Missouri

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Missouri Means Business

31 Aug, 2008

By: Greg Steinhoff

Nearly 40 years ago, Neil Armstrong took “one small step for man, one giant leap for mankind” on the moon.

 
While not quite as momentous, in 2008, Missouri took a huge step forward in terms of large scale economic development with the passage of House Bill 2393 by the Missouri General Assembly. The legislation authorized tax credits for mega-projects in enhanced enterprise zones in Missouri. It also allowed the state to offer an incentive package to an aircraft manufacturing company which gave serious consideration to investing $400 million in building a passenger jet assembly facility at the Kansas City International Airport.
 
Prospects of Major Investments
 
The company, Bombardier Aerospace, confirmed in 2008 that it was considering asite at KCI that, when at full capacity, would employ 2,100 workers and pay an average wage of $63,000. Bombardier, which also owns Learjet, would in turn invest a total of $3.2 billion in research, development and facilities for the anticipated project.
 
The proposed assembly plant would produce a new, fuel efficient, less costly, 110-plus seat commercial aircraft, making it the first new commercial aircraft assembly line in America since 1968, a year prior to Armstrong’s lunar stroll. The new jobs, coupled with the indirect job growth, could potentially mean a net increase of more than $200 million for Missouri’s hard-working taxpayers, keeping the state’s economy strong and its tax burden low, thereby luring even more jobs to the state.
 
But it was not to be.
 
On the eve of the Farnborough International Airshow in London, Bombardier announced its decision that the aircraft would be assembled near Montreal, where the company is based, rather than at Kansas City International Airport.
 
While disappointed that months of work, nearly daily conversations with Bombardier officials and $240 million worth of incentives failed to land the deal, Missouri's officials do not view the decision as a loss.
 
“Obviously I join members of the legislature in expressing disappointment with this decision,” Missouri Gov. Matt Blunt said following the announcement. “Missouri was the only state in the country in the running and the company made the decision to stay in their native country. While the outcome was not what we had hoped, it would have been a mistake not to try and attract the company to Missouri.”
 
Missouri Department of Economic Development director Greg Steinhoff voiced similar sentiments. “We have no reason for bowed heads,” Steinhoff said. “Gov. Blunt, the Missouri General Assembly and the Department of Economic Development all worked diligently in a bipartisan manner to create a business-friendly climate in Missouri.”
 
So impressed with Kansas City and the available workforce, Bombardier officials are still considering the prospect of another major investment in Kansas City, strengthening even further the region’s aerospace corridor stretching from Wichita, Kansas to St. Louis. The potential project involves a finishing plant for the company’s Global Express long-range business jet. The facility, where final interior and exterior work and finishing would be done, could employ up to 1,500 people.
 
Steinhoff said more discussions were expected over the next two or three months. “It would be great if we’re able to follow through with this,” he said. “They have a real heart for Kansas City, not just our desire but the fact that it would be a good place for them to operate.”
 
That business-friendly climate not only attracted the attention of Bombardier, but it sends a loud and clear message to the rest of the world: Missouri is open for business.
 
The ‘Show-Me-State’
 
“Missouri may have not been the right choice for Bombardier, but the Show-Me State showed the world that we will go after mega-projects, and that we are serious about economic development and attracting quality jobs for our citizens,” Steinhoff said. “Missouri may not have won the project but what matters most is that our state was in the game.”
 
Economic developers around the state of Missouri are seeing the impact of passage of this type of mega-project legislation. Positive attention and the leads such attention has generated, makes Missouri an exciting place to be in 2008.
 
Missouri Partnership
 
In addition to mega-project legislation, the newly-formed Missouri Partnership, a public-private partnership made possible through public funding and financing from private business, is up and running and the business recruiter for the state. This organization, with duties once held by the state Department of Economic Development, is assisting regional and local economic developers in getting the word out that Missouri is a desirable state in which to do business. Furthermore, the Missouri Partnership is generating buzz around the state’s new marketing effort.
 
According to Chris Chung, executive director of the Missouri Partnership, in the recent past Missouri has not been able to truly compete for the consideration of companies planning projects such as Bombardier. Chung said while the state may possess many of the prized attributes deemed important by these companies – transportation accessibility, available skilled labor, low-cost energy, large tracts of developable real estate, proximity to markets, and a reasonable tax climate – so, too, do other states that have been more successful in landing these types of economically impactful projects.
 
“One key reason Missouri has failed to keep pace with its competitors in pursuit of these ‘mega projects’ is precisely what this legislation is intended to address,” Chung said. “That is, other states have simply been more able and more willing to assemble aggressive state and local financial incentive packages, whereas Missouri has lacked similar resources at its disposal.”
 
Chung said the continued success of Missouri relies on the state’s ability to remain competitive in the global market. This legislation will help Missouri continue its economic development efforts.
 
Chung cautions that although it is not the final step of any recruitment effort, it is a positive development and great opportunity for state officials to work to bring high quality, high paying jobs to our state that support long term economic growth.
 
Missouri Means Business
“From a marketing and perception point-of-view, passage of the legislation will signal that the State of Missouri is a serious contender for the kinds of high-impact, ‘economy shifting’ private-sector investment deals that have been locating in recent years with regular frequency in the Southern and Southeast United States,” Chung said. “While there may be just a handful of these ‘mega projects’ across the U.S. each year, pursuit of these projects – like the Bombardier investment – have the potential to positively transform the entire economy of a region or state for decades to come.” For help, contact the support team.

 

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