The latest round in the metropolitan economic border war is going for short yardage, with an insurance marketing company receiving $5 million in incentives to skip just a mile from Kansas City to Leawood.
SelectQuote Senior Insurance Services at 9200 Ward Parkway is negotiating for space at 89th Street and State Line in Leawood to consolidate its local call center operations. The Ward Parkway office is about a mile from the planned new location.
Kansas economic development officials praised the announcement, but a local civic leader who is spearheading opposition criticized it as more of the same business poaching that's cost both states tens of millions of dollars in lost tax revenues without helping the overall metro economy.
"This is just a continuation of a policy that's damaging taxpayers who have to pay for those who aren't paying," said Bill Hall, president of the Hall Family Foundation.
"It's another example of companies that are moving to take advantage of this situation. Those of us who don't move are paying for those who do."
The deal also comes on the heels of a three-part series by The New York Times on incentive abuse nationwide. Kansas City's incestuous border war figured prominently in the paper's report, which concluded Tuesday.
Andrew Martin, director of finance for the local SelectQuote operations, said about 150 employees with an average salary of $55,000 will be consolidated at the new location when a lease is finalized.
The incentive agreement with Kansas calls for 290 full-time jobs to be eventually created within five years. The firm will invest about $12 million in its new facility.
"SelectQuote Senior is excited to be able to consolidate our 150 employees into a new facility in Kansas," Martin said. "The new location will more than double the space we currently occupy, and allow us to continue to maintain our present growth rate.
"In less than two years, we have grown from two employees to over 150, and we have no expectations of slowing down."
SelectQuote already has a call center for its Auto & Home Insurance Services at 8700 State Line Road in Leawood.
The two local operations expected to be consolidated into 32,000 square-feet at the new site are part of San Francisco-based SelectQuote Life, which represents insurance companies including Prudential, ING Financial and Genworth Financial.
Kansas economic development officials praised the SelectQuote decision.
"I'm pleased that Kansas can offer SelectQuote Senior a business environment that will enable it to bring 290 good jobs to the state over a five-year period," Kansas Commerce Secretary Pat George said in a statement.
"Having a respected company such as SelectQuote invest in our state is a great thing for Kansans as we continue to build a strong economic future."
The bulk of the Kansas incentive package for SelectQuote Senior is from the PEAK program, short for Promoting Employment Across Kansas. It allows employers bringing new jobs to the state to keep 95 percent of their employees' state income taxes for up to five to seven years.
Missouri has a similar incentive program called Missouri Quality Jobs.
Hall has become a student of the cross-border incentive dilemma. In April 2011, he wrote a letter to Govs. Sam Brownback of Kansas and Jay Nixon of Missouri that was signed by 17 top executives from throughout the metro calling for a ceasefire.
Since PEAK began in 2009, Hall estimated Kansas has used the incentive program to forgive $131 million in state income taxes for employees moving from Jackson County to the Kansas side of the metro.
At the same time, Missouri forgave about $60 million in income taxes to shift jobs from the Kansas side to Jackson County.
During that period, Hall estimated that Kansas has attracted 3,030 jobs from the Missouri side of the metro and Missouri has attracted 2,514 from Kansas, leaving Kansas with a 516-job net benefit.
For each of those net new jobs, Hall estimated Kansas had forgiven $370,000 in income taxes.
That's money that civic leaders believe is being drained from state budgets for education and other needs.
"The civic leadership continues to be extremely concerned about it and we've had further conversations with the states," Hall said.
"There has to be a significant will at the political level to understand this."
