New Sedgwick County commissioners could swing incentive votes the other way

07/12/2014 5:39 PM

08/08/2014 10:25 AM

Businesses could have a tougher time getting incentives from Sedgwick County if a new commission majority emerges after the general election in November.

That’s one of the major talking points in community conversations about the District 4 and District 5 commission races in the Republican primary.

Commissioners Karl Peterjohn and Richard Ranzau generally are the “no” votes when the five-member board splits votes, including on economic development tools such as tax abatements, tax-increment finance districts and forgivable loans. Their opposition, although at times passionate, has no weight because they aren’t in the majority.

That could change.

Last year, Peterjohn and Ranzau voted against taking no action on a tax-increment financing district in Derby. They couldn’t convince the majority to veto the district.

TIF districts use future taxes to help pay for improvements. Because such financing affects the county, it has a say.

Jim Howell, a state representative who is vying for the seat left open by outgoing District 5 Commissioner Jim Skelton, said he would have voted against the district.

Howell said the TIF district was “misuse of a government tool. This is picking and choosing winners in the worst way,” he said.

TIF districts are supposed to be for blighted areas, he said, “and this is a wheat field. Right across the street is a Lowe’s. Am I saying I’m against them all? I would be in favor of some as long as they fit the concept.”

Derby Mayor Dion Avello, Howell’s opponent in the Republican primary, said Derby made the right decision.

“The whole TIF district is being paid by Menards, and if they don’t come, it doesn’t happen,” Avello said.

The Derby TIF district is estimated to generate just more than $2.2 million in revenue over time for improvements at the southeast corner of K-15 and East Patriot Avenue. Menards has bought land in the district to build a home improvement store.

Money from the district will be used to improve an intersection that the Kansas Department of Transportation says has a higher-than-average rate of accidents. It also will help pay for drainage improvements and landscaping.

Voting history

Commissioners make decisions every week on how to spend taxpayer money, including on economic development.

Commissioners Tim Norton, Skelton and Dave Unruh, who often make up the majority vote, have a history of support for incentives that meet the county’s rules on return on investment. Peterjohn sometimes votes in favor and sometimes against. Ranzau, the District 4 incumbent, votes consistently against incentives. Unruh is unopposed for re-election.

Carolyn McGinn, a state senator who is opposing Ranzau in the Republican primary, has been critical of him, saying it’s easy to vote “no” but a challenge to come up with solutions when seeking to bring jobs to the community.

Ranzau said he has voted against all incentives to come before the commission. “I’ve not found a single one that seemed necessary,” he said. “It’s a bunch of smoke and mirrors. You can’t spend your way to prosperity. It doesn’t work.”

McGinn said she doesn’t like incentives, but “if we are going to be competitive with other cities in the U.S. and around the world, we need to be at the table.”

Ranzau is critical of McGinn as well, saying she would be another “rubber-stamp” vote in the majority.

The county needs to make sure companies that accept incentives such as forgivable loans make good on their promises and if not, use so-called “clawback” provisions, or guidelines about what will happen if the business doesn’t meet expectations, such as number of jobs, McGinn said.

Behind peers

Tim Chase, president of the Greater Wichita Economic Development Coalition, said the metropolitan area “competes against roughly 12,000 cities in the U.S. and across the globe. I think it’s vital that Sedgwick County and the city of Wichita are strong in their desire to be competitive.”

County commissioners voted 4-1 last year to give GWEDC $300,000 a year under a five-year agreement. Ranzau voted against the agreement.

The coalition works to maintain existing businesses and bring new companies to a nine-county area.

Chase said Wichita is “behind other peer cities in job creation” and noted that of 31,000 jobs lost, only 9,000 to 10,000 have been recovered.

“I think we’ve got some room for improvement,” he said.

Howell said he thinks the county is “too generous on the front end and not accountable on the back end” when agreeing to incentives.

Government doesn’t have a great history in creating private-sector jobs, he said.

“Just like Obamacare, the more the government meddles and tries to create a solution, the more damage they inflict,” he wrote in an answer to a voter’s guide question. “The best thing the (county) can do to attract job creators is to ensure a safe community filled with ready skilled (and) educated workers, affordable housing and expertly maintained infrastructure, all while keeping the burden of government as low as possible.”

Avello agreed that government doesn’t create jobs. Instead, he said, it “creates an atmosphere for jobs to come into the community.”

The county should work with partners to ensure adequate infrastructure such as water supply, quality streets and highways, he said. Solid infrastructure helps attract businesses, he added.

Ideally, he said, the free market would flourish without incentives.

“In the real world, however, incentives are sometimes necessary to stimulate growth,” Avello wrote in response to a voter’s guide question. “I support the use of incentives in these real-world situations and when they make sense, meaning when there is a guaranteed return on investment for taxpayers.”

He said he would like to see the county “pay more attention to businesses that we have here and not just concentrate on bringing in businesses from outside.”

Red tape

All of the candidates say they think the county should make it as easy as possible for businesses to succeed and give start-ups a break on red tape.

McGinn said she met with planning and zoning staff members about “agri-tourism” possibilities at her family’s farm in Sedgwick, including doing weddings and events centered on a vineyard there.

“For 45 minutes, they were telling me all the things that I had to do or why I couldn’t do it,” she said. “To me, I think it should be ‘How can we help you figure out how to start your business?’ ”

The county’s role in economic development, McGinn said, should be “providing a stable environment for businesses, and that includes consistency in regulations and limited regulations. It seems to me that we have a climate of telling people why they can’t have a business rather than asking them ‘How can we help you start a business?’ ”

On that, Ranzau agrees.

“You have to tear down all the bureaucracy and make it easy for someone to start their own business,” he said. “The average entrepreneur fails a couple times before they’re successful.”

He noted that “you have to get licenses to put stripes on parking lots now.”

The primary election is Aug. 5. The winner of the Republican primary in District 4, in northern Sedgwick County, will face Democrat Melody McCray-Miller. The winner of the Republican primary in District 5, in the southeast part of the county, will face Democrat Richard Young.

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