When Kansas City lost its bid to land a massive Urban Outfitters distribution center this summer, Mayor Quinton Lucas wrote to city staff, congratulating the negotiating team for holding the line when negotiating incentives with the company. The mayor said the Port Authority of Kansas City, which led those talks, was determined to “not give away the farm,” even with competition from other cities. What was not publicly known at that time were details of the various incentive packages offered on opposite sides of the state line. In Kansas City, Port KC offered about $125 million in total incentives to lure the $400 million project.
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For years, the watchdog group Good Jobs First has tracked government incentives, arguing that they are overused and often ineffective. Executive Director Greg LeRoy said the Urban Outfitters example — in which the company selected the lower offer — is just further evidence of that. “It’s a textbook example of our mantra that incentives don’t matter. They rarely determine where companies expand or relocate,” he said. “And there’s a very clear reason why: in the broad scheme of things they’re too small.” LeRoy said state and local taxes represent just a tiny portion of a big company’s cost structure, so incentives are just icing on the cake, not usually foundational to making a project work.
Source: KC Star Local News