Missouri governor signs ‘Border War’ truce. But the deal is not done without Kansas.
Kansas and Missouri leaders have enticed the federal government into shipping hundreds of high-paying jobs from Washington to Kansas City through an unusual level of cooperation between the two states.
But now it’s time for the competition to begin.
The U.S. Department of Agriculture announced Thursday that it would be relocating two research agencies—and hundreds of jobs—to the Kansas City region. But the USDA didn’t specify which side of the state line will be the new home for the Economic Research Service and National Institute of Food and Agriculture.
“We have not determined which side of the river we’re going to be on,” Secretary of Agriculture Sonny Perdue told reporters Thursday. “The Kansas City metropolitan area submitted really as a region and they wanted to be counted that way and that’s what we’ve chosen. Obviously, different states will have different incentives in that way as well. We don’t know exactly whether it will be Missouri or Kansas at this point.”
Perdue said the USDA will save $20 million annually in rent and employment costs by moving about 550 research jobs to Kansas City. He also touted $26 million in unspecified incentives he said that state and local governments have offered to the USDA for the relocation.
Those incentives could determine which side of the border the jobs land, but Perdue’s been tight-lipped about what the cities and states have offered.
“It’s outrageous that the USDA would run an auction. This is the extreme version of privatized behavior by the federal government. Uncle Sam has no business running auctions, dangling jobs on state and local taxpayers,” he said.
LeRoy said the final competition the USDA is setting up between Kansas and Missouri is reminiscent of how corporations set municipalities against each other after a region has been selected.
“This is classic site location consultant chicanery...This is an ugly, extreme version of Uncle Sam imitating Jeff Bezos. Yuck. If I were a Missouri or Kansas taxpayer, I would never stand for this. And as a federal taxpayer I’m cross-eyed.”
Perdue said the USDA considers the incentives proprietary and won’t reveal them at this time. But local governments are free to disclose them if they choose. So far, however, the states and municipalities are keeping a tight lid on the packages they’ve offered.
The Kansas Department of Commerce confirmed it has offered an incentive package, but declined to share specific details.
In a written statement, Kansas Commerce Secretary David Toland said the agency is confident “numerous advantages will put Kansas over the top” in the selection process.
“Kansas is on the cutting edge in the bioscience and agriculture industries with a cluster of prominent industry leaders located within our state. When it comes to research, technology and innovation, Kansas is the clear choice,” Toland said. “We look forward to continuing our conversation with USDA representatives and showing them the many great advantages that come with having a location in Kansas.”
The Missouri Department of Economic Development and Missouri Gov. Mike Parson’s office also won’t say what incentives the state is offering.
“Many of the details in the USDA project are still under negotiation, so we are treating it as an active project,” said Steele Shippy, Parson’s spokesman. “When projects are still in active negotiations, we do not publicly disclose project details.”
Kansas City Mayor Sly James’ office also did not disclose whether the city had offered incentives to the USDA.
Dave Trabert, the president of the Kansas Policy Institute, a free market think tank, said he agrees with the USDA’s decision to move the jobs out of Washington but thinks the states should not be offering incentives to make that happen.
“This is one of the dumbest ideas I’ve ever heard coming out of government. Taking taxpayer money and giving it to another government. Are you kidding me?” Trabert said. “Perdue says this is going to save the feds a lot of money over time, so they should fund their own transition.”
Crosby Kemper III, executive director of the Kansas City Public Library and a frequent critic of the city’s approach to economic development, called the relocation of the jobs a “big net benefit to KC” and said the two states should work together to offer an incentives package “that is identical for all the taxing jurisdictions.”
To win the USDA jobs, the two states exhibited a rare level of cooperation and beat out 135 competing proposals to bring the agencies to the Kansas City metro. Policymakers from both states have been reluctant to diverge from their all-for-one messaging.
But the the old regional competitive tensions haven’t simply disappeared. Policymakers have been clear about their preferences for which side of the state line the jobs should go.
In a statement, Parson said that Missouri agriculture has “unrivaled diversity, access to cutting-edge research at our land grant universities, and a thriving agribusiness environment.”
The selection of Kansas City as the new home of the research agencies came the same week that Parson and Kelly both took significant steps intended to end the border war on economic development in which the two states sought to lure companies back and forth across the state line. Parson signed legislation on Tuesday; Kelly said Friday that she was preparing an executive order.
Kelly drew a distinction between the two states’ pursuit of the final landing spot for the USDA agencies and the usual border skirmishes, where private companies gain lucrative incentives while adding few, if any, new jobs to the local economy.
“I think that’s just different because [USDA is not] an established company in Kansas City, Missouri, that they’re trying to lure across the border,” she said to reporters. “This is completely new and different. And Missouri’s betting on that, too.”
After Rep. Emanuel Cleaver, D-Missouri, received word of the decision from a USDA deputy secretary Wednesday night, he said he immediately called Rep. Sharice Davids, the freshman Democrat who represents the adjacent Kansas district.
“I told her, ‘Either side that wins, both sides win,’” Cleaver said. “You look at Sprint, for example, I have a large number of constituents who work at Sprint in Johnson County, so I’m not going to be that disappointed (if the USDA picks Kansas).”
Still, that doesn’t mean the former Kansas City mayor wants to see those federal jobs in Davids’ district.
“She’s one of my favorite human beings on the planet. Nevertheless, I prefer that it be relocated to Kansas City, Missouri, and I’m going to work very hard to get that done.”
Cleaver said the Missouri side of the border has more buildings ready for federal workers to move into right away. Cleaver said teams from the federal government would be reviewing three sites in Missouri and two in Kansas.
Davids emphasized that the announcement is great for both states, but noted the quality of public schools in Kansas and said she’d be pointing that out the USDA.
“They can definitely look forward to hearing from me to let them know the benefits of having a facility on the Kansas side,” Davids said
Now that the USDA has picked the Kansas City region, responsibility falls to General Services Administration to find the building and sign the lease for the ERS and NIFA.
“It will be done fairly,” Perdue said. “They will probably have a [request for] proposal out on the street some time around the 1st of July.”
The GSA, which handles leasing on behalf of the federal government, operates on a general mandate to find the best value for taxpayers. That may put pricing pressure on building owners vying to land the USDA lease.
The USDA is looking for existing buildings with 120,000 square feet of available Class A, or top of the line, space to lease.
While the GSA will put out a proposal, multiple sources told The Star that six areas in the region got initial attention from the USDA. Those are:
- The Sprint Campus in Overland Park
- The Renner Ridge Corporate Center
- Sublease space available at Shook, Hardy & Bacon’s headquarters near Crown Center
- Crown Center
- A Quality Hill office building at 8th Street and Pennsylvania Avenue
- City Center Square in downtown Kansas City
“They (GSA) will then ascertain different value levels of those proposals and make the best choice for the venue we need to be in,” Perdue said.
GSA’s leasing decisions have at times prompted controversy in the Kansas City region. The Environmental Protection Agency leased space in a downtown Kansas City, Kansas building until 2011, when GSA moved the agency and its 700 jobs to the former headquarters of Applebee’s International in Lenexa. KCK leaders objected to moving jobs out of the city’s urban core.
But downtown Kansas City interests also cheered GSA’s decision to move 1,000 federal employees from the Bannister Federal Complex to the Two Pershing Square building near Union Station in 2015.
Kansas City Councilwoman Jolie Justus, who is running for Kansas City mayor, said she hoped the jobs would land in downtown Kansas City.
“I think that having it in downtown Kansas City with transit lines running in and out and more housing opportunities available would be the preferred location,” she said, “and if there’s anything I can do to help with that, I’m going to chip in and help with that.”
But she drew a distinction between USDA’s relocation and previous iterations of the “Border War,” where the region was “using incentives to take Kansas jobs from Missouri and Missouri jobs from Kansas.”
“Now it’s a healthy competition to bring new jobs into the entire region,” Justus said. “At the end of the day, the entire region wins.”
Her opponent, Councilman Quinton Lucas, said he hoped the region would work together on the project to identify “the best package possible.”
“I think there’s a way to do that,” Lucas said. “I don’t think it has to be acrimonious.”
Sen. Pat Roberts, R-Kansas, the Senate Agriculture chairman, hasn’t been shy about sharing his preference that the jobs end up in Johnson County.
“We’d love to have it in Johnson County. That’s the best quality of living that I know of,” Roberts said the week before Kansas City was selected. “It’s like Eisenhower is president again.”