REDI board votes to end effort for Columbia EEZs

Wednesday, December 12, 2012 | 2:57 p.m. CST; updated 8:37 p.m. CST, Wednesday, December 12, 2012

COLUMBIA — A Wednesday vote by the Regional Economic Development Inc. Board of Directors appears to spell the end of the effort to create an Enhanced Enterprise Zone in Columbia.

Citing concerns from the community, the REDI board voted Wednesday morning to ask the Columbia City Council to rescind the ordinance that created the Enhanced Enterprise Zone Advisory Board.

"This is the end of the EEZ," REDI member and former chairman Dave Griggs said. "The community has told us loud and clear."

REDI president Mike Brooks said he was disappointed by the failure of EEZs in Columbia. "We'd like to have that tool," he said.

The board was formed at the Feb. 6 council meeting but was disbanded at the council's May 7 meeting after opposition from local groups such as Citizens Involved and Invested in Columbia. A new board was established May 9 at a special meeting of council.

"The question was, how much political capital and good reputation are we willing to wage on this battle?" Griggs said.

Brooks decided to give up the effort after he attended a meeting with the Parkade Neighborhood Association and heard members voice opposition to the blight designation required for creating an EEZ.

Paul Love, president of the Parkade association, said it became clear at the meeting, which more than 100 people attended, that the association was intent on not being included in an EEZ.

“There was almost a 100 percent reaction from residents of the community that were not fond of it,” Love said. “I think that kind of surprised Mike.”

"The vast majority said 'We really applaud REDI's efforts; we just don't want our property declared blighted,'" Griggs said.

Since proposing an EEZ at the Jan. 17 City Council meeting, REDI has been bombarded by opposition from residents worried about a state requirement that the city place a “blight” tag on the zone and about the potential difference in tax revenue.

"The blight designation is the lightning rod," Griggs said. "I didn't anticipate that."

An EEZ allows a company to receive a 50 percent local tax abatement on any expansion project and to receive state tax credits if it invests at least $100,000 in the business and creates at least two jobs. The EEZ Advisory Board in Columbia made the recommendation to raise the job requirement from two to 10 to better address poverty in Columbia, according to the Missouri Department of Economic Development's website.

There are 124 EEZs in cities across the state.

REDI representatives have argued that an EEZ would make Columbia more competitive and allow it to attract more manufacturers.

REDI also was concerned with the EEZ Advisory Board's decision to limit the areas of the zones, Griggs said. "The areas of the city that would be included in the zone are so small at this point that it would not be valuable to the community," Griggs said.

Griggs said REDI would look for new incentive programs that would help small businesses.

"If we can find an alternative program that doesn't have the blight designation, we'll do that," Griggs said. "We're gonna go back to the drawing board and see what we can come up with."

Brooks said it would be difficult for REDI to find another incentive policy with the benefits of EEZs.

"EEZs would target small to mid-size projects," Brooks said. "It'll be hard for us to find other opportunities for those projects."

REDI Chairwoman Vicki Russell said the Parkade meeting was a great opportunity to try to get residents to view EEZs differently.

“By the end of the meeting, people got the message that it was REDI’s job to bring jobs to the community,” Russell said. “But they clearly didn’t want them to do that by blighting homes.”

Russell said Columbia has other incentive programs but that they target either small or large employers, not the mid-size businesses that can take advantage of EEZs.

“The middle tier is kind of the puzzler,” Russell said. “Columbia now doesn’t have a tool that almost every other community in Missouri has.”

“What that means is we’ll probably never hear from a company that falls into that category. If they hear we don’t have an EEZ, they might just scratch Columbia off the list.”

Jeremy Root, a local attorney and member of the EEZ Advisory Board, said community feedback was probably a deciding factor in REDI's decision.

"When we got that under way, the feedback was generally negative," Root said. "I think the community has been really engaged with this and expressed an issue with blight-based economic development, particularly when it's widespread like with an EEZ."

Third Ward Councilman Gary Kespohl said he has been conflicted about EEZs.

"I'm about getting jobs to people in Columbia who are wanting jobs, and I was hoping EEZs would help with that project," Kespohl said. He was apprehensive, however, about neighborhoods in his ward, such as Whitegate and Benton-Stephens, being designated as blighted.

"I was looking for a compromise on how we could do it without affecting neighborhoods," Kespohl said.

EEZ opponents also worried that the city would use blight designations to justify the use of eminent domain to acquire property then resell it for private redevelopment. The City Council in November voted to place on the April 2 ballot a charter amendment that would prevent that.

Supervising editor is Scott Swafford.

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