think the members feel comfortable in asking questions. I think we all feel comfortable in thinking through the responsibilities. This is a big thing and I think we’re all taking it very seriously and I would be disappointed if there was anyone on the committee that came in with a predetermined idea of what we should be doing. I didn’t. I came in as open-minded as I could possibly be, understanding my tax collector responsibilities."

It was mentioned at one of the first meetings that there was a company coming to Columbia.

"It appeared to be a little rushed with the first advisory board, which may be why we’re not as rushed this time because there was a little bit of a public outcry… Wouldn’t it be sad if we lived in a community where there wasn’t a company wanting to come here anyway? I mean, we’re not in bad shape here. Our community continues to grow so I would think there’s always businesses on the peripheral looking at Columbia, Boone County. If the only pieces that are missing is some type of economic stimulus to help a company come in and get started or get going then I think we should be open to that, yes."

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