IMPLEMENTATION PLAN ***DRAFT FOR DISCUSSION …

IMPLEMENTATION PLAN

***DRAFT FOR DISCUSSION PURPOSES ONLY*** Submitted by Market Street Services Inc. www.marketstreetservices.com September 11, 2012

TABLE OF CONTENTS

Introduction ............................................................................................................................................................... 1

Advance KC Strategic Plan ................................................................................................................................... 2

Advance KC Implementation .............................................................................................................................. 4

Economic Development Corporation of KC .......................................................................................... 6

Governance Structure ............................................................................................................................. 7

Incentives Policy ....................................................................................................................................... 8

Staffing Structure ..................................................................................................................................... 8

Current Staff composition ..................................................................................................................... 8

Proposed Staff Composition ............................................................................................................. 13

Statutory Agencies ....................................................................................................................................... 20

Phase I: Creation of a Consolidated Board .................................................................................. 21

Phase II: State Enabling Legislation to consolidate redevelopment agencies ............... 23

AdvanceKC Implementation Structure ................................................................................................. 25

Short Term ............................................................................................................................................... 25

Long Term ................................................................................................................................................ 25

Implementation Timelines ......................................................................................................................... 28

AdvanceKC Implementation Costs ......................................................................................................... 36

AdvanceKC Performance Metrics ........................................................................................................... 37

Conclusion .............................................................................................................................................................. 40

Appendix A: Economic Development Corporation Budget Analysis ................................................ 41

Appendix B: Action Timelines for Five-Year AdvanceKC Implementation Cycle .......................... 58

Appendix C: Economic Development in Missouri .................................................................................... 70

***DRAFT FOR DISCUSSION***\\\\ AdvanceKC Implementation Plan //// ***DRAFT FOR DISCUSSION

Page 1 | September 11, 2012

INTRODUCTION The AdvanceKC Strategic Plan determined “what” the City of Kansas City must do to: 1) be competitive for the highest-value jobs being created in today’s economy; 2) provide a workforce capable of supporting the growth needs of local companies; and 3) foster a quality of life and “place” that attracts high-skill individuals, households, visitors, and investors. “How” that will be accomplished is the domain of this Implementation Plan.

While AdvanceKC will be activated by a network of local partners, the City of Kansas City will be charged with coordination of overall implementation activities, reporting on implementation progress and impacts, and leading efforts tied to multiple economic development-focused strategies. The Economic Development Corporation (EDC) of Kansas City, as the City’s principal development entity, will house AdvanceKC and be its principal implementer. However, in order to accomplish this, the EDC will need to be repurposed and restructured to serve this new and critical role. While its development-focused work will continue, it is also vital that the EDC’s Board of Directors and relationships with contracted statutory partners be reexamined in order to streamline and optimize economic development processes in Kansas City.

This Implementation Plan lays out a proposed structure for effectively and successfully moving AdvanceKC forward in the coming five years. In order for economic development in the City of Kansas City and the work of its EDC to be focused on activities that add the most value to the City’s economy, the EDC must serve a much stronger role in the service of existing businesses and relationship-building with top executives, marketing of Kansas City to prospect firms in partnership with state and regional agencies and organizations, and referring of businesses and entrepreneurs to services and service-providers that can help optimize their workforce capacity, secure funding or assistance for new enterprises, be provided necessary infrastructure to support expansion, and – when a compelling case has been presented and approved – receive statutory redevelopment monies to support their growth ambitions.

Quite simply, economic development in Kansas City must become people-based rather than project-based. Statutory incentive tools should be used occasionally and only as needed to create a more competitive business climate for local companies. Only by reducing the use and administrative responsibilities of the EDC’s affiliated statutory agencies will resources be available to redirect staff to existing business, research, and marketing activities.



ADVANCE KC STRATEGIC PLAN The Strategic Plan (or “what” component of the process) includes a set of ten “competitiveness categories” related to Kansas City’s economic, community, and talent/education dynamics and associated action steps to make the City a more dynamic location for business, investment, and talent. The Plan incorporates key existing efforts to recognize the work that has – and is – being done to improve the City. New recommendations are also included to complement existing strategies and fill in certain programmatic gaps. The AdvanceKC strategy resulted from the feedback of hundreds of local stakeholders across many constituency spectrums. One-on-one interviews, over 30 focused groups, and an online survey all complemented quantitative data work to assess Kansas City’s competitive position against high-performing benchmark cities. The AdvanceKC Steering Committee also provided valuable feedback to draft deliverables and approved the strategy’s final components. The AdvanceKC plan is structured as follows:

1.0 ARTS AND LEISURE

1.1: INTEGRATE the findings and recommendations of the Task Force on the Arts into the AdvanceKC framework.

1.2: SUPPORT next steps in the development of a University of Missouri, Kansas City (UMKC) Downtown Campus of the Arts.

1.3: DEVELOP an Action Plan to optimize the facilities, programming, promotion, and access to Kansas City parks and boulevards.

2.0 BUSINESS CLIMATE

2.1: SUPPORT the implementation of priority recommendations from the City of Kansas City’s Special Committee on Small Business.

2.2: REVISIT the City of Kansas City’s incentives policy based on the dynamics of the AdvanceKC strategy.

3.0 CONNECTIVITY AND COLLABORATION

3.1: CREATE a Kansas City Strategic Coordination Council. 3.2: DEVELOP a program and curriculum encouraging inter-racial dialogue and awareness-

building.

4.0 INFRASTRUCTURE DEVELOPMENT

4.1: DEVELOP a research-supported list of Kansas City’s highest priority infrastructure projects for inclusion in a public funding referendum.

4.2: SUPPORT the Bistate Innovation Team convened to propose strategies to leverage the Google Fiber network.



5.0 INNOVATION AND ENTREPRENEURSHIP

5.1: DEVELOP an Action Plan for an entrepreneurial “ecosystem” in Kansas City to best foster local enterprise creation.

5.2: COORDINATE a program to foster arts-based entrepreneurship in Kansas City.

6.0 MOBILITY

6.1: CONSTRUCT a modern streetcar line in Kansas City as the first link in a broader intermodal transportation network.

6.2: IMPLEMENT the MetroGreen plan in coordination with Kansas City bike and pedestrian trail development efforts.

7.0 PUBLIC SAFETY

7.1: CONTINUE to emphasize the importance of public safety to economic development outcomes in Kansas City.

7.2: IMPLEMENT a predictive policing program in the City of Kansas City.

8.0 TALENT DEVELOPMENT AND EDUCATION

8.1: BUILD a comprehensive public-private coalition to improve Kansas City’s public school systems and develop “cradle-to-career” training pipelines.

8.2: SUPPORT efforts to retain local graduates and market Kansas City to external talent.

9.0 TARGET SECTOR SUPPORT

9.1: DEVELOP research-supported Action Agendas for Kansas City’s priority target business sectors.

9.2: REFOCUS the KC Best (Business Expansion Support Team) program on Kansas City’s highest value target sectors.

9.3: SUPPORT implementation of the KC Rising strategy.

10.0 URBAN LAND USE AND REVITALIZATION

10.1: DEVELOP a Land Use and Planning Update to the FOCUS Plan’s Citywide Physical Framework Plan.

10.2: LEVERAGE the Land Use and Planning Update to inform economic development and revitalization activities.



ADVANCE KC IMPLEMENTATION The following pages set out a process to begin work on AdvanceKC’s strategic recommendations while also restructuring the agency that will be most critical to its success, the EDC of Kansas City. There is a tremendous opportunity for Kansas City to better take advantage of its competitive capacity and job-creation opportunities in high-value sectors. To accomplish this, it will be critical that the City, EDC, and its partners refocus on the growth of existing businesses and supporting and enhancing the marketing of Kansas City as a top destination for companies, investors, and talent.

The sequence of AdvanceKC implementation that will be proposed in this report includes the restructuring of the EDC as the top priority. By principally focusing the EDC on economic development as opposed to administration, it will evolve to have more capacity to help coordinate strategic activities in Kansas City. Eventually, structures can be put into place to formalize strategic coordination in the City to an even stronger degree. Below is a brief timeline of AdvanceKC’s priority implementation activities:

1. Formalize and enhance the AdvanceKC Implementation Committee (September 2012 -October 2012)

• Transitioning the current Steering Committee into the AdvanceKC Implementation Committee is essential for the success of the Strategic Plan. The Committee will provide oversight and take ownership of the first steps of Advance KC’s Implementation.

2. Increase public awareness and support of the AdvanceKC process (September 2012 - December 2012)

• Obtaining public buy-in and informing business leaders, potential investors, and decision makers will lay the groundwork for AdvanceKC’s medium, and long term goals. Such a campaign should also educate the public that a Consolidated Board and a reoriented EDC are necessary for holistic economic development in the City of Kansas City.

3. Restructure EDC personnel, and funding structures (September - December 2012)

• Restructuring the EDC is crucial to redefining economic development in the City of Kansas City, setting the cornerstone for the holistic economic development approach to economic development contained within the AdvanceKC Strategic Plan.

4. Create the Consolidated Board (December 2012)

• Streamlining the statutory agency structure will eliminate the potential for “incentive shopping” by improving the coordination and communication between the differing



statutory tools. The consolidated board would potentially reduce the roughly 100 board members currently serving the statutory boards down to 15.

5. Create a Kansas City Strategic Coordination Council (September 2013)

• The Kansas City Strategic Coordination Council will serve as an “umbrella” organization tying multiple local partners together and will be comprised of top volunteers, community leaders, and the highest-ranking elective officials from the governments, agencies, organizations, foundations and other partners operating in the City of Kansas City.

Each of these actions will be formalized in a First Year Action Plan later in this report.



Economic Development Corporation of KC The Economic Development Corporation of Kansas City (formerly the Kansas City Corporation for Industrial Development) gained incorporation as a nonprofit in 1978 under Chapter 355 of the Missouri Code of Ordinances. According to local stakeholders, the goal of the EDC was to streamline Kansas City’s economic development processes by providing a single point of contact for the City’s various economic development funding mechanisms. As such, the EDC provides staff and other administrative support to five statutory agencies and counts three additional agencies as “affiliates.” The EDC’s administrative agencies are:

• Downtown Economic Stimulus Authority: Allocates new state revenue to be redirected for projects in Kansas City’s urban core.

• Enhanced Enterprise Zone Boards: Provide incentives such as state tax credits and local tax abatement to businesses that locate or grow their operations within a defined geographical area.

• Land Clearance for Redevelopment Authority: Removes blighted properties and encourages redevelopment within designated urban renewal areas through property tax abatements, issuance of bonds, and assistance with land assembly.

• Tax Increment Financing Commission: Regulates the TIF development tool that captures future real property taxes and economic activity taxes to pay for projects that could not have been developed without TIF assistance.

The EDC’s affiliate agencies are:

• Industrial Development Authority: Issues tax-exempt Industrial Revenue Bonds to finance new or expanded manufacturing facilities.

• Planned Industrial Expansion Authority: Fosters commercial and industrial development in specifically designated redevelopment areas.

• KC Port Authority: Serves as a redevelopment entity through transportation, trade, commerce, and riverfront development.

The EDC also oversees the EDC Loan Corporation, a non-profit entity that originates and underwrites SBA 504 loans in partnership with third party lenders; it also manages revolving loan fund programs. The relationship between the EDC, its administered statutory agencies, and the City is governed by annual contracts. Under the contracts, the statutory agencies maintain independence from the EDC. Per the contract, “Neither the EDC as a body, nor any of its officers or employees, has authority or control over the policies or decisions of the statutory agency.” Though the statutory agencies are independent, the EDC serves as the entities’ only staff and provides administrative and accounting services. The statutory agencies’ boards have final say over the distribution of associated funds.



Per its founding document, the EDC was envisioned as a tool to retain existing businesses, help existing businesses to expand and attract new businesses with priority given to the central city. Its first board consisted of three persons. However, the EDC board has morphed to over 50 people and its mission has been overly focused on deal-making and development projects. Thus, although the EDC was created to simplify and streamline economic development in Kansas City, many stakeholders feel that the opposite has happened. The AdvanceKC process provides a window of opportunity to propose changes to the EDC and the City’s economic development processes that will streamline and refocus programmatic priorities and make Kansas City more competitive for new investment.

GOVERNANCE STRUCTURE Under its articles of incorporation, the EDC was intended to have a Board of Directors of three individuals. As of 2012, the agency’s board is up to 52 people, including 13 ex-officio members. According to a number of public-input respondents, participation among EDC board members is often low, with some members never attending meetings. In order to most effectively position the EDC to grow Kansas City’s economy, its board must be comprised of volunteers who can foster collaboration, connectivity, and consistency among the EDC and the agencies it partners with and administers.

EDC Board Per a model that is working successfully for St. Louis’ EDC according to accounts from local development professionals there, Market Street recommends that the Kansas City EDC board be significantly reduced in size and consist of the volunteer leaders of the EDC’s administered and affiliated statutory agencies. Thus, the EDC board will be wholly comprised of members of the statutory agency Consolidated Board described later in this Implementation Plan. The creation of this streamlined governance entity will position Kansas City to be the most effective redevelopment market in Missouri.

Committees Rather than have committees populated under the EDC, Market Street recommends that the EDC compel its board members and staff to sit on Action Committees eventually developed under the Kansas City Strategic Coordination Council. In this way, the voice of the EDC and its programmatic perspective and expertise can contribute to city-wide discussions on issues such as workforce quality, infrastructure, diversity, neighborhood revitalization, public safety, arts and culture, parks and recreation, and other components of a successful community. This would ensure that there is no redundancy of membership or discussion on an EDC committee and one affiliated with the Strategic Coordination Council or another local/regional partner.



INCENTIVES POLICY Critical to an effective restructuring and reorienting of the EDC is a complete review and rethinking of the City of Kansas City’s incentives policy. As opposed to reactively pursuing development project by project, the EDC should consider incentives awards in the context of a broader, holistic, and proactive economic development program focused on the City’s priority opportunity areas. This should be accomplished by applying a VALUE RANKING to potentially incentivized projects based on objective, merit-based criteria. The value ranking would be principally tied to:

1. Applicability to target-business sectors identified by EDC research, 2. Geographically based economic development prioritization informed by an updated land-use

assessment with newly confirmed “geographic area plan regions,” and 3. A “but-for” condition determining whether the project has viability without incentivized

support.

Having a data-driven and criteria-based system for ranking potentially incentivized projects will ease the EDC’s regulatory responsibilities because there will be far less subjectivity in the process. Developers will be able to work with EDC staff to tailor incentives packages to projects that fulfill the assessment criteria. Similarly, the new criteria integrated into the incentives-assessment process will lead to clearly defined performance metrics that the EDC’s administrative team can utilize to determine the benefit of incentives awards and whether similar projects merit incentives funding in the future.

STAFFING STRUCTURE The EDC has gradually evolved into agency with a budget overwhelmingly tied to fees accrued from development projects and a majority of staff who administers the Corporation’s statutory agencies or markets their tools to local developers. The EDC’s funding has gone from an 89 percent City investment in 1989 to 13 percent in 2010.

Market Street’s review of other municipally housed and/or affiliated economic development agencies in the U.S. shows that dedicating staff to administrating incentives-granting entities does not preclude the agency from performing core economic development activities that create good jobs and build local wealth. Having the in-house capacity to leverage expertise on incentives tools for high-value projects can simplify negotiations with prospects and bring the entire project-management cycle under the same agency banner.

CURRENT STAFF COMPOSITION Currently, the Economic Development Corporation of Kansas City (EDC) has 33 non-contract employees (as listed in the org chart) working in five separate departments. These include:



• Executive Office – The office houses the Executive Assistant to the CEO and the P:resident and CEO who provides leadership for the EDC, executes the strategic direction of the Board, provides management oversight of all aspects of the EDC’s activities and maintains relationships with all EDC partners and stakeholders.

• Administrative Support –This agency provides a variety of services to the functioning of the EDC, including accounting services for the entire and affiliate organizations, TIF EATs compliance, IT management, and other administrative support functions.

• Business Retention and Recruitment – Staff under this department provides site selection assistance, financial assistance information, technical assistance and referrals, and governmental ombudsman services to existing and prospective KCMO businesses.

• Development Services Group – Development services specialists provide professional assistance to developers, neighborhoods and businesses in evaluating and coordinating local and state financing options to stimulate private investment within Kansas City, Missouri.

• Agencies Support Group – Staff in this department play a variety of roles ranging from monitoring TIF developer obligations and contract compliance to managing the day-today operations of the LCRA and EEZ boards. Other programs housed under this department include the Neighborhood Stabilization Program, EDC Loan Corporation, TIF housing programs, Land Clearance for Redevelopment Authority, and the Enhanced Enterprise Zones.

The following chart represents the most recent staffing chart for the EDC of Kansas City. Positions with multiple staff are noted parenthetically after the job title.



EDC of Kansas City: Staff Organization Chart April, 2012

Source: EDC of KC

While only a handful of EDC staff (the Agencies Support Group) are assigned full-time to administering a statutory agency, most EDC staff work on projects with redevelopment funding components. According to the EDC, overall staff structure at the agency is quite fluid; staff routinely cross the boundaries of the various agencies based on the dynamics of a project. However, staff will not do the work of another job category. For example, a Development Services Specialist would never do the work of an Accountant, and vice versa. The EDC does not track the amount of time each non-affiliated employee dedicates to a particular statutory agency except when time can be charged back



to a developer or the work involves a specific contract such as the Neighborhood Stabilization or ReBuild Kansas City programs.

Though staff does not record their work hours involved with each statutory authority, the EDC has attempted to quantify an approximate allocation of staff time to the EDC and each agency. The following table reflects these assumptions.



EDC OF Kansas City: % of Employee Time Dedicated To Each Agency August, 2012

Source: EDC of KC

TITLEAGENCY/

DEPT. EDC DESA LCRA LOAN NSPREBUILD

KC TIF Total

President/CEO Exec. 100% 0% 0% 0% 0% 0% 0% 100%

Executive Asst. Exec. 100% 0% 0% 0% 0% 0% 0% 100%IT Manager Admin. 100% 0% 0% 0% 0% 0% 0% 100%Accountant - Controller Admin. 35% 2% 8% 10% 3% 2% 40% 100%Accountant Admin. 30% 5% 0% 0% 25% 10% 30% 100%Accounting Asst. Admin. 30% 10% 10% 10% 10% 10% 20% 100%MBE/WBE Coordinator Admin. 15% 0% 25% 0% 0% 0% 60% 100%Accountant Admin. 0% 10% 0% 0% 0% 0% 90% 100%Accountant Admin. 0% 0% 50% 50% 0% 0% 0% 100%COO Admin. 100% 0% 0% 0% 0% 0% 0% 100%

Accountant Admin. 10% 0% 5% 5% 5% 5% 70% 100%Business Dev. Officer BRR 100% 0% 0% 0% 0% 0% 0% 100%Business Dev. Officer BRR 100% 0% 0% 0% 0% 0% 0% 100%Business Dev. Officer BRR 100% 0% 0% 0% 0% 0% 0% 100%Business Dev. Officer BRR 100% 0% 0% 0% 0% 0% 0% 100%Business Dev. Officer BRR 100% 0% 0% 0% 0% 0% 0% 100%Business Dev. Officer BRR 100% 0% 0% 0% 0% 0% 0% 100%Business Dev. Officer BRR 100% 0% 0% 0% 0% 0% 0% 100%

Receptionist/Admin. Asst. BRR 100% 0% 0% 0% 0% 0% 0% 100%Development Services DS 20% 0% 50% 5% 0% 0% 25% 100%Development Services DS 30% 0% 0% 0% 0% 0% 70% 100%

Development Services DS 10% 0% 15% 0% 0% 15% 60% 100%LCRA Exec. Director LCRA 0% 0% 90% 0% 5% 5% 0% 100%

LCRA Admin. Asst. LCRA 0% 0% 100% 0% 0% 0% 0% 100%Loan Admin. Asst. Loan 0% 0% 0% 90% 10% 0% 0% 100%Loan Exec. Director Loan 0% 0% 0% 100% 0% 0% 0% 100%

Loan Officer Loan 0% 0% 0% 100% 0% 0% 0% 100%

ReBuild KC - Loan Servicing Housing-ReBuild

0% 0% 0% 0% 0% 100% 0% 100%

NSP Coordinator Housing-NSP

0% 0% 0% 0% 90% 10% 0% 100%

ReBuild KC- Asset Mgr.Housing-ReBuild 0% 0% 0% 0% 0% 100% 0% 100%

TIF Exec. Director TIF 0% 0% 0% 0% 0% 0% 100% 100%TIF Admin. Asst. TIF 0% 0% 0% 0% 0% 0% 100% 100%

Housing Coordinator TIF 0% 0% 5% 0% 45% 0% 50% 100%

41.8% 0.8% 10.9% 11.2% 5.9% 7.8% 21.7% 100.0%TOTAL



Based on an analysis of the EDC’s compensation expenditures, Market Street estimates that current staff time is primarily dedicated to administrative and agency support roles. Nearly 45 percent of the EDC’s total employee compensation expenditures were spent on administrative and support roles in 2012. Excluding administrative functions, compensation trends show that 30.4 percent of EDC’s employee compensation was spent on Business Retention and Recruitment, 20.8 percent went to project development, and 21.1 percent was spent on the Tax Increment Financing Commission. The remainder was spent on the EDC Loan Corporation (14.2 percent) and Land Clearance for Redevelopment Authority (13.5 percent).

PROPOSED STAFF COMPOSITION By focusing on relationship-building with existing businesses, developing referral networks of contacts in Kansas City’s education, training, governmental, and small business/entrepreneurial systems, and marketing the City through partnerships with the KCADC, Greater Kansas City Chamber, and the Missouri Department of Economic Development, the EDC can more effectively serve as the City of Kansas City’s principal economic development and marketing entity. Creating a research department at the EDC will enable the agency to assess and inform target sector activities and develop/manage databases of information on all components of Kansas City competitive capacity and position, from real estate to development sites to the BRE database, and other areas

Because of this, Market Street is making the assumption that refocusing the EDC’s mission will reduce staff capacity needed to administer its statutory agencies. The salary savings can then be dedicated towards staffing a Research Group and differentiated Marketing and Existing Business groups as opposed to the current Business Retention and Recruitment Group. Monies will also go towards the hiring of an AdvanceKC Coordinator to work with local implementation partners on the advancement of the strategic plan’s recommended programs and activities.

Executive Directors of the EDC’s administered statutory authorities will be coalesced into a single Executive Director of the EDC Consolidated Board with support from other Development Services Group staff. By reducing the number of authority directors from over 100 to around 15 people, there will be much less administrative responsibility to manage these volunteers.

If the project Steering Committee supports a contractual realignment of the IDA, PIEA, and Port Authority under the EDC, the proposed staff chart will be amended to reflect that.



Proposed personnel for a restructured EDC are shown in the following chart:

Here is a summary of the key changes proposed to the EDC’s staffing and departmental structure:

Executive Office • No proposed changes.



Administrative Support Group • Currently, the EDC has a COO, a Controller, an Assistant Controller, two Staff Accountants, an

Accounting Assistant, and a Financial Analyst. Market Street feels these positions can be slightly reduced and redirected.

o Market Street proposes that the Administrative accounting team be comprised of the COO, one Controller, and an Assistant Controller. The Financial Analyst responsibilities will be subsumed by the Controller and the two Development Services Specialists.

o Because, according to the EDC, Staff Accountants devote a major portion of their time to processing the TIF accounting and similar tasks for the other agencies, Market Street proposes relocating the two Staff Accountants to the Development Services Group as Financial Administrators. The Accounting Assistant position will be eliminated.

• The position of AdvanceKC Coordinator is added to the Group. • The position of MBE/WBE Coordinator is expanded to become a Compliance Coordinator,

responsible more broadly for contract compliance with the EDC working along with Development Services Group staff and the City of KC City Manager’s office.

Research Group • A new department is created with two staff, a Director of Research and a Research Officer.

Staff will detail, assess, and analyze all components of the City of Kansas City economy, development product inventory, BRE database information, and other tasks. They will be available to EDC staff for select research projects deemed important to advancing the EDC’s mission.

Business Retention and Recruitment Group • The Group is proposed to be split into the Marketing Group and Existing Business Group.

o The Senior Business Development Officer position is split into Directors for each new Group.

o In the Marketing Group, the four existing Business Development Officer roles are subsumed by two Marketing Officers and a Communications Officer. The Marketing Officers will work with the KCADC and MDED on prospect management, take marketing trips along with partner organizations, maintain knowledge of the City’s development product, and coordinate with EDC Development Services staff to prepare incentive packages – as needed – with vetted, high-value prospects. The Communications Officer will work with the Director of Marketing to manage and optimize the EDC’s website and marketing collateral.

o In the Existing Business Group, the two BEST Business Development Officers and the two contract BEST Business Ambassadors become three Existing Business Officers. This will actually provide the EDC with additional – and more focused – staff



capacity to work with existing businesses, build relationships, and network with key local referral partners. Market Street feels that Business Ambassadors are still valuable, but should not be paid. It is rare for corporate volunteers to be compensated for making existing-business calls.

• The Receptionist/Administrative Assistant position will be subsumed by the President/CEO’s Executive Assistant and the Administrative Assistant of the Development Services Group.

Agencies Support Group • This Group becomes the Development Services Group. Principal changes in this group

reflect the contraction of the statutory authority boards and also the sunsetting of the Neighborhood Stabilization and ReBuildKC program grants in 2013.

o The Executive Director of the LCRA/EEZ position and part of the role of the Executive Director of the TIF/DESA is subsumed by the new Executive Director of the EDC Consolidated Board. The new position of TIF Coordinator will be responsible for the administration of the TIF tool and projects.

o The LCRA/EEZ Administrative Assistant and the TIF Administrative Assistant positions are consolidated into an Administrative Assistant for the entire Development Services Group.

o As noted previously, the two Staff Accountants currently housed in the Administrative Support Group will be transferred to the Development Services Group as Financial Administrators.

o One of the three Development Services Specialist positions is proposed to be eliminated due to a change in EDC mission away from the use of statutory incentives.

o The Executive Director of the EDC Loan Corporation position remains, however the Loan Officer and Loan Assistant positions are combined into a single Commercial Loan Officer position.

o After the NSP and ReBuild KC grants expire in 2013, the Housing Coordinator position will carry on the responsibility of managing ongoing programs and will also be responsible more broadly for residential projects incentivized through the EDC’s statutory tools.

o The Asset Manager of ReBuild KC position will also be expanded to management of the EDC’s full portfolio of assets, working with other EDC financial staff.

The 35 staff positions listed in the EDC’s current organization chart (including the two contract BEST Business Ambassadors) are reduced to 29 positions in the restructured EDC. While the total number of staff is not greatly diminished, their roles, responsibilities, and focus areas are much more targeted on holistic economic development practices as opposed to incentivized deal making.



Cross-Departmental Development Teams On pages 60 and 61 of the 1998 Kansas City FOCUS (Forging Our Comprehensive Urban Strategy) Governance Plan, the drafters call for the establishment of a “service-area framework” with “multi-disciplinary teams” in each City department “collectively responsible and mutually accountable for coordinating the planning, organization, staffing, budgeting and operation of priority services for their assigned service area.” Certain current EDC employees (including the BEST staff) are already assigned to territories within the City. Because the City of Kansas City has so many distinctive “sub-areas” (city center, Northland, Northeast Industrial, Plaza/Westport, Eastside, etc.), it would benefit the EDC to put together cross-functional teams across departments to manage economic development activities in these districts. The actual sub-area designations will be identified and confirmed as “geographic area plan regions” through the Land Use Update called for in the AdvanceKC plan. Ideally, there would be no more than five to six sub-areas. If more are identified through the Land Use Update, the multi-disciplinary teams may need to be assigned to multiple continuous “plan regions.”

Each team would be comprised of one or more members from the following function areas, corresponding to the proposed EDC staff chart:

EXISTING BUSINESS

The EDC’s Existing Business staff would coordinate the following activities:

• Implementing the KC BEST business retention and expansion (BRE) program designed around visitation of top employers in Kansas City’s identified target-business sectors.

o Companies for visitation would be identified as well as frequency of visits, key contacts, and interview questions.

o Maintaining existing business databases resulting from BRE discussions. o Building relationships with employers that can be leveraged for marketing Kansas

City and connecting prospective employers with local colleagues. • Supporting existing business expansions by assessing and communicating the availability of

development incentives. o The Existing Business officer would work with EDC’s Development Administration

staff to determine if the project qualifies for incentives and in what amounts and sources.

• Facilitating linkages between existing businesses and other City and non-governmental partners, depending on businesses’ needs.

o Examples include: Workforce development, regulatory and permitting assistance, public safety issues, infrastructure issues, etc.

• Connecting any recruitment leads identified during BRE visits to the EDC’s Marketing team and staff at the KCADC.



• Identifying opportunities related to small business development and entrepreneurship and connecting that candidate with resources at the City, UMKC, Kauffman Foundation, Think Big Partners, etc.

MARKETING

The EDC’s Marketing staff would coordinate the following activities:

• Coordinating with KCADC to ensure that the City of Kansas City target-business sectors identified by EDC research are integrated into regional, national, and international marketing efforts, initiatives, websites, and collateral.

• Working closely with KCADC and DED staff to manage prospect inquiries, liaison with EDC’s Research department to produce data profiles in response to RFIs, craft and deliver EDC’s response to RFIs to the ADC and state in a timely manner.

o Marketing staff would work with Development Administration staff to quickly assess potential availability and breadth of development incentives for active projects.

• Maintaining a property, site, and building inventory of the “plan region” districts for integration into a product database.

o The database would include data on ownership, land costs, property and building valuations, zoning categories, existing uses, vacancy, etc.

o Product data would be represented graphically through GIS mapping for posting on the EDC site, linked to the KCADC and Missouri Department of Economic Development (DED) sites.

o EDC would work to optimize Kansas City’s available development product based on target-sector opportunities.

• Working with EDC Research staff to maintain and optimize the EDC’s website and social media tools like Facebook, Linked-in, Twitter, Pinterest, and YouTube.

• Coordinating the development and dissemination of marketing collateral focused on the City of Kansas City’s key assets and target-business sectors.

• Accompanying KCADC and DED staff on domestic and international marketing and mission trips tied to the City of Kansas City’s identified target-business sectors.

DEVELOPMENT ADMINISTRATION

The EDC’s Development Administration staff would coordinate the following activities:

• Working with EDC Research staff to vet active expansion and relocation projects for potential incentivization.

o Value rankings would be developed for announced projects based on new evaluation criteria.

o Recommendations would be made to the EDC Board.



• Staffing the statutory agency Consolidated Board (see description later in this report) and supporting its decision-making.

• Liaising with EDC Existing Business and Marketing staff to provide information on potential use of incentives for qualifying projects and prospects.

• Ensuring compliance with awarded incentives. o Staff will work with the Research team to consistently update performance metrics to

determine the efficacy of awarded incentives and inform their future use.

RESEARCH

The EDC’s Research staff would coordinate the following activities:

• Working with all departments to provide supportive research for departmental functions and programs.

• Supporting Marketing staff by researching data for inclusion in responses to prospect RFIs and RFPs.

• Conducting ongoing research on the City of Kansas City’s economic structure to ensure that the City’s highest-value target sectors are being marketed and developed.

o Many data points and sources will not be available via government databases, requiring that EDC staff develop partnerships with local agencies, associations, businesses, institutions, etc., to formalize the collection and dissemination of this information.

• Performing program evaluations across departments and authorities. • Supplementing research and assessment of potential incentives by developing value rankings

and following up on performance of awarded incentives. • Assisting with the maintenance of existing business and development product databases. • Assisting with population and updating of EDC websites.



Statutory Agencies Like most Missouri cities, Kansas City leverages a number of different incentives and funding sources to facilitate redevelopment in under-invested districts. These funds are available through state-enabled redevelopment entities formalized in Missouri’s code of ordinances. Each one features variations on what can be funded and for what purpose. Each one is governed by appointed volunteers and has different review and approval protocols.

Ideally, economic developers would be able to draw from a single source of redevelopment funding governed by a single board of overseers. However, Missouri code (like those of most states) does not allow its cities to consolidate the operation and management of statutory economic development authorities, boards, corporations, and commissions under one omnibus fund, agency, or board. Structurally and organizationally, this makes it difficult for city-run or affiliated development entities to be optimally effective.

While Kansas City and St. Louis – principally – have tried to get around this limitation by creating non-profit corporations to staff and administer funding entities, the fact that each entity is required by law to have its own group of independent, appointed decision-makers to oversee its funding decisions ensures that Missouri cities cannot respond as quickly or transparently to development prospects as necessary. Furthermore, statutory agencies are governed by varying public participation and public notice requirements that may act as additional impediments to speedy turnaround times demanded by business prospects.

In an attempt to determine if a more effective economic development model was available for Kansas City to pursue, Market Street reviewed economic development structures allowable under Missouri law, examined the economic development processes of other large Missouri cities, and assessed organizational models from outside of Missouri1. This assessment concluded that, save for the passage of state legislation enabling a consolidation of municipal redevelopment agencies, there was no best practice solution to “fix” Kansas City’s redevelopment system. However, that does not mean that the process cannot be improved, streamlined, and better coordinated.

As was noted earlier in this Implementation Plan, Market Street feels there is benefit in:

• Keeping the regulation and administration of its statutory agencies under the purview of the EDC;

• Creating a Research department at the EDC to more effectively vet potential projects for incentivization and track performance of awarded incentives to inform future funding opportunities;

1 Detailed information from this review is included in Appendix C.



• Reviewing and reforming the City of Kansas City’s incentives policy to tie awards directly to high-value opportunities through “grading” of projects based on applicability to target-business sectors and “geographic area plan regions”; and

• Reforming the EDC board to consist of the redevelopment Consolidated Board described below.

The following sections describe a two-phase process for improving the efficacy of Kansas City’s statutory redevelopment agencies.

PHASE I: CREATION OF A CONSOLIDATED BOARD All of Kansas City’s statutory redevelopment agencies are governed by their own board of commissioners. These governmental appointees serve to review and approve potential funding awards for qualified projects. AdvanceKC input respondents said that the City’s redevelopment agencies do not operate in a strategic, consistent way to advance the City’s economic prospects, but rather function in silos.

Though Missouri law does not allow the consolidation of redevelopment agencies, it does not expressly forbid the assembly of a Consolidated Board comprised of volunteer leaders serving on multiple boards and commissions. In other words, the same group of appointees would serve on all statutory redevelopment boards, with membership varying based only on prescribed board size. What is now a group of commissioners numbering roughly 100 will be reduced to only 15 individuals. The Consolidated Board will also serve as the EDC board.

The creation of a Consolidated Board would significantly improve the consistency and coordination of Kansas City’s statutory agencies because the same leaders would be making decisions across multiple redevelopment entities. Potential projects could be weighed according to how they impact the City’s economic development strategy and performance goals rather than their application to a particular parcel or district. Based on staff review and recommendation of viable redevelopment projects, the Consolidated Board could feasibly only vote on four to five projects per meeting.

As was said, Missouri law does not outline a process for dissolving a statutory board or establish whether a commissioner can serve on multiple boards. However, every commissioner always has the freedom to resign their post at any time. Ideally, sitting commissioners of Kansas City’s statutory redevelopment agencies would resign in order for a Consolidated Board to be created. Many existing commissioners could always be reappointed to the Consolidated Board.

If a commissioner chooses not to resign, the Kansas City City Attorney will need to confirm that the Mayor has the authority to remove one or more sitting commissioners and reappoint designees to govern multiple redevelopment agencies. Because Kansas City taxing authorities are involved in the appointment of TIF Commission members, this agency may also have different criteria for board adjustment.



Of the EDC’s current administrative statutory agencies, only the Land Clearance for Redevelopment Authority, Downtown Economic Stimulus Authority, and Planned Industrial Expansion Authority have language in their enabling legislation that references the removal of a commissioner. This language reads:

For inefficiency or neglect of duty or misconduct in office, a commissioner of an authority may be removed by the mayor (or by the governing body of the county in case it appointed such commissioner), but a commissioner shall be removed only after a hearing and after he shall have been given a copy of the charges at least ten days prior to such hearing and have had an opportunity to be heard in person or by counsel. In the event of the removal of any commissioner, a record of the proceedings, together with the charges and findings thereon, shall be filed in the office of the municipal or county clerk, as the case may be.

Of all Mayoral board appointments, City Council approval is only needed for the TIF Commission (which also serves as the Downtown Economic Stimulus Authority Board) and Industrial Development Authority. Thus, the Council would not have to vote on commissioner appointment or removal for all other agencies or unless the action affected the EDC’s contract with an agency, as was the case when the Port Authority became independent from the EDC’s administration.

The following are the Kansas City statutory redevelopment entities that would have their commissioners consolidated into a Consolidated Board. Each entity’s prescribed board size and commissioner terms are noted parenthetically.

EDC ADMINISTERED AGENCIES • Downtown Economic Stimulus Authority (11 to 12 members, 3-year term)

o The Authorizing Ordinance provides that the members of the Tax Increment Financing Commission shall serve as Commissioners of the Authority

o The Ordinance also stipulates that the Authority board must include a community development corporation representative, a representative of the school district, and an African-American business owner.

• Enhanced Enterprise Zone Board (5 members, 5-year term) • Land Clearance for Redevelopment Authority (5 members, 4-year term) • Tax Increment Financing Commission (11 to 12, 3-year term)

o Mayor appoints six members with City Council approval; o Plus two representatives of the four counties in which the city is situated; o Plus two representatives of the school districts in which the city is situated; o Plus one representative of the other taxing districts in which the city is situated.

EDC AFFILIATED AGENCIES

• Industrial Development Authority (7 members, 5-year term) • Planned Industrial Expansion Authority (15 members, 4-year term)



• Port Authority (7 members, 4-year term)

Thus, the Consolidated Board could be comprised at a minimum of 15 total members with each commissioner governing multiple authorities based on the Mayor’s discretion. Without revision of City ordinances, the Consolidated Board would need to include:

• A community development corporation representative • An African-American business owner • Two representatives of the four counties comprising the City of Kansas City • Two representatives of the school districts comprising Kansas City • One representative of the other taxing districts comprising Kansas City

Individuals could of course satisfy one or more of these requirements. The varying lengths of board-service terms will also need to be reconciled or accounted for in the formation and management of the Consolidated Board.

With the creation of the Consolidated Board, City officials must be sensitive to the workloads placed upon each appointed commissioner. Each redevelopment agency requires a specific timeframe for reviewing proposals, has different statutory powers, and different procedures for review. EDC’s Development Administration staff will need to work closely and effectively with commissioners to ensure they are prepared to make decisions based on the City’s economic development vision and highest priority development opportunities rather than the merits of a particular project in isolation. Meetings of each statutory commission should be held consecutively so that Consolidated Board members can fulfill their duties in one time period.

PHASE II: STATE ENABLING LEGISLATION TO CONSOLIDATE REDEVELOPMENT AGENCIES Market Street’s review of national redevelopment best practices identified a handful of states and communities that have successfully streamlined their development funding authorities into one consolidated tool or agency (see Appendix C). Because the Consolidated Board model described in Phase I can ultimately by dismantled by each successive Kansas City mayoral administration, it is not a sustainable solution to ensure that Kansas City remains a national model for effective economic development. Therefore, Phase II of the optimization of Kansas City’s redevelopment tools is the passage of Missouri legislation enabling the option of consolidating multiple statutory redevelopment authorities into a single agency with a single board.

Such legislation would provide benefit far beyond Kansas City and positively impact multiple Missouri communities where agency is pitted against agency and cities utilize statutory incentives to lure employers from a neighboring municipality and initiate bidding wars for top retail developments. Streamlining the redevelopment process would also make Missouri far more competitive for new investment than nearly every other state in the nation.



Cities and counties would thus have the option of creating a consolidated redevelopment agency to facilitate high-value development in the community’s disinvested and underinvested districts. The agency would have the power to issue bonds, abate real property taxes, redirect tax increment (i.e., TIF), and own/lease real estate. The use of tools in specific incentives districts would still be contingent on approval of voters and taxing authorities, as necessary.

The dynamics for appointment of commissioners to the consolidated redevelopment agency, the process for project approval by the agency, and other issues will be resolved by lawmakers working with representatives from the Missouri DED and local/regional development and governmental partners.



AdvanceKC Implementation Structure It is critical that activation of the AdvanceKC strategy and its ongoing implementation be managed and overseen by leaders with the influence to ensure the plan is successful. These volunteers must be supported by active, engaged staff and practitioners working to monitor and coordinate the various moving parts that will constitute the initial and subsequent phases of AdvanceKC implementation.

SHORT TERM AdvanceKC’s launch and early weeks and months of implementation are the most critical periods that will ultimately determine if the strategy is successful. As such, Market Street proposes that the Steering Committee created for AdvanceKC continue on as an Implementation Committee for the first year of implementation. The leadership that comprised the membership of the Steering Committee - with potential key and strategic additions – will serve as the “keeper of the goals” of AdvanceKC, taking ownership of the outcomes and monitoring progress towards the development of key entities such as the Kansas City Strategic Coordination Council. It will work with City officials and staff and practitioners from partner agencies to build consensus for the restructuring of the EDC governance and operational structures and will help lay the groundwork for Phase II of EDC’s operational and governance evolution. Phase II will be constituted by the passing of state enabling legislation to consolidate multiple statutory development agencies into an omnibus redevelopment agency with a single governing board.

The EDC’s AdvanceKC Coordinator would staff the Implementation Committee and serve as a liaison to City departments, the private sector, institutional partners, and other constituency groups and individuals who can advocate for and support strategic implementation. These top staff and practitioners from City departments and partner agencies should be formalized into a Practitioner Committee that meets congruent to the Implementation Committee to oversee and coordinate early AdvanceKC implementation. The Practitioner Committee will operationalize strategic recommendations in the context of their organizational realities, including staffing, programmatic, and budgetary dynamics.

The Implementation Committee will be kept apprised of all strategic activities and discussions with key stakeholders. The length of time the Implementation Committee is in existence – as well as the frequency of its meetings – will be determined as implementation progresses.

LONG TERM One of the long-term goals of AdvanceKC should be to better integrate the City of Kansas City’s strategic efforts into a more coordinated framework for implementation. This should only be pursued after the EDC has been restructured and is performing effectively. Empaneling of the Consolidated



Board should also be complete before discussions begin on creating a long-term implementation framework.

Market Street proposes this be accomplished by leveraging the Kansas City Strategic Coordination Council proposed in the AdvanceKC plan as an “umbrella” entity serving to tie together multiple local partners working to improve the City. The Strategic Coordination Council would be a staffed program of the Economic Development Corporation similar to the Denver Office of Strategic Partnerships housed under the Denver Office of Economic Development. Coordination Council members would be comprised of top volunteers and highest-ranking elected officials from the governments, agencies, organizations, foundations, and other partners represented on the Council. Potential Council members include:

City of Kansas City Jackson County Clay County Cass County Platte County EDC of Kansas City KC Board of Police Commissioners Downtown Council of Kansas City Greater Kansas City Chamber KCADC MARC Kauffman Foundation Public-Private Education Coalition (new) UMKC Metropolitan Community College Full Employment Council Think Big Partners Municipal Arts Commission Kansas City CVA Stowers Institute for Medical Research Arts Council of Metro Kansas City Civic Council of Greater Kansas City United Way of Greater Kansas City



There is also the potential to form Action Committees of the Strategic Coordination Council focused

on specific initiatives under AdvanceKC. These Action Committees would engage additional implementation representatives, including staff and practitioners from strategic-partner entities. The Practitioner Committee created for short-term implementation could then be perpetuated as an Action Committee under the Coordination Council.

The Strategic Coordination Council, supported by the AdvanceKC Coordinator and other EDC staff, would be charged developing, updating, and managing the Organizational Map and “master matrix” of Kansas City-focused strategic activities proposed in the AdvanceKC strategy.

Through the work of the Strategic Coordination Council, Kansas City has an opportunity to develop and promote a national best practice of public, private, and civic collaboration on community improvement. The City would also become a more effective partner to regional governments and organizations by instituting a sustainable framework to coordinate City-specific activities for integration into metro-wide initiatives.



Implementation Timelines The following timelines represent first-year activities for the AdvanceKC implementation cycle. Full five-year timetables are included in Appendix B of this report.

IMPLEMENTATION PARTNERS The following entities are listed in the Action Timelines corresponding to strategic implementation. It would be very difficult to accurately list every single supporting entity that could contribute to each implementation effort. Implied in the listing of supporting organizations is the fact that outreach will be made to all key City of Kansas City entities that can assist with implementation of specific efforts.

Abbreviation Partner AC Arts Council of Metro Kansas City

AD Kansas City Aviation Department

BPC Kansas City Board of Police Commissioners

BW BikeWalk Kansas City

CC Clay County

CCA Crossroads Community Association

CCKC Civic Council of Greater Kansas City

CDE Kansas City Community Development

CF Greater Kansas City Community Foundation

CVA Kansas City Convention and Visitors Association

DCKC Downtown Council of Kansas City

EDC Economic Development Council of Kansas City

EIC Educational Improvement Coalition (proposed)

FEC Kansas City Full Employment Council

FRB Federal Reserve Bank of Kansas City

GKCCC Greater Kansas City Chamber of Commerce

JC Jackson County

K-12 City of KC public school districts

KC City of Kansas City

KCADC Kansas City Area Development Council

KCATA Kansas City Area Transportation Authority

KCCC Kansas City Convention Center

KCFC Kansas City Film Commission

KCIC Kansas City Industrial Council

KCPA Kansas City Port Authority

KCPD Kansas City Police Department



Abbreviation Partner KCPL Kansas City Public Library

KCS Kansas City Southern

KCUMB Kansas City University of Medicine and Biosciences

KF Kauffman Foundation

KS Kessler Society of Kansas City

LCC Local chambers of commerce

LISC Greater Kansas City Local Initiatives Support Corporation

LSI Kansas City Area Life Sciences Institute

MAA Municipal Arts Commission

MARC Mid-America Regional Council

MCC Metropolitan Community College

PC Platte County

SI Stowers Institute for Medical Research

TBP Think Big Partners

UL Urban League of Greater Kansas City

UMKC University of Missouri, Kansas City

UW United Way of Greater Kansas City

ACTION TIMELINES KEY Implementation of AdvanceKC is anticipated to begin in the FOURTH QUARTER of 2012; the timelines in this Implementation Plan will reflect that initiation date.

• Strategic actions that take place in Year One of implementation are indicated by an italicized title and a GREY SHADED area in the timeline table.

• Actions/task NUMBERS correspond to their placement in the Strategic Plan.

• LEAD corresponds to the lead entity(ies) guiding implementation of that action and tasks.

• SUPPORT corresponds to the key entities that will assist/influence implementation of that action and tasks.

• STATUS refers to the existing dynamics of the action and tasks.2

o O = Ongoing action(s)

o E = Expanded/enhanced action(s)

o N = New action

2 In certain cases, status influenced that actions implementation phasing. If an action was ongoing, greater consideration was given to including it in the first year of implementation.



• COST refers to the potential COST RANGE for implementation of that particular action item.

o 1 = $0 to $10,000

o 2 = $10,000 - $25,000

o 3 = $25,000 - $50,000

o 4 = $50,000 - $75,000

o 5 = $75,000 - $100,000

o 6 = $100,000 - $150,000

o 7 = $150,000 - $200,000

o 8 = $200,000+

o n/a = Major cost that is beyond the purview of the Strategy

• Calendar YEARS and QUARTERS refer to the estimated period of initiation and duration of the action and tasks.

Cost assumptions have not been made for all components of AdvanceKC implementation. For example, major expenditures for “bricks and mortar” projects such as a Downtown Campus for the Arts, infrastructure upgrades across the City, refurbished parks and boulevards, and other significant costs would not be feasible to apply to the AdvanceKC implementation budget. It could create the misconception that AdvanceKC is a multi-billion dollar strategic program, when that is not the case. Many AdvanceKC actions have been incorporated from the City’s and other organizations’ strategic programs or existing initiatives like the Greater Kansas City Chamber’s Big 5 in order for AdvanceKC to serve as a strategic framework encompassing the most critical actions to position Kansas City for success. Resources for those efforts are either already secured or are being sought outside the context of AdvanceKC. However, there are certain efforts that could be resourced as a component of AdvanceKC implementation – or promote the strategy itself. These costs have been estimated as AdvanceKC activities. The budgets for the EDC have also been directly affected by AdvanceKC recommendations related to the City of Kansas City’s economic development programming.

At the beginning of each new year of the campaign, Market Street recommends that the City of Kansas City and its partners review past year success and challenges prior to finalizing the current year’s action plan. A variety of factors may require that individual action items be adjusted, particularly in the latter years of the campaign.

YEAR ONE TIMELINES One of the goals of AdvanceKC was to incorporate existing strategic efforts when possible if they were consistent with the research and feedback that informed the development of the plan. As such, a number of initiatives are included in AdvanceKC that reflect ongoing efforts that are being



implemented and have momentum. By jumping on these “moving trains,” AdvanceKC not only leverages resources and personnel being invested to move Kansas City forward, but provides the opportunity to integrate these efforts under a more coordinated framework aligned with new and enhanced AdvanceKC strategies.

In addition to strategies included in AdvanceKC, the First Year Action Timelines reflect implementation related tasks associated with the structure of the EDC, statutory redevelopment authorities, rollout and promotion of AdvanceKC, and other elements.

Action/Tasks Lead Support Sta-tus Cost

‘12 2013

Q4 Q1 Q2 Q3

Out

reac

h, O

pera

tions

, & G

over

nanc

e

Formalize and enhance the AdvanceKC Implementation Committee

Confirm with Steering Committee members their intent to serve on Implementation Committee

KC Multiple N

Determine additional members to add to Implementation Committee

Outreach to new members and confirm their participation

Hold first Implementation Committee meeting

Work with Practitioner Committee on initial implementation activities

Increase public awareness and support of the AdvanceKC process

Issue press release and hold press conference launching AdvanceKC

KC Multiple E

Enhance and promote the AdvanceKC website

Develop and launch AdvanceKC social media sites and add AdvanceKC section to KC MindMixer page

Develop Speaker’s Bureau presentation and hold discussion sessions with multiple KC constituency groups

Develop and distribute AdvanceKC promotional collateral 1




‘12 2013

Q4 Q1 Q2 Q3 Restructure EDC personnel, governance, and funding structures

Outreach to key local constituents to begin discussions of EDC restructuring

KC

Multiple

E

Assess potential to secure additional public and private funding commitments for EDC

KCADC, GKCCC

TBD

Formalize new EDC staffing structure

EDC KC

Begin enhancing/populating EDC’s Existing Business, Marketing, and Research departments

Create the statutory agency Consolidated Board

Work with City Attorney to confirm process for creation of Consolidated Board

KC Multiple E

Identify potential candidates for service on Consolidated Board

Seek resignations or follow procedures for replacing sitting statutory agency board members (Year 2)

Develop protocols for performance and processes of Consolidated Board

Secure placement of Consolidated Board in City code if necessary

Pursue enabling legislation for consolidated redevelopment agency option

Forge a coalition among KC’s Missouri counties to support the initiative

KC, EDC,

KCADC, GKCCC

CC, CCKC, JC, PC N

Outreach to other Missouri cities, counties, and regions to build support

1.0

Arts

and

Le

isur

e

1.1: INTEGRATE the findings and recommendations of the Task Force on the Arts into the AdvanceKC framework.

Continue supporting the work of the Task Force as it develops its strategic plan

KC

AC, CC, CCA, CF, CVA, DCKC, GKCCC, JC,

KCADC, KCFC,

E, N




‘12 2013

Q4 Q1 Q2 Q3

Ensure cultural tourism opportunities are integrated into the plan and CVA programming

LCC, MAA, PC, UMKC

Integrate planning and strategic development with the “America’s Creative Crossroads” program

1.2: SUPPORT next steps in the development of a University of Missouri, Kansas City (UMKC) Downtown Campus of the Arts.

Move forward with planning for a Downtown Campus of the Arts GKCCC,

UMKC

AC, CC, CCA, CF, CVA, DCKC,

GKCCC, JC, KC, KCADC, MAA,

PC

N

Ensure planning dovetails with the Mayor’s Task Force on the Arts

2.0

Busi

ness

Clim

ate

2.1: SUPPORT the implementation of priority recommendations from the City of Kansas City’s Special Committee on Small Business.

Ensure that implementation of the most impactful recommendations from the Committee is pursued aggressively and successfully

KC

CC, CCKC, CDE, DCKC, EDC,

GKCCC, JC, KF, LCC, PC, UMKC

E

Consistently engage small businesses that participated in the report to assess progress

Formalize operational systems so that process-improvements are sustainable

2.2: REVISIT the City of Kansas City’s incentives policy based on the dynamics of the AdvanceKC strategy.

Review the usage and efficacy of all existing incentives tools KC

CC, CCKC, CDE, DCKC, EDC,

GKCCC, JC, KCIC, KCPA, KF, LCC, LISC, PC, UMKC

E

3.0

3.1: CREATE a Kansas City Strategic Coordination Council.

Build public and private support for Council concept KC Multiple N

4.0

Infr

astr

uctu

re

Deve

lopm

ent

4.1: DEVELOP a research-supported list of Kansas City’s highest priority infrastructure projects for inclusion in a public funding referendum.

Conduct a research-supported analysis of the City of Kansas City’s infrastructure development needs

KC

AD, CC, CC, EDC, GKCCC, JC,

KCADC, KCATA, KCIC, KCPA, KCS, LCC, MARC, PC

E, N




‘12 2013

Q4 Q1 Q2 Q3

Outreach to local businesses and economic development professionals for perspective and input

4.2: SUPPORT the Bistate Innovation Team convened to propose strategies to leverage the Google Fiber network.

Proceed implementation of the Team’s recommendations

MARC, KCADC

CC, CC, EDC, GKCCC, JC, KC, KCIC, KF, LCC,

LSI, MCC, PC, SI, TBP, UMKC

N

Integrate with initiatives such as KCGigIdeas.com, the Gigabit Challenge, and others

Aggressively promote Google Fiber availability to national prospects n/a

5.0

Inno

vatio

n an

d En

trep

rene

ursh

ip

5.1: DEVELOP an Action Plan for an entrepreneurial “ecosystem” in Kansas City to best foster local enterprise creation.

Continue Big 5 efforts to make develop an entrepreneurial action plan for Kansas City

GKCCC, KF

EDC, KC, KCADC, KCUMB, LSI,

MARC, MCC, SI, TBP, UMKC

E, N

Leverage feedback and data from Community Conversations to inform Action Plan development

Continue outreach to leaders and community stakeholders informing them on the progress of the effort.

Integrate arts entrepreneurship (Action 5.2) into the Big 5 effort.

Formalize and launch the plan

5.2: COORDINATE a program to foster arts-based entrepreneurship in Kansas City.

Integrate the effort into Action 5.1

AC, MAA

CCA, CCKC, CVA, DCKC, EDC,

GKCCC, KC, KF, MCC, UMKC

E

Leverage Artist INC as the core of the arts entrepreneurship strategy.

Expand Artist INC to include a multi-week business-planning course, tutorials on insurance and law issues, and others

n/a




‘12 2013

Q4 Q1 Q2 Q3

6.0

Mob

ility

6.1: CONSTRUCT a modern streetcar line in Kansas City as the first link in a broader intermodal transportation network.

Move forward with resourcing, planning, and constructing a modern streetcar line in Downtown Kansas City.

KC, KCATA

AD, CC, CC, DCKC, EDC, GKCCC, JC,

KCADC, KCIC, KCPA, KCS, LCC,

MARC

N

Consider crafting station-area overlay plans to inform land use and development at trolley stops.

Secure full funding for starter line n/a

7.0

Publ

ic S

afet

y

7.1: CONTINUE to emphasize the importance of public safety to economic development outcomes in Kansas City.

Share the results of business surveys identifying crime as the City’s top competitive issue as an example of public safety’s impact on job growth.

KCPD, KC

BPC, CC, CVA, DCKC, GKCCC, JC, LCC, MCC, PC, UL, UMKC,

UW

O, E

Ensure that citizens are aware of their roles in improving public safety.

9.0

Targ

et S

ecto

r Sup

port

9.1: DEVELOP research-supported Action Agendas for Kansas City’s priority target business sectors.

Research an inventory of existing City of Kansas City businesses to identify priority employment sectors

EDC

AC, AD, CVA, FEC, FRB,

GKCCC, K-12, KC, KCADC, KCFC, KCIC, KCPA, KCS,

KCUMB, KF, LCC, LSI, MAA,

MARC, MCC, SI, TBP, UMKC

E

Assess the presence and capacity of target-supportive resources

9.3: SUPPORT implementation of the KC Rising strategy.

Coordinate with KCADC to optimize EDC prospect management processes

EDC KCADC E

Seek ongoing feedback on management of KC’s portfolio of sites/buildings, incentives, workforce capacity, and other issues



AdvanceKC Implementation Costs As was noted previously, the proposed budget for the EDC detailed earlier in this report is also impacted by AdvanceKC recommendations. In terms of programmatic, collateral, and other associated staffing costs that have been estimated as components of implementation, the following represent these projections. The average of the potential cost ranges have been taken for these estimates. Projected salaries for the educational improvement staff include benefits and are projected to grow at a 3 percent annual rate.

AdvanceKC Implementation Costs Action Line Item Year 1 Year 2 Year 3 Year 4 Year 5 TOTAL

n/a Develop and distribute AdvanceKC promotional collateral $5,000 $5,000

3.2 Launch program and curriculum encouraging inter-racial dialogue and awareness-building. $37,500 $37,500

8.1

Brand education improvement coalition and create marketing program and materials $62,500 $25,000 $20,000 $107,500

Hire Executive Director and staff for educational improvement coalition $175,000 $180,250 $185,658 $540,908

8.2 Formalize and launch the multi-media campaign to retain and attract talent to Kansas City* $62,500 $62,500 $62,500 $187,500

TOTAL $5,000 $300,000 $267,750 $305,658 $878,408 *Costs above what KCADC budgets for talent attraction

The cost for certain non-brick-and-mortar AdvanceKC activities that will not be reasonably subsumed by City or partner budgets is estimated at $878,408 over the five-year AdvanceKC implementation timeframe. However, the vast majority of AdvanceKC implementation costs will be appropriated under the budgets of the governments, organizations, and institutions charged with activating these programs and initiatives. In multiple cases, strategies included in AdvanceKC are either already budgeted or in the process of being integrated into a budget or resourced by the City of Kansas City or an implementation partner.

The AdvanceKC Implementation Committee and, later, the Kansas City Strategic Coordination Council will be charged with discussing strategic budgeting and capacity issues as they meet to oversee implementation progress on AdvanceKC and, in the case of the Council, the full breadth of Kansas City-based strategic activity.



AdvanceKC Performance Metrics In order to assist the City of Kansas City with assessing their performance related to implementation of the AdvanceKC strategy, Market Street has projected a number of performance expectations related to the effective implementation of the plan. All metrics are calculated and projected at the City level to reflect the priority geography of the AdvanceKC plan.

Performance tracking is an important concept because it assumes that trends will improve if the recommendations in the strategy are successfully advanced. This distinction is evident by looking at the “goal versus trend” column in the following table. The trend figure represents the five-year performance of the indicator in Kansas City if current trends continue. The goal figure represents the benefit that Kansas City can accrue through effective implementation. As should be evident, these trends are holistic and cover multiple performance dynamics in Kansas City. This is purposeful; Market Street’s philosophy is that economic development is a holistic enterprise that depends on the improvement of Kansas City’s “product” that is offered to existing and prospective businesses and talent. Because the inputs into the development of this product are holistic, so are the measurements tracked to assess how Kansas City’s product-development is progressing.

Market Street arrives at our projections by looking at recent trends, calculating a combined annual growth rate (CAGR) of these measures, and then estimating the incremental improvement that will occur in these trends if AdvanceKC is effectively implemented. We err on the side of being too conservative, so our projections in many cases could be below the actual performance. But the Great Recession proved more than anything else that today’s economy is very volatile and cannot be predicted with absolute certainty.

Metrics are projected both in terms of performance and also activity. Performance metrics assess numerical results of implementation, while activity metrics simply assess whether a particular strategic recommendation was accomplished or completed.

The column marked “Snapshot figure” in the Performance Metrics table refers to the figure that was included in the AdvanceKC Competitive Snapshot deliverable.

In some cases, data needed to track performance is not collected for a particular indicator. In this case, the column is noted by “figure needed.” A source for this particular indicator will need to be identified or – if a source is evident – the data must begin to be collected.



PERFORMANCE METRICS

ACTIVITY METRICS

Strategy Completion Year

Arts and Leisure

Development of Downtown Campus for the Arts 2017 Creation of park use assessment 2014 Repurposing of an existing park as an "events park" 2017 Business Creation

Implementation of citywide customer service initiative 2013 Creation of Buy Local KC campaign 2014 Launch of non-profit small-business study and strategy 2015 Review of all existing incentives tools 2013 Creation of new incentives policy 2014 Establishment of an Ombudsman Program for land development 2015

Connectivity and Collaboration

Creation of Strategic Coordination Council 2014/2015 Creation of strategic Organizational Map 2015 Development of inter-racial dialogue and awareness program and curriculum 2017

Trend Goal Raw PercentChange Change

Total population 459,787 (2010) 0.4% 10 yr. 473,138 478,123 4,985 218,336 47.5% CensusNet job growth 467,217 (March 2011) -0.8% 10 yr. 445,746 503,289 57,543 36,072 7.7% QCEWAverage annual wages $46,410 (2011) 1.5% 2 yr. $49,931 $51,398 $1,467 $13,671 36.2% QCEWPer capita income $37,258 (2009) 0.8% 3 yr. $41,518 $45,882 $4,364 $9,888 27.5% CensusPoverty rate 20.4% (2010) 0.8% 10 yr. 26.1% 20.0% -6.1% CensusChild poverty rate 29.3% (2010) 0.9% 10 yr. 35.7% 32.3% -3.4% CensusPct. of adults without a High School Diploma 13.0% (2010) -0.2% 2 yr. 11.6% 10.1% -1.6% CensusLabor force participation rate 76.9% (2010) -0.7% 10 yr. 72.2% 80.9% 8.7% Census/LAUSPct. of eligible homes on Google Fiber network - - tbd

Number of patents issued 136 (2010) 6 pats 10 yr. 195 216 21 80 58.5% US PTONumber of off-street bike lane miles - - City of KC

Average annual property crime rate/100,000 pop. 5,571 (2010) 1.2% 1 yr. 6,056.2 5,386.4 -669.9 -185 -3.3% FBIAverage annual violent crime rate/100,000 pop. 1,140 (2010) -5.7% 4 yr. 753.4 635.0 -118.4 -505 -44.3% FBIPopulation, ages 25-34 75,490 (2010) 0.4% 10 yr. 77,736 81,665 3,929 5,998 7.9% CensusPct. of adults with Bachelor's degree or higher 29.9% (2010) 0.1% 2 yr. 30.6% 34.6% 4.0% CensusPercentage of 3-4 year olds enrolled in Pre-K - - tbdAverage ACT Composite Score, KCPS 16.2 (2010) -0.4% 6 yr. 16.0 16.7 0.6 0.5 2.8% MO DESEGraduation rate, Kansas City School District 57.3% (2010-2011) -1.6% 7 yr. 47.5% 54.8% 7.3% MO DESEPct. of Pop. 18-24 Enrolled in College or Grad School 42.9% (2010) 1.1% 10 yr. 45.7% 46.8% 1.1% CensusPct. of 100+ employee cos. visited through BEST 95% - - EDCfigure needed

figure needed

-3.0%

11.5%3%

4.7%

Annualized Avg. (%/term) 2017

Goal v. Trend

Indicator Snapshot Figure Existg/Potentl Source

-0.4%3.0%

4.0%

figure needed

figure needed



Strategy Completion Year

Infrastructure Development

Development of research-supported list of highest priority infrastructure projects 2013

Launch of campaign promoting Google Fiber project 2013/2014

Innovation and Entrepreneurs

Creation of a coordinated entrepreneurial strategy 2013/2014 Addition of multi-week business planning course to Artist INC 2015 Development of a permanent space for artist entrepreneurs 2016

Mobility

Construction of a modern streetcar line in Downtown Kansas City 2015 Development of new off-street bike trail in KC 2016

Public Safety

Implementation of predictive policing program 2015

Talent Development and Education

Launch of public-private educational improvement coalition 2015/2016 Launch of expanded talent retention/expansion program 2015/2016

Target Sector Support

Identification of priority employment sectors through inventory of businesses 2014 Creation of list of strategic actions to support target growth within the City 2015 Optimization of KC BEST based on new sectors 2014/2015

Urban Land Use and Revitalization

Inventory of land use plans developed since FOCUS launch 2014/2015 Application of updated FOCUS "plan regions" to KC's incentive policy 2015



CONCLUSION The AdvanceKC process offers the City a chance to unify behind a plan that holds tremendous benefit for current and future residents and businesses. While the plan is not a magic bullet to address every Kansas City issue and opportunity, it can nevertheless serve as a catalyst to initiate conversations and collaborations on the future of a great American city that can be even greater. This is especially true because many people have commented in public input throughout the course of AdvanceKC that the City has a great opportunity right now to achieve great things and disrupt the status quo in positive ways. Stakeholders are bullish on this Mayoral administration and this City Manager. They feel good about the composition of the City Council. They think now might the time for the City to reach much greater heights.

This Implementation Plan lays out a process for how the City of Kansas City can more effectively structure, staff, and fund its economic development activities. While much depends on leveraging relationships with key local, regional, and state partners, a refocused and repurposed EDC can serve as a more dynamic and successful tool to market and grow Kansas City’s economy, creating good jobs with good wages that can raise the quality of life of all the City’s residents.



APPENDIX A: ECONOMIC DEVELOPMENT CORPORATION BUDGET ANALYSIS

Methodology Market Street was provided detailed budgetary information by the Economic Development Corporation of Kansas City to assist with the development of this Implementation Plan. Budget data reflected multiple operational years and provided significant line-item detail for both revenues and expenditures. This data was leveraged to present potential budgetary scenarios for a restructured and reprioritized EDC in response to implementation of the AdvanceKC strategy. In order to develop these projections, Market Street utilized budget information from a ten-year period of EDC operations (2002-2012).

Budgetary projections describe two different contingencies:

1) The EDC continues to receive fee-based revenue from all its administered statutory authorities, and

2) TIF fees are diverted to the City of Kansas City’s general fund as opposed to the EDC’s accounts.

Underlying these potential futures are revenue and expenditure projections described in detail below. Projections were made according to three different growth scenarios:

• HIGH: EDC moves aggressively away from use of statutory tools and focuses on holistic economic development programming.

• MEDIUM: EDC moves moderately away from use of statutory tools and focuses on holistic economic development programming.

• LOW: EDC moves negligibly away from use of statutory tools and focuses on holistic economic development programming.

REVENUE PROJECTIONS Future revenue projections for the EDC exclude funding received to administer and carry-out the mission of the Neighborhood Stabilization Program (NSP). The NSP (and related RebuildKC program) is set to sunset in 2013; any remaining unused funds must be given back to the federal government. Since the program represents a large one-time gain, NSP monies were subtracted from both the revenue and costs of the EDC to account for the fact that this program will not be operating past 2013.



Five and ten year compound annual growth rates (CAGR) were calculated for three contingencies: 1) actual EDC receipts; 2) receipts minus NSP program revenue; and 3) receipts minus NSP and TIF revenue (assuming a scenario where TIF fees were received into the City’s general fund). The following are the CAGRs for EDC revenues from 2002 to 2012 based on these three contingencies:

• Actual EDC revenues: o CAGR (10 year) 7.4% o CAGR (5 year) 8.8%

• EDC revenues excluding NSP funds: o CAGR (10 year) 3.9% o CAGR (5 year) 1.8%

• EDC revenues excluding NSP funds and TIF fees: o CAGR (10 year) -3.2% o CAGR (5 year) -6.6%

Based on these CAGRs, the following rates were then utilized to calculate the EDC’s revenue projections. Market Street chose to calculate the EDC’s budget according to scenarios to reflect the fact that use of statutory redevelopment tools is expected to decrease following AdvanceKC’s greater emphasis on core economic development functions such as existing business retention/expansion and business attraction. However, this decrease will be gradual as outstanding loans and active TIF projects reach the end of their cycles.

• HIGH – Revenue Growth is assumed to follow a ten-year compound annual growth trend of negative (-) 1.0 percent. This is assuming a significant reduction in use of statutory tools.

• MEDIUM – Revenue growth is assumed to follow a ten-year compound annual growth trend of 1.25 percent. This is assuming a moderate reduction in use of statutory tools.

• LOW – Revenue growth is assumed to follow a ten-year compound annual growth trend of 2.5 percent. This is assuming a negligible reduction in use of statutory tools.

EXPENDITURE PROJECTIONS Cost projections assume that the EDC makes all staffing changes recommended in the Implementation Plan in 2013. Staffing expenditures after the year 2012 do NOT include any costs related to administration of the NSP or ReBuild KC programs, although some of these responsibilities will be subsumed by continuing staff. Market Street also eliminated all performance bonuses from the EDC salary profiles. Multiple stakeholders said that performance bonuses were a key reason why EDC staff over-emphasized the use of statutory incentive tools. To compensate, average salaries have been increased for all EDC positions in fiscal year 2013 forward.

The following CAGR figures reflect EDC expenditures from 2002 to 2012. Adjustments were made for total expenditures allowing for the subtraction of NSP monies, as well as in the “Other Costs” column.



• Actual EDC Expenditures o CAGR (10 YR) 8.2% o CAGR (5 YR) 12.7%

• Adjusted EDC Expenditures (Less NSP-related expenditures) o CAGR (10 YR) 2.8% o CAGR (5 YR) 1.9%

• Staff Costs o CAGR (10 YR) 4.0% o CAGR (5 YR) 0.5%

• Adjusted Other Costs (Less NSP-related expenditures) o CAGR (10 YR) 0.6% o CAGR (5 YR) 3.9%

Staff costs can be extremely variable for an economic development organization based on programmatic need and capacity and available revenue to support staff expansion. Even so, Market Street felt there would be benefit to projecting what the EDC’s staff costs might be in the AdvanceKC program years and beyond based on three potential growth scenarios. Expenses are inclusive of salary and benefits. These are:

• HIGH – Staff costs are assumed to follow a ten-year compound annual growth trend of 3.0 percent. This is assuming relatively aggressive expansion of EDC program staff capacity.

• MEDIUM – Staff costs are assumed to follow a ten-year compound annual growth trend of 1.5 percent. This is assuming a moderate level of program staff capacity growth.

• LOW – Staff costs are assumed to follow a ten-year compound annual growth trend of 0.5 percent. This is assuming a negligible amount of EDC program staff growth.

While a large portion of the budget, staff costs do not represent the only costs incurred by the EDC. “Other Costs” such as rent, equipment leases, and acquiring professional services are also incurred by the EDC, however, these costs follow different growth trends compared to the EDC’s staff costs, as can be seen by the CAGRs listed previously.

Thus, the following growth rates were used to project the EDC’s Other Costs:

• HIGH – Other costs are assumed to follow a ten-year compound annual growth trend of 5.0 percent. This is assuming fairly aggressive expansion of EDC personnel and programming.

• MEDIUM – Other costs are assumed to follow a ten-year compound annual growth trend of 3.5 percent. This is assuming fairly moderate expansion of EDC personnel and programming.

• LOW – Other costs are assumed to follow a ten-year compound annual growth trend of 1.5 percent. This is assuming fairly negligible expansion of EDC personnel and programming.



OVERALL BUDGET Year-to-year, the EDC budget is quite variable, both on the receipts and expenditure sides. Often, the EDC would show a budget surplus at the end of a fiscal year and other times would experience a deficit. The EDC follows contractual protocols to determine how to proceed with either budgetary surpluses or deficits.

For the AdvanceKC program years and beyond, Market Street made revenue and expenditure projections based on the HIGH, MEDIUM, and LOW scenarios described previously. Then we subtracted expenses from revenues to determine if the EDC would have a budgetary surplus or deficit. Quite obviously, removing TIF fees from the EDC budgetary stream and returning them to the City of Kansas City’s general fund had a dramatic effect on the EDC budget, causing significant deficits. If this contingency was to be followed – and the administration of statutory authorities remained with the EDC – a replacement source of revenue for TIF fees would have to be sourced. These monies could either come from the City of Kansas City, private-sector partners, state and federal governments, foundations and philanthropies, program revenue, and other sources.

Lastly, Market Street projected what the City of Kansas City’s investment to the EDC budget during the AdvanceKC program years would be if it increased its funding from the current level of roughly 18 percent to 20, 30, 40, and, ultimately, 50 percent of the total EDC budget. Importantly, expenditures used to calculate the City’s investment did not take into account the potential loss of TIF fee revenue. If this were to occur, the City of Kansas City’s EDC investments could potentially be much higher.

Existing and Proposed Budgets Market Street received from the EDC detailed information on annual budgets by revenues and expenditures, including specific data related to the agency as a whole and its administered statutory authorities. The EDC also provided information on staff salaries and estimates of how staff’s time was apportioned to the different statutory bodies. Staff was also very forthright and helpful in answering a number of questions about the EDC’s staff responsibilities and particular budgetary nuances.

Based on all the information received, Market Street developed a draft budget for the next five years of EDC operations. Principal changes to the current budget are primarily focused on restructured staffing and enhancement of the EDC’s marketing function. Assumptions were made – to be detailed later in this report – about trends in development fee receipts and alternative sources of funding if the use of statutory redevelopment incentives diminishes.

EXISTING BUDGET In the fiscal year 2011-2012 budget, the EDC reports expenditures of $7,193,048.77 and revenues of $6,224,079.22. The result is a net operating deficit of -$968,969.05. TIF fees are by far the largest



source of EDC revenue in the current fiscal year and have enjoyed steady growth over the history of the agency. Currently, administrative and “other” costs account for a large portion of expenditures while outlays for business development functions have decreased.

The following graph shows a ten-year history of the EDC budget, from 2002 to 2012.

TOTAL EXPENDITURES AND REVENUE, 2002-2012

Source: Economic Development Corporation of Kansas City

After running surpluses for a number of years. The EDC has only recently seen its expenditures drop below its total revenue. The huge variations in expenditures and receipts in recent years is clarified by the following chart.

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

$7,000,000

$8,000,000

$9,000,000

$10,000,000

$11,000,000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Total - Expenditures Total - Revenue



TOTAL REVENUE BY SOURCE, 2002-2012


According to the EDC, the recent spike in “Other Revenue” is directly attributed to the Neighborhood Stabilization Program (NSP) grant the agency received. This line item includes revenues generated by the sale of NSP properties and must be used for future program expenses as mandated by the federal grant program. Per the EDC, “These are not net revenues to the EDC, rather they are to be used only for program expenses and any unused funds must be returned to the federal government when the program ends in 2013.” The NSP funds are also categorized as “intergovernmental transfers.”

As will be seen shortly, the NSP program also resulted in a sharp rise in expenses corresponding to approximately $3 million in rehabilitation, disposition, and holding costs of the NSP properties.

The following chart shows how dependent the EDC has become on revenue from TIF fees. These fees accounted for nearly 50 percent of the agency’s budget in 2011-2012. Substituting “intergovernmental transfers,” the investment to the EDC from the City of Kansas City budget is roughly 10 to 15 percent of the agency’s total revenues.

$0

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Public Revenue TIF Fees Other Private/Earned Income Other Revenue



REVENUE BY SOURCE (PERCENT OF TOTAL)


This next chart shows EDC expenditures over the same ten-year period. As noted, the spike in “other costs” in 2010-12 was primarily due to the NSP program.

EXPENDITURES BY FUNCTION, 2002-2012


41.0

%

34.3

%

27.0

%

36.5

%

24.5

%

25.7

%

26.4

%

19.6

% 39.0

%

40.2

%

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%

33.8

%

29.5

%

37.9

% 36.5

%

49.0

%

50.0

%

50.3

%

59.4

% 38.4

%

35.2

%

48.5

%

19.0

%

20.5

%

12.9

% 17.9

%

17.7

%

15.8

%

15.8

%

12.8

%15.7

%

22.2

%

14.9

%

16.9

%

18.8

%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Public Revenue TIF Fees Other Private/Earned Income Other Revenue

$0

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

$7,000,000

$8,000,000

$9,000,000

$10,000,000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012Loan Corp BRE Project DevelopmentLCRA Port Authority TIFDESA Other Costs (Including Admin)



According to the EDC, the dramatic increase in Project Development expenditures in 2007 was due to a reorganization of the EDC that added new project staff. Subsequently, some of these staff were then refocused on existing business activities to get more “feet on the street.” This reallocation of staff to BRE and away from project development is shown more clearly in the following chart that features the EDC’s expenditures by department. The move of the Port Authority from under the EDC’s administrative umbrella is shown in the elimination of that agency’s line item in the 2012 budget.

EXPENDITURES BY DEPARTMENT (EXCLUDING OTHER COSTS), 2002-2012


The EDC noted one important caveat to the preceding chart. Per the agency, “The financial statements of the EDC and the various statutory agencies under its umbrella are NOT consolidated. The LCRA department as shown within the EDC financials only includes EDC expenditures that are allocated to that agency. It does not include the revenues and expenses generated by that agency in their project work.” According to the EDC, the preparation and monitoring of statutory authority budgets is a cooperative effort between the EDC Accounting Department, the Executive Directors of the statutory agencies, and the various boards or commissions. But the statutory authority budgets are not reflected in the EDC financials other than direct costs assumed by the EDC.

Shifting our focus to the EDC’s personnel costs, Market Street attempted to determine the actual costs accrued to administer each statutory authority. This was done to presage what the EDC budget might look like if statutory redevelopment tools were deemphasized in future agency activities. However, while the EDC reports that many of its non-authority-affiliated staff work on projects to varying extents that involve the statutory agencies, this staff time is not “billed” to each agency for the purposes of compensation. Per the EDC, “All salary expenses are paid by the EDC as every employee is an employee of the EDC and not the statutory agency. Salary expenses are recorded within the EDC

$0.00

$500,000.00

$1,000,000.00

$1,500,000.00

$2,000,000.00

$2,500,000.00

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Loan Corp BRE Project Development LCRA Port Authority TIF DESA



financial statements based upon the employee’s ‘home’ department. In order for an agency to receive a direct allocation as a home department, an employee must be dedicating 100% of their time to that agency. An example of this would be the Executive Director of TIF.”

With that in mind, the following charts reflect EDC employee compensation by function and by statutory agency. Because employees dedicate staff time to various statutory authorities but this time is not reported for salary purposes unless the employee is affiliated with that agency, the percentages in these charts do not reflect the actual personnel cost of administering these agencies. Market Street recommends that, in the future, the EDC clarifies, formalizes, and optimizes the assignment and recording of staff time as it relates to its administered statutory authorities so these functions are much more transparent and trackable.

Employee Compensation by Function

Source: City of Kansas City Economic Development Corporation

The extent to which TIF fees support the staffing of the entire EDC can be seen clearly in the previous chart. While TIF fees comprise the majority of EDC funding, staff costs for administering the authority are well below that threshold. Even so, costs to directly administer the TIF authority are greater than every function but administration and “other.” As noted, however, the fact that multiple departments work on TIF projects – including accounting staff – the percentage that TIF administration comprises of the total EDC staff costs is far greater than shown in the organization’s financial statements.

$0

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$3,500,000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Loan Corp BRE Project Development LCRA Port Authority TIF Other (Incl. Admin)



Compensation by Statutory Agency, 2002-2012

Source: City of Kansas City Economic Development Corporation

The prior chart again shows the impact to the EDC’s budget in 2007 when a reorganization of the agency resulted in a much greater emphasis on project development and a reduced focus on BRE activities. In 2012, the Port Authority’s exit from the EDC’s administrative umbrella is shown in the elimination of the authority’s line item from that year’s budget.

Below is a table showing the EDC’s compensation history from fiscal year 2007-08 to 2011-12. Compensation has been consistent despite the fact that the number of staff has been slightly variable from year to year. The EDC explains that salary costs have not varied much year to year because the City of Kansas City has instituted a wage freeze for the past three years.

EDC COMPENSATION HISTORY, 2007/08-2011/12

Source: EDC of KC

Staff incentives for securing and completing incentivized projects are roughly 10 percent of the EDC’s compensation expenditures. Market Street believes that policy should be terminated and is counterproductive to quality economic development.

$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

$1,400,000

$1,600,000

$1,800,000

$2,000,000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Loan Corp BRE Project Development LCRA Port Authority TIF

FY # STAFF SALARY INCENTIVE BENEFITS TOTAL

2007-08 32 $2,136,542 $252,469 $597,253 $2,986,2642008-09 31 $2,149,257 $277,751 $606,752 $3,033,7602009-10 32 $2,214,550 $273,802 $622,088 $3,110,4402010-11 33 $2,280,507 $287,124 $641,908 $3,209,5392011-12 33 $2,131,094 $218,323 $587,354 $2,936,771



PROPOSED BUDGET By the EDC’s own admission, the financial relationship between the EDC and its various statutory agencies is very complex. To a certain extent, this complexity is a result of the EDC’s genesis as a tool for administrative consolidation of the City of Kansas City’s redevelopment instruments.

In preparing a draft budget for a restructured EDC, Market Street made certain key assumptions based on the de-emphasis of statutory incentives that has been the preferred recommendation of AdvanceKC stakeholders and the Steering Committee. While a number of positions dedicated to administration of statutory authorities have been retained based on the realities of the EDC’s current obligations, it is Market Street’s belief that the EDC will gradually replace administrative staff with program staff as the use of statutory incentives diminishes over the coming years. While this may not reduce overall personnel expenses, it would nevertheless affect program dynamics and costs.

To reflect the variability of future revenues and expenditures based on varying degrees-of-use of statutory incentives, Market Street has calculated different budgetary scenarios for the EDC going forward. These scenarios also reflect the actual loss of Neighborhood Stabilization and ReBuild KC funds in 2013 as well as the potential to funnel TIF fees through the City’s general fund as opposed to the EDC. This decision will be made by the Steering Committee.

The first chart below reflects actual EDC revenue from 2002 to 2012 and projected revenue for the AdvanceKC implementation years of 2013-17 and the years 2018-2022. Revenue data does not include monies from the Neighborhood Stimulus Program.

EDC Total Revenue (Minus NSP)

Source: EDC of KC; Market Street Services



The variability of EDC revenue and the impact of the three growth scenarios is seen clearly in the graph above. The HIGH growth scenario relative to revenue implies an aggressive move by the EDC away from the use of statutory incentive tools.

The following graph shows the same revenue trends from 2002 to 2012, but then presumes that TIF fees will be deposited in the City of Kansas City’s general fund as opposed to the EDC’s coffers. These assumptions were made as a consideration of a scenario that certain stakeholders called for; namely, the complete withdrawal of the EDC from managing TIF funds. While the year-to-year decrease in revenues from 2012 to 2013 when TIF fees are removed is dramatic, the EDC’s receipts stabilize from that point forward based on the various growth scenarios.

EDC Total Revenue (Minus NSP and TIF)


Staff expenditures are detailed in the following graph. Wages have been flat in recent years because of a City of Kansas City hiring freeze. Total staff salary expenditures declines from 2012 to 2013 because Market Street is recommending a reduction in total number of EDC staff and is also proposing that EDC’s salary bonuses be eliminated. Multiple stakeholders said that bonuses paid to EDC staff based on successfully funded redevelopment projects biases them towards the use of statutory incentives and prevents the EDC from focusing on a more holistic economic development



program. Market Street increased EDC staff’s base salaries to reflect the elimination of sales incentives.

“Other Costs” are reflected in the graph following the staff expenditure graphic. These Other Costs include such non-salary expenses such as rent, equipment leases, and acquiring professional services. However, costs related to the temporary Neighborhood Stabilization Program have been removed from this chart to normalize the budget trends.

In the case of both staff and “other” costs, the HIGH growth scenario reflects an aggressive expansion of EDC staff and programs away from the use of statutory incentives.

EDC Total Staff Expenditures




EDC Total “Other Cost” Expenditures (Minus NSP-related expenditures)


Adding staff and “other cost” expenditures results in the presentation of the EDC’s total expenditures as reflected in the following chart. The growth scenarios in this graph acknowledge the different combined annual growth rates (CAGRs) of staff and “other” costs by leveraging different growth projections based on the HIGH, MEDIUM, and LOW scenarios.



EDC Total Expenditures (Minus NSP-related expenditures)


The table on the next page aggregates all revenues and expenditures together and projects potential budget surpluses or deficits for the EDC based on the AdvanceKC program years and beyond. Allowing for the redirection of TIF fees to the City of Kansas City general fund as opposed to the EDC account clearly results in significant EDC budget deficits. If this contingency were to occur, alternative sources of funding would need to be identified. These could include increased City investments, private-sector donations, government grants, program income, foundation or philanthropic donations, or other sources.

As can be seen, the HIGH growth scenario (aggressive movement away from use of statutory incentives towards more holistic economic development programs) results in greater budget deficits over time. This further highlights the need to identify sources of revenue to replace redevelopment project fees.



AdvanceKC Budget Scenarios


Market Street also wanted to determine what the City of Kansas City’s investment might be if it increased its total funding percentage of the EDC’s budget. To do this, it was first necessary to look at the City’s funding trends to the EDC and the existing percentage City funds comprise of the EDC budget. These data can be seen in the following table.

EDC Budget Investments: TIF Fees vs. City of Kansas City General Fund

Source: EDC of KC

Market Street then extrapolated different City of Kansas City funding totals to the EDC budget based on the HIGH, MEDIUM, and LOW growth scenarios. The results of these calculations are seen in the following table. Again, it should be noted that these figures do not reflect the potential loss of revenue if TIF fees were removed from the EDC budget. In this case, the City of Kansas City’s overall investment could potentially be higher.

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012$3,275,961 $3,819,299 $4,206,943 $4,403,451 $4,122,075 $3,942,190 $4,202,224 $4,206,032 $4,566,049 $4,657,330 $4,326,401

Amount $1,025,000 $1,057,900 $1,515,464 $1,699,500 $1,800,000 $2,045,000 $2,183,500 $2,895,818 $2,539,422 $3,679,966 $3,018,000% of budget 31.3% 27.7% 36.0% 38.6% 43.7% 51.9% 52.0% 68.8% 55.6% 79.0% 69.8%

Amount $1,036,733 $731,662 $828,496 $1,446,065 $900,000 $1,050,000 $1,145,000 $920,000 $845,000 $845,500 $815,000% of budget 31.6% 19.2% 19.7% 32.8% 21.8% 26.6% 27.2% 21.9% 18.5% 18.2% 18.8%

TIF Fees

City of KC General Fund

Total Expenditures (minus NSP)



EDC Funding Scenarios, AdvanceKC Program Years: City of Kansas City Investments


The expenditures projected in the previous table can help to inform City of Kansas City officials and the general public of potential fiscal requirements of an increased funding commitment to EDC operations. As the use of statutory incentives is expected to diminish with the repurposing of the EDC through the AdvanceKC plan (as reflected in the HIGH growth scenario), replacement sources of revenue will need to be found. This is especially true if revenue projections for the HIGH scenario are taken into account. Revenues are projected to decrease as the EDC moves away from its current emphasis on the use of statutory incentives.

Ultimately, the actual EDC year-to-year budgets will be calculated and projected based on the staffing and programmatic dynamics occurring related to AdvanceKC implementation. While Market Street has attempted to project what these costs might be, actual expenditures and revenue streams will likely vary based on what is an increasingly volatile and unpredictable national and global economy. However, repurposing the EDC to reflect a more holistic economic development organization will enable the agency to make Kansas City a more competitive location for jobs, investment, and talent.



APPENDIX B: ACTION TIMELINES FOR FIVE-YEAR ADVANCEKC IMPLEMENTATION CYCLE



APPENDIX C: ECONOMIC DEVELOPMENT IN MISSOURI Market Street reviewed the economic development models that are allowable per the state’s code of ordinances. The following profiles detail the potential statutory development tools and agencies that are supported by Missouri law.

Authorities, Boards, and Commissions

LAND CLEARANCE FOR REDEVELOPMENT AUTHORITY (CHAPTER 99.300-99.660) Land Clearance for Redevelopment Authorities are utilized to combat blighted, deteriorated, and deteriorating areas in Missouri. In order to adopt the enabling ordinance, the municipality must identify one or more blighted or insanitary areas and determine that the redevelopment of such an area or areas is necessary in the interest of the public health, safety, morals, or welfare of its residents. Powers granted to LCRAs include, but are not limited to, the preparation of redevelopment and urban renewal plans, arrangement of contracts for furnishings or repairs in connection with land clearance or urban renewal projects, the ability to borrow money, and to apply for other financial assistance.

Board Requirements: If the resolution or ordinance adopted is one approving the exercise of powers hereunder by a land clearance for redevelopment authority, the mayor shall appoint a board of commissioners of such authority…

TAX INCREMENT FINANCING COMMISSION (CHAPTER 99.800-99.865) The Real Property Tax Increment Allocation Redevelopment Act enables the municipality to create the Tax Increment Financing Commission which is empowered, subject to the approval of the governing body, to exercise the powers enumerated in the act with the exception of final approval of plans, projects, and designation of redevelopment areas. Powers range from the ability to approve redevelopment plans and projects pursuant to notice and public hearing requirements to charging and collecting fees, rents, and other charges for building use. Along with these highlighted powers, the Real Property Tax Increment Allocation Redevelopment Act sets forth the mechanisms to freeze property taxes, payment schedules related to the disbursal of payments in lieu of taxes.



Board Requirements: Prior to adoption of an ordinance approving the designation of a redevelopment area or approving a redevelopment plan or redevelopment project, the municipality shall create a commission…

DOWNTOWN ECONOMIC STIMULUS AUTHORITY (CHAPTER 99.915-99.980) In order to adopt the enabling ordinance, the governing body must find that it is in the interest of the public to consider the establishment of a development area, that the development would be in the interest of the public health, safety, morals or welfare of residents, and that the development area can be renovated through a series of one or more development projects. Downtown Economic Stimulus Authorities are given the following powers among others enumerated under the law: the preparation of development plans and development projects to be considered at public hearings, to carry out development plans and development projects adopted by ordinance, acquire land or real or personal property necessary and incidental to a development project, and clear any area by demolition.

Board Requirements: Each authority created pursuant to section 99.921…shall be governed by a board of commissioners…

PLANNED INDUSTRIAL EXPANSION AUTHORITY (CHAPTER 100.320) A Planned Industrial Expansion Authority (PIEA) can be created through the passage of an ordinance so long as the City finds that one or more blighted, insanitary or undeveloped industrial areas exist and that the development of such area or areas is necessary in the interest of the public health, safety, morals or welfare of the residents. Powers granted to a PIEA include, but are not limited to, the preparation of industrial development plans, undertaking and carrying out industrial clearance projects, acquiring (including eminent domain) and making improvements upon land, making expenditures necessary to carry out the purposes of the law, and borrowing money or applying for financial assistance.

Board Requirements: The number of commissioners shall be fifteen…Commissioners shall be appointed for a term of four years each.



ENHANCED ENTERPRISE ZONE BOARDS (CHAPTER 135.950-135.973) Enhanced Enterprise Zone Boards give certain tax advantages to businesses locating or expanding within an economically depressed area. Qualifying businesses may receive tax credits based upon new employee creation, employing residents in the enterprise zone, and paying wages above the prevailing county wage.

Board Requirements: A governing authority planning to seek designation of an enhanced enterprise zone shall establish an enhanced enterprise board.

PORT AUTHORITY (CHAPTER 68) The creation of a port authority are established by Chapter 68 of the Missouri Revised Statutes for the purpose of promoting the general welfare, to promote development within the port district, to encourage private capital investment by fostering the creation of industrial facilities and industrial parks within the port district and to endeavor to increase the volume of commerce, and to promote the establishment of a foreign trade zone within the port districts. In order to carry out this purpose, port authorities are given the powers to adopt comprehensive plans for the future development and improvement of its port districts, establish a port improvement district, levy sales and use or real property taxes in the port improvement district, pledge revenues and carry out public improvements for the benefit of it port districts.

Board Requirements – The board of the port authority commissioners which shall consist of at least seven members...shall structure the terms of those commissioners so that no more than three members’ terms shall expire in any one year.



Corporations

AUTHORITIES FOR CORPORATIONS FOR ECONOMIC AND TECHNOLOGICAL DEVELOPMENT (CHAPTER 348) Authorities under this chapter are created for the purpose of providing financing to agriculture and small businesses. Such financing is restricted to the acquisition of modern agricultural property and capital improvements required to comply with environmental quality standards. Powers of authority under this incorporation include, but are not limited to: the ability to borrow money and issue bonds; procure insurance or guarantees from any public or private entities; receive and accept from any source aid or contributions of money, property, labor, and other things of value; and enter into varying contracts with state, federal, and local governments and any other lender.

INDUSTRIAL DEVELOPMENT CORPORATION (CHAPTER 349) Industrial development corporations promote commercial and industrial development and have the power to engage in any activities on its own or in partnership with any nonprofit organization. Highlighted powers of authority include: to promote and solicit industrial and economic development project; to make and execute leases, contracts, releases, compromises and any other instruments necessary to carry out its purposes; to acquire and improve, maintain, equip and furnish one or more projects ; to lease its projects and to charge and collect rent, sell, mortgage, exchange, donate and convey any or all of its properties; to issue bonds and temporary notes; and to sell at private sale any of its property or projects.

URBAN REDEVELOPMENT CORPORATION (CHAPTER 353) This legal entity can be created to acquire, construct, maintain and operate a redevelopment project or redevelopment projects. Redevelopment projects entail the clearance, replanning, reconstruction or rehabilitation of any blighted area, and the provision of appropriate industrial, commercial, residential or public structures and spaces. Urban redevelopment corporations are granted the following powers among others: acquire real property or secure options, borrow funds and secure the repayment by mortgage, issue securities to secure the first mortgage on real property, and sell or dispose of any or all real property acquired for the purpose of redevelopment. Real property purchased by the corporation is not subject to assessment or payment of general ad valorem taxes imposed by cities.



NONPROFIT CORPORATION (CHAPTER 355) Nonprofit corporations may be organized for a variety of purposes such as corporations formed for social, welfare, scientific, research, civic, or homeowner and community improvement purposes along with community chests, funds, or foundations. General powers granted to nonprofit corporations include, but are not limited to: acquire and sell real or personal property; make contracts and guarantees; incur liabilities; borrow money; issue notes, bonds, and other obligations and secure any of its obligations by mortgage or pledge; lend money, invest, or reinvest its funds; and to impose fees and other charges upon its members.

DEVELOPMENT FINANCE CORPORATION (CHAPTER 371) Development Finance Corporations establish a source of credit not otherwise available for the promotion, development, and conduct of relocating or expanding business activities. Development finance corporations are empowered to: borrow money and otherwise incur indebtedness; lend money to, and to guarantee, endorse, or act as surety on the obligation; pay the obligations, debts, and liabilities of any person, firm, corporation, joint stock company association or trust; cooperate with and avail itself of the facilities of the division of commerce and industrial development. Along with the select powers described above, corporate income taxes generated by Development Finance Corporations are exempt from state tax while interest on bonds, notes, or other obligations are exempt from all intangible taxes imposed by Missouri and all state income taxes.

While there are multiple options for city-affiliated development corporations under Missouri law, none allows for the bundling of incentive tools into a single fund nor the discretionary control over incentives awards by a single board or commission.

Other Incentive Programs

KANSAS CITY BROWNFIELD INITIATIVE The City of Kansas City’s City Planning and Development Department administers the Kansas City Brownfield Initiative (KCBI), which is an EPA grant program. The initiative is funded through the Environmental Protection Agency’s Brownfield Program which provides direct funding for site clean-up, area-wide planning, and environmental workforce development and job training. KCBI’s objectives include “facilitating at least one successful brownfield redevelopment on each side of the state line to serve as an example and spur further efforts and investment”, and “building a permanent brownfield redevelopment program in the greater Kansas City area.”



NEW MARKETS TAX CREDIT In 2000, New Markets Tax Credit Program (NMTC) was established by congress to promote business development and real estate projects in low income communities. In order to receive New Markets Tax Credit awards, the issuing organization must be certified by the Community Development Financial Institutes Fund (CDFI) as a qualified Community Development Enterprise. The CDFI requires that the qualified organization demonstrate that it is mission serving to low-income communities and maintains accountability to the communities it serves. The KCMO CDE currently manages the New Market Tax Credit program, and has allocated $14.6 million in credits across seven of its largest projects inducing $56.2 million in total investment in the City of Kansas City’s low income communities. Transaction structures under the NMTC program are often complex, requiring a variety of actors, investors, and lenders to complete the NMTC investment and ensure that the NMTC meets the federal regulations.



Comparison Models Market Street reviewed the city-affiliated economic development functions of Missouri’s most populous cities, including St. Louis, Springfield, St. Joseph, and Joplin. A variety of frameworks are used by these municipalities, but only St. Louis’ city economic development operations are structured similarly to Kansas City’s. The following are brief profiles of these models.

MISSOURI MODELS

ST. LOUIS The St. Louis Development Corporation (SLDC) is an umbrella, not-for-profit corporation organized under Chapter 355 of the Missouri State Code with the mission of fostering economic development and growth in the City of St. Louis through increased job and business opportunities and expansion of the City's tax base. SLDC is directed by its own Board of Directors, and its employees serve as staff support for the City's seven economic development authorities:

• Industrial Development Authority (IDA) • Land Clearance for Redevelopment Authority (LCRA) • Land Reutilization Authority (LRA) • Local Development Company (LDC) • Planned Industrial Expansion Authority (PIEA) • Port Authority • Tax Increment Financing Commission (TIF)

In addition to administering these development entities, SLDC manages the following programs:

• Expansion and retention: Proactively engages in a wide variety of activities to address the City’s business attraction, retention and expansion goals.

• Business incubators: SLDC prove emerging business with critical support through two business incubators.

• Minority business development: Strives to increase the number of minority and women owned businesses in the City and helps existing businesses achieve success through leadership, mentoring, and training partnering programs.

• Agency-owned vacant and abandoned buildings: Manages, maintains, markets, and sells acquired property.

• Site assembly and preparation: Provides access to site assembly and site preparation programs and services that encourage the redevelopment of abandoned, underutilized, and environmentally compromised City properties.

SLDC is overseen by a 12-person board of directors with representation from other city committees as well as the chairmen of the authorities administered by SLDC. Despite the fact that the SLDC board



contains representatives from its administered authorities, each commission still must independently approve financing awards from its authority. The SLDC is funded through charges for services and operating grants (including Community Development Block Grants). The City of St. Louis is financially accountable for the SLDC and its obligations.

SPRINGFIELD The City of Springfield has a six-person Economic Development Office that administers the city’s Enterprise Zone and its affiliated tax credits and property tax incentives. The Office also serves as “project facilitators” for funding tools available for major economic development projects.

The office partners with the Springfield Area Chamber of Commerce, the Springfield Development Corporation, and City Utilities on economic development projects but does not manage programs related to existing or small business development.

ST. JOSEPH Statutory economic development tools in St. Joseph are managed through a partnership of city staff and the St. Joseph Metro Chamber. City staff includes representatives from Finance, Public Works, Legal, Customer Assistance, and Planning. This team promises a “comprehensive approach to economic development efforts… The goal of the ED Team is to review projects in a comprehensive manner and to ensure project time lines are met. The ED Team meets regularly at the staff level and with companies and developers on an individual basis as needed.

The ED Team offers the following incentives:

• Chapter 100 Bond Process & Application • Chapter 353 Tax Abatement • Enhanced Enterprise Zone • Tax Increment Financing

JOPLIN The Joplin Area Chamber of Commerce serves as the principal staffing entity for the city’s statutory development tools. These include the:

• Joplin Business and Industrial Development Corporation • Joplin Capital Corporation • Joplin Industrial Development Authority – Includes the Crossroads Business Park and Joplin-

Webb City Industrial Park

The City of Joplin does not have a staffed economic development department.

Though each major Missouri city approaches the staffing and administration of statutory authorities, corporations, boards, and commissions in different ways, no city provides a true “one-stop shop” for economic development in the sense that prospects can tap into a bundled set of incentives regulated by



a single board of directors. In all cases, incentives and statutory development funding must be accessed and approved through a number of independent entities.

NON-MISSOURI MODELS The following examples represent governments that provide options for combining services, funding tools, and/or oversight to offer prospects a more streamlined and timely development process.

State of Arkansas The state’s Consolidated Incentive Act of 2003 consolidated six previously existing incentives into one incentive package. The consolidated incentives included:

• Enterprise Zone (Advantage Arkansas); • Economic Investment Tax Credit (InvestArk); • Economic Development Incentive Act (Create Rebate); • Arkansas Economic Development Act (AEDA); • Emerging Technology Development Act; and • Biotechnology Training and Development Act.

The Act also provided incentives for targeted businesses that allowed earned income tax credits to be sold, enabling these businesses to realize the benefits of the incentive earlier. In addition, it expanded opportunities for qualified businesses to earn income tax credits based on research and development expenditures. Finally, the act provided uniformity in the definitions and administration of the various incentive tools.

State of Texas Texas’ Development Corporation Act of 1979 gave cities the ability to finance new and expanded business enterprises through tax-funded economic development corporations (EDCs). Chapters 501, 504, and 505 of the state’s code outline the characteristics of Type A and Type B EDCs, detail how cities can adopt a sales tax to fund the corporations, and define projects EDCs are allowed to undertake. The boards of directors of both Type A and Type B EDCs serve at the pleasure of the city council and may be removed and replaced at any time and without cause. All funding agreements approved by an EDC must also be approved by the city council.

The Type A sales tax is primarily intended for manufacturing and industrial development. EDCs may use Type A revenue to fund:

• Manufacturing and industrial facilities, recycling facilities, distribution centers, and small warehouse facilities;

• Research and development facilities, regional or national corporate headquarters facilities, primary job training facilities operated by higher education institutions, job training classes, telephone call centers and career centers not located within a junior college taxing district;



• Aviation facilities; • Commuter rail, light rail or commuter bus operations; • Port-related facilities, railports, rail switching facilities, marine ports, inland ports; and • Maintenance and operating costs associated with projects.

The Type B sales tax may be used for any project eligible under Type A rules and several other project types, including quality of life improvements. Type B corporations may pay for land, buildings, equipment, facilities, targeted infrastructure and improvements for:

• Professional and amateur sports and athletic facilities, tourism and entertainment facilities, convention facilities and public parks;

• Related store, restaurant, concession, parking and transportation facilities; • Related street, water and sewer facilities; and • Affordable housing.

To promote and develop new and expanded business enterprises that create or retain primary jobs, a Type B EDC may fund:

• Public safety facilities; • Recycling facilities; • Streets, roads, drainage and related improvements; • Demolition of existing structures; • General municipally owned improvements; and • Maintenance and operating costs associated with projects.

Type B EDCs also may seek voter approval to spend Type B sales tax funds for a water supply, water conservation program or to clean up contaminated property.

Memphis, Tennessee Stinging from the loss of an economic development project to a Mississippi community because site consultants said its review and approval processes were convoluted, time-consuming, and anti-competitive, the City of Memphis and Shelby County in August 2011 moved to consolidate several existing development programs under a newly chartered statutory entity branded the Economic Development Growth Engine (EDGE). EDGE integrates under one consolidated office the following entities: the city-county Office of Economic Development; the city-county Industrial Development Board; the city-county Port Commission; the city-county Depot Redevelopment Authority; Frank C. Pidgeon Industrial Park; the city of Memphis Foreign Trade Zone 77 program; and the city of Memphis Renewal Community program. Because some existing entities have contracts pending, the sunset process for some of the authorities into EDGE will be gradual.

The EDGE structure was approved by the mayors of Memphis and Shelby County as well as the Memphis City Council and Shelby County Commission; the Memphis and Shelby County chief



executives jointly select the EDGE president. At its inaugural meeting, EDGE also approved its bylaws, ratified its charter, and approved tax exemption status as a 501(c)(3) nonprofit corporation. EDGE has an 11-member board comprised of five city appointees, five county appointees, and one joint appointee serving staggered six-year terms.

In commending city and county elected officials’ approval of EDGE, Memphis Mayor A.C. Wharton said. “The function of the EDGE will be to strategically target great companies who are a good fit for Memphis and Shelby County’s unique assets and do what it takes to bring them here. We will also be able to provide new levels of support and assistance to start-up companies and small and medium-sized businesses.”

Denver, Colorado The Denver Office of Economic Development (OED) offers services that run the gamut from financing and incentives support to workforce development and targeted neighborhood revitalization. The Office provides access for small and minority-owned businesses to contracting opportunities within Denver and offers compliance assistance for businesses located at Denver International Airport. In addition to serving as the local liaison for Colorado’s Enterprise Zone program, OED also operates two gap financing programs through its Small Business Lending Group, a Revolving Loan Fund (RLF) and a Neighborhood Business Revitalization (NBR) loan program. The RLF provides up to 25 percent of a project’s costs and must be located within specific geographical areas within Denver, while the NBR program provides up to 50 percent financing in its targeted neighborhoods.

To facilitate engagement in local and regional economic development, OED has contracted partnerships with the following organizations in 2011:

• Downtown Denver Partnership • FAX Partnership Business Support Office • Five Points Historic District • Metro Denver Economic Development Corporation • Mi Casa Resource Center • Morrison Road Business Support Office • NEWSED Community Development Corporation • Rocky Mountain MicroFinance Institute • West Colfax Business Improvement District

Complementing these contractual relationships, OED also houses the Denver Office of Strategic Partnerships, which serves as a liaison between the City of Denver and the nonprofit sector. DOSP has a 15-member commission appointed by the Mayor to advise the work of the office.

Lastly, through its operation of the Denver Workforce Centers, OED staffs a full-service employment and training agency that supports the recruiting and training needs of businesses, job seekers and youth throughout Metro Denver.

IMPLEMENTATION PLAN ***DRAFT FOR DISCUSSION …

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