Legislature seeks to lure aircraft plant to state

Monday, April 21, 2008

A deal cooking in the Missouri Legislature to give $880 million in state tax credits to a Canadian company that wants to build an aircraft assembly plant near Kansas City has Sen. Jason Crowell asking questions.

Crowell, R-Cape Girardeau, hasn't been shy about seeking help for businesses in the form of state tax breaks. He fought to win the sales tax exemption for electric purchases by manufacturing firms, an idea he pursued to aid Procter & Gamble to make sure it can stay competitive by staying in Cape Girardeau County.

But the latest measure is so big and there are so few details being offered to support the wisdom of providing the credits that Crowell last week sought to amend the bill to require the legislature to approve issuing the tax credits. The amendment failed on a 12-18 vote, but Crowell remains unconvinced that he's got the details he needs to support the bill.

In a nutshell, the state is trying to lure Bombardier Aerospace, a Montreal-based company, to Missouri to build its new 110-seat and 130-seat airliners. The company has been looking for a location for the plant and state Department of Economic Development officials are hoping that the company can be lured to vacant land near Kansas City International Airport.

The bill before lawmakers -- one version has already passed the Missouri House, the other is awaiting further debate in the state Senate -- authorizes $40 million in tax credits over 22 years for a "megaproject" that brings at least 1,000 jobs and $300 million in investment to the state.

"I am not saying they have to attach the deal to the bill, I am just saying let us sign off on the contract," Crowell said. "One of my concerns at this point is that nobody knows what the deal is."

And while economic development officials are promising 2,000 jobs, no one representing Bombardier is registered as a lobbyist to explain the deal to lawmakers. If the tax credits are authorized for the minimum requirements of the bill, Crowell noted, the state would be subsidizing each job at $40,000 a year. "I don't know that Missouri taxpayers would think that is a good deal," he said.

"I am not saying whether this is a good deal or a bad deal," he said. "I am saying I don't know what the deal is. That somehow comes across as being obstinate but I want to know what I am voting for."

The type of tax credits, Crowell notes, are different from every other type of economic development tax credit currently on the books. Other tax credits are transferrable, meaning they can be sold on the open market. That's the type of tax credit that will be used to redevelop Schultz School into low-income senior housing -- the developer will sell the credits and use the money to finance the project.

In the case of the "megaproject," the tax credits are refundable -- which means that for the years they are authorized, if the recipient owes less than $40 million in state taxes, a check will be written by the state of Missouri for the difference. The best-known example of a refundable tax credit is the federal Earned Income Credit designed to reward working people with low incomes and generally praised by conservatives and liberals alike as a strong anti-poverty tool.

But the magnitude of the project -- Crowell said that even under the rosiest scenarios, the state will be a net loser under the bill until 2016 -- makes the refunding method questionable, he said.

Another problem with the deal is that it is being sold as a catalyst to thousands of other "spin-off" jobs for subcontractors and suppliers. But Crowell said there's strong opposition to any provision requiring that those jobs be in Missouri rather than nearby Kansas, where right-to-work laws and no Kansas City earnings tax could be attractive.

Overall, Crowell also questions whether the state's economy wouldn't be healthier using the $40 million for other types of tax breaks. For example, he said, the state could almost eliminate the corporate franchise tax, the annual levy on corporate assets, for $40 million. "We should look strategically if more jobs would be added and we would be better off as a state if we got rid of the corporate franchise tax."

Crowell said he's not trying to kill the bill and is not filibustering its passage. "I don't know of anyone anywhere who would enter into a 22-year obligation if they didn't know what the terms are," he said.

* Sam's back: The Mediterranean on Broadway, Sam Alsmadi's reincarnation of the Lewis & Clark Cafe, could be open for lunch today, owner Sam Alsmadi told me Friday. He's expecting city inspectors at the 411 Broadway locaton first thing this morning for a final review and, if everything meets standards, his doors will open.

Alsmadi has a cooking class teaching Mediterranean cooking scheduled for tonight, so Tuesday would be the first time he's been open for dinner customers since closing the Lewis & Clark on Main Street in late February. At the time he closed, he anticipated it would be only a short week or two to reopen but various issues about converting the new space for use have delayed the process.

I stopped by Thursday and there are soft drinks in the cooler, tablecloths in place and inspectors were going over everything. The items left to finish were minor, Alsmadi said.

The next step, he said, will be to install a ventilation hood for a full-service kitchen that will offer a wider variety of the Mediterranean food that is the restaurant's trademark.

* Hypnosis and massage: Jana Boston, a certified massage and hypnosis therapist, said Friday she will be opening her new Boston Therapeutic this week. She said she was holding an open house Sunday but I couldn't make it because I was out of town.

So, starting today, she'll be offering relaxation massages as well as medical-therapy massages and hypnosis therapy from about 3:30 to 8 p.m. weekdays and 8 a.m. to 3 p.m. on Saturdays at her office at 615 Broadview St.

The massage therapies she will offer aid in recovery from accidents and strokes. They also promote relaxation. Boston, who previously had an office in Kirkwood, Mo., has been a therapist since 1998. She said she was looking to re-enter the business as her own boss and believes Cape Girardeau, with its large medical community, is a good place to try.

The hypnotherapy will help enhance sports performance, aid in weight loss, overcoming phobias and to stop smoking, among other goals, Boston said.

But don't expect that people who return from her treatments will turn into chickens when you snap your fingers. Stage hypnosis is dramatically different from what she offers, Boston said. Each client will undergo an interview to find out their goals. "Then you use the techniques and suggestions that are most beneficial to that person," she said.

* Day care closed: I did an interview with Denise Roop, director of the Wee Care Early Childhood Learning Center a couple of weeks ago and then inadvertently left it out of this column. The center is affiliated with the Bethel Assembly of God Church, 1855 Perryville Road, and has been offering day care for children from six weeks to pre-kindergarten for 30 years. They are dropping day care for infants and toddlers up to 3 years old. Cape Christian School at the same location is growing, she said, and though the decision was difficult, the limited space is forcing the decision. Most of the parents had already made other arrangements by the time we spoke.

From my news releases:

* Hendrickson Business Advisors LLC, marketing and management consultants in Cape Girardeau, is moving. The company owners, Jennifer and Rhett Hendrickson, have purchased a house at 1729 William St. and will convert it into office space. The projected opening of the new offices is in early May, the company said. The business had been operating out of the Hendrickson's home.

Rudi Keller is the business editor for the Southeast Missourian. Contact him at rkeller@semissourian.com or call 335-6611, extension 126.

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