City Council members tossed more fuel on a smoldering debate over whether Lee’s Summit is getting a good return on $250,000 annually spent to support the Lee’s Summit Economic Development Council.
The LSEDC – which gets more funding from local businesses and the Lee’s Summit R-7 School District – is directed by an executive board that includes the mayor, city manager and school superintendent. In 2011-12 its revenues were $565,805. Jim Devine, president of the LSEDC, has led the organization since 1999.
The council’s Community and Economic Development Committee on July 17 began work on a council directive to define performance measures for the LSEDC to be included as part of an agreement to get future funding.
Chairman Dave Mosby said the committee could look at measures in two ways, setting goals for activity or results. An example of activity would be scheduling a number of tours for developers. An example of results, he said, would be a company locating in Lee’s Summit or expansion that creates new jobs, due to LSEDC efforts.
Councilman Derek Holland asked if such tours would be valuable, and so worthy of being considered as a measure.
Yes, said Mike VanBuskirk, of Zimmer Realty Services, who was at the meeting as on behalf of the LSEDC. He said many brokers or developers hadn’t visited Lee’s Summit and would be surprised at opportunities they would see. Devine suggested there should also be a reverse tour, with council members going to competitive cities to learn about what Lee’s Summit is challenging.
Mosby said that could be one criterion, specifying that the LSEDC will sponsor and complete such tours.
The committee will continue working on the performance standards at its August meeting. It made only a little headway on suggesting other specific measures. Much of the conversation was about the need for measures and areas of responsibility.
Council member Bob Johnson has been pushing for such standards and has gained support from some other members. Johnson, who is not on the committee, testified Wednesday that the city is facing flat sales and franchise tax revenue. He noted that a lawsuit gobbled up much of the city’s once-plentiful cash balance.
And the percentage of commercial-to-homeowner real estate had dropped, putting more of the tax burden on those homeowners, he said.
Johnson said with tighter budgets, the city has to demand more. He wants commercial projects to bring higher paying jobs.
“I’m tired of it, I want results,” Johnson said. “Where are the job creations?”
Council member Derek Holland said measuring performance is tough but necessary. He used his nine-member company for an example, saying he has to ask his sales manager “Are you selling, are you bringing in new business?”
“We need the LSEDC and Jim Devine ... to wake up every day thinking ‘How can we create new jobs and a better business climate in Lee’s Summit’,” Holland said. “There are tangible, real things we can measure.”
He said he wants the LSEDC to be more aggressive recruiting outside companies.
Mosby said any goals set for job creation also needed to note what kind of jobs. He added that to be fair the city also needs other yardsticks to measure the LSEDC’s success.
He asked city staff to survey other large Missouri cities to see what they do to evaluate performance.
Council member Allan Gray, a committee member, said that as expectations are “transforming,” the LSEDC needs to be given adequate time to meet any new measures. Economic development works on a schedule of many years, not just one, he said, and requirements need to be realistic.
Because there are many other “stakeholders” in the LSEDC, (the private investors and the school district) the city needs to be given consideration to their expectations as well.
“We want to make sure we keep everything in balance,” Gray said.
Gray said also the council must change its culture or it will the LSEDC will be set up for failure.
“Successful communities have incentives in their quiver,” Gray said. “As a council we’re going to have to be prepared to get into the game.”
Brad Cox, volunteer chairman of the LSEDC, said in an interview that as the council looks at other cities, it needs to keep in mind how successful those cities have been as well.
Cox and Devine said economic development is a partnership where the City Council also has to play its role.
Cox answers Holland’s example with a rhetorical question:
“As a CEO, who’s responsible for your business?” Cox said. “Who’s responsible that there’s a product that will sell?”
One example Devine and VanBuskirk gave to the committee is that the city needs a precise, written economic development policy the council will consistently support.
Devine gave another example.
The LSEDC and other leaders believe a 100-plus apartment complex or maintained housing in the downtown area is needed to increase density and support commerce downtown.
That housing would encourage a grocer to locate downtown and attract the increasing number of young and older residents who want to walk or bike ride to work or entertainment.
They contend it draws the “creative class” – well-educated, inventive workers that in turn would in turn help attract companies to locate in Lee’s Summit wanting to use that workforce.
Completing such a project with many moving parts requires a willing landowner, city staff and elected officials and residents acceptance, Devine said.
Devine said the city also needs to invest in infrastructure, such as fixing the traffic-clogged intersections of U.S. 50 with Missouri 291 to encourage commercial development, Devine said.
Those aren’t easy fixes, because MoDOT doesn’t have funds allocated. The city and LSEDC have been seeking solutions, Devine said, but without them the LSEDC is at a disadvantage.
VanBuskirk said developers are reluctant to spend large amounts of money and time to “roll the dice” with the City Council.
He said it needs a written policy that says “...if you meet these requirements, here are the incentives you can expect.”
“That’s the biggest challenge right now,” VanBuskirk said.