From the Business Perspective Newsletter
APEX transforms and protects
Four billion dollars. Four thousand jobs. 300 acres. 2.5 million square feet.
A behemoth project, Kansas ultimately competed toe to toe with Oklahoma to win the heart of Panasonic to bring production of its electric-vehicle batteries to the former Sunflower Army Ammunition Plant in DeSoto. Ultimately, these Johnson County-produced batteries will power Teslas made in Austin, Tx.
Mega projects like this don’t just happen. Competition is fierce, and to land them, there must be a match between the location, workforce and economics. Kansas has been a match on the first two factors, but for too long, we’ve missed the boat on these transformational projects because of the economics. Your Overland Park Chamber team advocated to help pass the Attracting Powerful Economic Expansion Act (APEX) to set the stage for Kansas to compete.
There is no doubt this is a very desirable location for people to live, work and play. Our workforce is well-educated and hard-working. Our central location and quality of life is an advantage. Our cost of living is a competitive edge. However, the competition for economic development projects of all sizes is very strong and there are many places in the United States that are equally attractive.
Like them or not, incentives are used in all 50 states and for Kansas to compete, it is necessary that we use them judiciously to stand out.
As with most projects, the company name and intended site location was confidential during negotiation, known only as “Project Ocean.” It was clear this project could be an economic gamechanger for Kansas, and that we were in the hunt – but for the economics of the deal. It was time to demonstrate to this company (and others like it considering mega-investments) that Kansas is open for business and a great place to invest.
Over the years, the Chamber has worked with lawmakers and the Department of Commerce to improve the effectiveness of our economic development incentive tools. APEX was constructed to include the transparency and accountability we’ve advocated for in other incentive tools. With appropriate legislative involvement and limitations on how it can be used, APEX will have oversight like no other tool in Kansas.
The legislation includes numerous clawback provisions to protect Kansas taxpayers should a recipient of APEX incentives – including Panasonic – not live up to their end of the agreement. This is a crucial component of our economic development incentives. A bonus in the legislation is a reduction in state corporate income tax for all businesses in Kansas and tools to attract critical suppliers to the mega project.
In discussions with lawmakers, we emphasized that Kansas must think big if we want to land these transformational “mega projects”. The future of all 105 counties in Kansas is inextricably linked. With the site unknown, it was still clear that the project would be a game changer for the entire state.
Locating in DeSoto at Sunflower turns largely unused, unproductive land into an economic engine that will help fuel the Kansas economy for years to come. Panasonic’s choice of Johnson County is a bonus that will drive continued attention and growth in our region, opening the door to a new, growing and sustainable industry into Kansas’s manufacturing mix. Diversification of our economy is not only smart, but necessary.
Tracey Osborne Oltjen, CCE, IOM
President & CEO