Business incentives at heart of Vision2 debate

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Reported by: Ian Silver
Updated: 10/19/2012 3:18 pm Published: 10/18/2012 6:04 pm

Is it a wise investment, or millions of dollars misused?

That's what many Tulsans are asking about the $750 million Vision2 bond package, after the City of Wichita, Kansas offered roughly $60 million in incentives to try and steal Spirit Aerosystems away from Tulsa.

Supporters of Vision2 say that kind of competition is a reason voters should approve Vision2. The bond package would fund more than $250 million worth of infrastructure and facility upgrades and improvements to businesses at the airport, specifically,  Spirit Aerosystems, American Airlines, and the Tulsa bus company. It also includes at least $53 million for a deal-closing fund to draw new business and jobs to Tulsa.

"It provides us an opportunity to have a level playing field where we can go out and attempt to incentivize businesses from other communities to come into Tulsa," Tulsa County Commissioner and Vision2 supporter John Smaligo said.

Smaligo said incentive offers are just the way business is done these days.

"If we are not providing incentives in some way we are going to be behind other communities like Wichita that are willing to offer these incentives," Smaligo said.

But J.B. Alexander, chairman of the Tulsa County Republican Party and staunch opponent of Vision2, said showering corporations with money and incentives has its flaws.

"Wichita gave almost $500 million to Boeing," Alexander said. "Didn't work. Indianapolis gave over $300 million to United. Didn't work."

"It's going to break us is what it's going to do."

But Smaligo said the Vision2 incentives are smarter and safer, because the money is invested, not handed over as cash.

"Whatever money is spent, because we're not giving cash payments to companies, that money is going to remain here in Tulsa, and provide us the opportunity to incentivize companies years down the road," Smaligo said.

But Alexander said the Vision2 supporters are simply going about their efforts all wrong.

"Eighty percent of our jobs are created in this nation by small business and smaller corporations," he said. "Yet we're funneling hundreds of millions of dollars into a few larger companies for some jobs. And what we need to do is start concentrating on that 80 percent."

Smaligo said Vision2 focuses on both big and small businesses.

"If we were to lose those [Spirit Aerosystems] jobs, think of all the other small businesses that supply products and services to those larger businesses," he said.
"We want to go back to the table and say 'yes, we've got to do economic development for Tulsa,'" Alexander said. "'This is not the way to do it.'"

Mark Walker, Senior Manager of Communications and Public Affairs for Spirit AeroSystems released this statement about recent coverage about the company:

"Earlier stories have created confusion about Spirit AeroSystem’s commitment to Tulsa. Our company’s history in Tulsa shows a strong commitment to the community and its workforce. Earlier this week, the Wichita City Council voted to approve $59.5 million in industrial revenue bonds for Spirit AeroSystems’ operations in Wichita. One point of clarification is that revenue bonds are different than direct incentives. We do believe this is an excellent example of a community and its citizens collaborating to ensure future success. Additionally, the bonds issued in Wichita are for the company’s Wichita current operations.

Proposition 1 in Vision2 aims to make investments in citizen-owned infrastructure at the TIA Complex. As a tenant, Spirit AeroSystems’ operations in the Tulsa community will be positively impacted through facility upgrades. Responsible planning for facility upgrades will enable the collaborative partnerships in Tulsa with Spirit AeroSystems and other aerospace and manufacturing companies to continue, helping the companies be more successful and retain a large Tulsa workforce.”

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The views expressed here do not necessarily represent those of KOKI FOX23 - Tulsa

Gobigred - 10/25/2012 11:52 AM
0 Votes
I would like to know if the reporter actually did any research at all for this article. The world headquarters for Spirit is in Wichita. The industrial bonds in Wichita are to grow the existing capacity of the work performed there. There is no new work with the company were a sight selection and bid would need to take place. Second the improvments for the Tulsa sight are for the airport facilities and growing the capabilities and capacity there. They can help The Bus facility, American, and Spirit but its more about bringing in new businesses. The councile man is right smaller businesses is where economic growth happens. If I were a on the Tulsa economice development councile I would like at trying to great a supplier city of small business, LLC, and smaller corps, near the airport that could help companies like Spirit, American, Nordam, BizJet, and the Bus facility compete with lowers costs and quicker turn around time on the raw materials and parts they need to make their customers happy.

Gladys Crump - 10/19/2012 11:15 PM
0 Votes
The reason Witchita, Kan or some other city will "steal" our businesses has nothing to do with business or Vision 2, here are the 2010 crime stats for both cities, you can google it if you don't believe me. Witchita- Murder: 16 Tulsa- 54, Witchita- Rapes, 246 Tulsa- 252 Witchita- Robberies, 481 Tulsa- 1,381, Witchita Aggrivated Assaults- 2,283 Tulsa- 2,617. Witchita, Ks. Population estimate 2010: 382,368 Tulsa,Ok estimted population 2010: 383,625. Of course in 2011 Murder in Tulsa dropped to only 50, Rape went up to 266, Robberies were only 1,090 and Assaults went up to 2,555. These statistics is why no one is going to locate a business in Tulsa, and all the river development and sports arenas in the world is not going to change that, only one thing will bring business to Tulsa, and I have pretty much given up hope that will ever be seriously addressed,not as long as our city leaders can give us some shiny new toy to distract us from the real problems and keep feeding us lies about how crime has gone down.

frankwords - 10/18/2012 7:17 PM
1 Vote
Bribing businesses with taxpayer money is a travesty. It's the 21st century version of Soviet 5-year plans and it never works. Evey town and state in the US is trying to pick winners in business in the name of economic development when the only thing that can do this successfully is the free market. A handful of policy wonks and planners cannot direct an economy efficiently or effectively. If I owned a business and my tax dollars were being used to bring in a competitor, I would sue based on the commerce clause and equal protection under the law. Government cannot favor one business over another. If cities and states want to attract businesses, they should stick to the only legitimate functions of government which are public safety and providing good roads. In Tulsa, they haven't even done that yet.
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