OTTUMWA, IOWA -- The Wapello County Supervisors held a meeting Tuesday morning to clarify their response to the City of Ottumwa’s proposed tax incentive to bring a Kohl’s department store to the city of bridges.
“We are pro-development, we are pro-Kohl’s, we aren’t even anti-incentive, but I think that this particular incentive is an unfair benefit,” said Supervisor Steve Siegel.
This type of tax incentive program was actually discussed in the Iowa Legislature’s past session. Supervisor Siegel has spoken to KTVO in the past about how the commercial property tax code needs reform, and he touched on that after Tuesday’s meeting.
“We just finished the legislative session, and there was competing proposals for property tax reform. The Democrats wanted to direct theirs towards small business, while the Republicans wanted to give it to everybody. The Republicans went on and on about how they weren’t there to pick any winners and losers. I think when you give one store $2 million and the others a kick in the butt, we are picking winners and losers,” said Siegel.
All three supervisors felt that other locations for the proposed store could have been utilized. Supervisor Greg Kenning brought up the idea that just a few hundred yards away toward the current Menards there is a plot of land with infrastructure already in place to house the proposed store. Supervisor Siegel believes that the Quincy Place Mall would have been a great location; bringing more traffic to the facility and also the hope that more businesses would locate inside the mall with another anchor store.
Ottumwa Mayor Dale Uehling told KTVO this afternoon that he understands the county’s concerns regarding the tax incentive, but that the city is doing everything it can to bring a brand new shopping center to southeast Iowa and northeast Missouri.
Below is the letter from the Wapello County Supervisors to the City of Ottumwa.
Wapello County Response to City of Ottumwa TIF Proposal
July 19, 2011
The City proposes to cut a piece out of the existing Westgate TIF, as it only has eight years remaining on its statutory life, and create new TIF with a 20 year life. They then propose to bond for $2 million dollars and write a check in that amount to Kohl’s as an inducement for them to build a store in Ottumwa.
Kohl’s will then repay the $2 million, plus interest over twenty years, to the City with a guaranteed annual amount of property taxes. In addition, the City is leaving Wildwood Drive and Venture Drive in the old Westgate TIF and borrowing an estimated $700,000 to $900,000 from it to elevate those two streets and do flood protection work.
The new TIF will, in the short run, have no impact on Wapello County, as if no store is built no new property taxes will accrue. The borrowing for the streets will have a negative impact on Wapello County as it will divert property taxes currently going to the County to repay the loan.
The Wapello County Board of Supervisors does not oppose seeking a new store and even using infrastructure improvements as an incentive. We would like to see a new store as well.
However, we have several concerns about this approach.
This is a retail development, with very few full time jobs and very few employee benefits. It is not an industrial or production facility paying good wages and offering good benefits.
It creates an unfair playing field among retail competitors, aiding the “new kid” and hurting their long term existing competitors, such as JC Penny and Herberger’s.
It sets a precedent and makes it difficult to not offer a similar or even greater incentive to any future development.
However, the County has no real say about the project. Legally, it is entirely up to the City to decide. It seems like the City may be willing to work with the county on resolving several other long time issues between the parties.
We wish the City well on this development, but we do not believe that this project employs sound public policy and that it opens a Pandora’s box of problems down the road, as wee seek additional development.
Jerry Parker, Chair
Steve Siegel, Vice Chair
Greg Kenning, Supervisor
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