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Archive for Thursday, January 3, 2008

Deciphera backs off East Hills expansion

Community discussion’ over incentives package cited as reason

January 3, 2008

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Deciphera Pharmaceuticals has nixed plans to expand at the East Hills Business Park following significant community outcry over how the city approved a package of economic development incentives for the start-up company.

In a letter to city, county and chamber leaders Deciphera executives stated: "In light of recent community discussion regarding the appropriate use and timing of public incentives, we feel it is in the best interests of both Deciphera and the Lawrence community to postpone any investment in public incentives in Deciphera at this time."

Deciphera officials said they have renewed the lease at its existing laboratory in West Lawrence. The company did not rule out seeking future public incentives from the community.

The chamber, city and county issued a joint statement expressing disappointment in the company's decision, but said it would be open to working with the company in the future.

"We continue to support a strong Deciphera presence in Lawrence and will seek to encourage future expansion opportunities at the appropriate time," the group said in the statement.

The package of economic development incentives - valued at more than $1 million over a 10-year period - included a never-before-used tax rebate provision for the company. The tax rebate provision was never publicly discussed in a City Commission meeting, but was explained to commissioners during a closed-door executive session. The closed-door executive session eventually was determined to be ruled illegal under the Kansas Open Meetings Act.

Comments

BigPrune 6 years, 11 months ago

hawkperchedatriverfront said... "Deciphera is staying where they are because they are getting a good deal from the landlord. Ask who it is?"

I give. Who is Deciphera's landlord?

Keith 6 years, 11 months ago

Looks to me like the company has more integrity than the politicians, who refused to reconsider the incentives in the open. If Deciphera decides to leave Lawrence, it will not be the fault of those who demand the public's business be done in public, it will be the fault of the C of C and their cronies, who wanted this done without public scrutiny.

Bob Forer 6 years, 11 months ago

Yeah, but given my knowledge of the fickle pharmaceutical industry, the decision not to expand could be based on economics rather than public propriety. I've never known a corporation to snub their nose at a free handout.

Baille 6 years, 11 months ago

Whatever the reason - whether out of conscience or for economic reasons - Deciphera did what our elected "leaders" should have done. Hopefully, Deciphera will come back and the costs and benefits of the proposal can be discussed and debated openly. If not, the loss is nothing more than the natural consequence of trying to skirt the rules and regulations that ensure our government works openly and transparently.

Keith 6 years, 11 months ago

No doubt about it, but in the realm of perception, this make the company look better than the city commission.

Oracle_of_Rhode 6 years, 11 months ago

Look: the company isn't going anywhere -- they are staying here in Lawrence, without sweetheart financing from you and me. Perhaps it's best to let the free market dictate the rate of growth of this company, rather than subsidizing it with our hard-earned tax dollars.

If a package of incentives for this company is truly in the best interest of Lawrence's taxpayers, then let's negotiate a deal the light of day, not in illegal back-room shenanigans.

In any event, I hope all the Romeos over at the AG's office can get off the phone with their girlfriends long enough to take a real close look at our commi$$ion's strange behavior and personal financial entanglements with this deal gone bad.

Bob Forer 6 years, 11 months ago

Oracle wrote: "If a package of incentives for this company is truly in the best interest of Lawrence's taxpayers, then let's negotiate a deal the light of day, not in illegal back-room shenanigans."

I couldn't agree more. I think most forward thinking Lawrencians are not opposed in principle to mutually beneficial deals between private corporations and public entities. It's not that we're anti-capitaism, but instead, we're pro-democracy.

toefungus 6 years, 11 months ago

It was bogus anyway. Anything done in the shadows is suspect. The real reason they are delaying is more likely due to the unavailability of cheap and plentiful investment capital that will match the burn rate.

toefungus 6 years, 11 months ago

So, when will Lowe issue a public apology?

Richard Heckler 6 years, 11 months ago

Let the investigations continue....

Resignations are not a bad idea.

budwhysir 6 years, 11 months ago

Yep, just wait until the outcry is over, lets postpone this just long enough for the people in this town to forget what happened. Give it a week, something will pop up and this will be pushed thru and we wont hear about it

alfie 6 years, 11 months ago

Maybe they backed off so that no one looks to far into their business, it was getting a little to hot for them. But we can thank grassroots for the police of this

alfie 6 years, 11 months ago

There is a reason besides the reason they are giving for walking far away from this, umh?

budwhysir 6 years, 11 months ago

Ah yes the grassroots. Lots of water for the grassroots this year.

alfie 6 years, 11 months ago

I hope they have not already started changing the building around for them? Does anyone know if they have started?

budwhysir 6 years, 11 months ago

They may go ahead and change the building for them

CentennialNeighbor 6 years, 11 months ago

Look, everybody - this isn't what has been characterized as "company integrity" behind this move -- it's an attempt to portray this decision as a punishment to the public for questioning and challenging the commerce chamber, city/county commissioners AND city staff members for their behavior at taxpayer expense in this debacle.

How is it that the chamber, the county and the city all managed to come together so quickly with a joint statement of sad disappointment over the company's apparently sudden decision, which is subsequently bannered as "breaking news" in the LJW? LIke this wasn't planned??!!

The company originally had no problem with the manner in which they obtained a sweetheart deal, and had no intention of releasing the local government from its obligation. It's only after the "significant public outcry" and subsequent closer examination of the company's product development history, that the company realizes its willing participation in this mess could become very expensive should they decide to proceed with a move into their free building!

Puh-leeze pull the wool over someone else's eyes, guys ... the legal challenge stands because the appointed and elected officials' behavior isn't going to be mitigated by having Deciphera back out of this fiasco.

Sigmund 6 years, 11 months ago

Now that the PLC/GRA have "won" this game of political gotcha, will they now be demanding long lasting reform? I doubt it, remember the PLC/GRA approved basically the same deal.

The PLC/GRA say they want openness, transparency, and accountability in Lawrence government. But not one of them have suggested requiring that every LLP, LLC, and partnership doing business with the City disclose the real people who will benefit from contracts, grants and tax rebates. And I don't recall them demanding an independent audit of the City of Lawrence's finances over the last five years and ongoing yearly audits thereafter.

Those two reforms, disclosure and public audits, would allow the citizens of Lawrence of whatever political bent to monitor the performance of all public officials. While I am not surprised that the PLC/GRA opposes such long term reforms, I am disappointed that the current Commissioners, excepting the Mayor, do not favor it.

Moderateguy 6 years, 11 months ago

Congratulations all you wanna be Woodward / Bernstein conspiracy theorists. Just don't make any more posts about there not being any decent paying jobs in this community. It was a good deal for Lawrence, but you flushed it down the sewer. Enjoy sweeping the floors at Walmart.

alfie 6 years, 11 months ago

ditto- I am for offering the same to the businesses that have built and been in lawrence for years, give them the same chance, its their tax money

Centrist 6 years, 11 months ago

Powershopper ... the issue was not the deal itself, but the secrecy surrounding it.

ynotnow 6 years, 11 months ago

Please find me a list of highly successful communities with all of the amenities that the citizens of Lawrence desire that do not offer incentive programs to attract business.

I'll give you $10 to have you eat dinner at my restaurant. OR I will not give you anything but the restaurant next door will give you $10 to eat there. Both have basically equal service and quality of food. What restaurant do you eat at?

They have extended their lease--but don't they want to expand and can't in their current building or something? I don't think it will take too long for Johnson County to offer them that $10...I bet they would even go $20. And no one is going to stand and complain for endless hours about it either.

I love Lawrence and I want it to grow and have it all--the T, a new library, athletic fields, pestiside free parks, a beautiful downtown, safe roads, assistence for those in need (homeless shelters, WRAP program, after school programs, etc.), excellent schools, etc. I also don't want to have to pay for it all through personal real estate taxes. These companies help expand the tax base so we can continue to add everything we want/need.

justthefacts 6 years, 11 months ago

Does this mean that the people seeking criminal charges against Mayor Hack and/or Commissioner Johnson are satisfied and no longer want to see them charged? I am betting not. So has the AG agreed to take this over from the county or has the AG suggested the county pay for its own special prosecutor?

Ceallach 6 years, 11 months ago

Regardless of political wrong-doings,


That is wrong in sooo many ways. Calling a never-before-used tax rebate provision for the company an "incentive" is ridiculous.

Question: Were Hack and Johnson part of the "group" that made the statements of disappointment and willingness to work with the company in the future? They made the deal in secret because they knew it would not pass the smell test with the public. You know, the public, the people who will be paying the bills.

justthefacts 6 years, 11 months ago

Grand jury for a Class B misdomeanor? Great use of resources.......

moveforward 6 years, 11 months ago

Oracle_of_Rhode: "Perhaps it's best to let the free market dictate the rate of growth of this company, rather than subsidizing it with our hard-earned tax dollars."

Nonsense. The demand for the company's product, and the potential for profitability will fuel the growth of the company. These types of incentives merely influence where (which community) that growth will occur.

OldEnuf2BYurDad 6 years, 11 months ago

This is not good news, but bad. We WANT to bring business to the area. We want it to come through legit processes, but we want it.

Now the full impact of our leaders' failures can be seen. A potential business relationship is now lost because of simple procedure.

ashmole 6 years, 11 months ago

This is good news. Now let's show Deciphera the door: how about Lenexa? We don't need a home-grown Westar or Enron here in Lawrence. Honest, socially conscious firms - hooray. Conniving, back-room wheeler dealers - not in my backyard, thanks.

texburgh 6 years, 11 months ago

Incentives don't always attract businesses. Businesses more often base their decisions about location on quality of the workforce and access to materials and transportation. Also in play when you must bring people in from out of the area are community amenities. Lawrence has the benefit of a quality workforce thanks to good K-12 schools and KU. Lawrence also has ready access to transportation routes sitting as it does on I-70. It is high in community amenities - parks, a vibrant downtown, the arts. It is also close to a major urban center. We have what it takes to attract business. But we must also compete with Johnson County. To do that we must do a little better in everything.

Incentives may help us compete with JoCo but incentives done in back door secret deals with no public input by commissioners who fail to disclose their own financial interests in the company receiving the benefit is capitalism gone wrong. It is, in fact, not capitalism but rather closer to Russian-style cronyism.

Deciphera did the right thing here even if, as some seem to think, they did it for other reasons. The City Commissioners can't bring themselves to do the right thing - they should have pulled the deal and renegotiated in the light of a public meeting. Hack should resign - she violated the open meetings act and the rules of disclosure. And she is arrogant enough to refuse to consider her own behavior as wrong. The chamber of commerce owes an apology to the citizens of Lawrence. They have no right to sit in and participate in executive sessions of the City Commission. If Laverne can be there, then so can ANY Lawrence citizen. The chamber can offer comments in a public meeting just like anyone - they are not elected and they do not get to do the negotiating or the deciding.

And finally, every tax break given to business is a tax increase on homeowners or shoppers. Either the city raises residential property taxes to offset the lost revenue or they raise the sales tax or they cut services. That's all they've got. When business doesn't pay, residents do. The tax system becomes unbalanced and unfair. Business needs to pay a fair share of taxes to support the very things that attract business - quality infrastructure, community amenities, and great schools.

It's time for everyone to consider fairness in the system. We can't have a no tax system. We need roads, schools, police and fire protection. All those things benefit residents AND businesses. Both must pay their fair share.

blackwalnut 6 years, 11 months ago

The is for the best. The deal was tainted and nobody will ever trust it.

Now the city commission needs to resign. The mayor should resign first, and apologize and make a full confession. That is the only honorable thing left for her to do.

blackwalnut 6 years, 11 months ago

gl0ck0wnr:

The jobs were never guaranteed. Under the sweet deal for Deciphera, the company could keep the tax incentives from Lawrence and relocate elsewhere.

Lawrence dodged a bullet. Good riddance.

camper 6 years, 11 months ago

If, from the start, the public was made aware of incentives, and the commision explained them, I think it would have been widely supported. The city leaders could have promoted Deciphers and pushed it through rather easily in my opinion. Wasn't this why there was somewhat of a turnover in leadership when they were elected? There was no reason to negotiate this rebate behind closed doors, nor was there a reason to not disclose ownership interest. Why couldn't they just tell us about it for crying out loud! Thats all they had to do. And they failed to do so.

WWoftheW 6 years, 11 months ago

If you check out the Deciperha website you may note that a lot of the employees work in other towns at other universities. So the question is what jobs?

Dorothy Hoyt-Reed 6 years, 11 months ago

It's funny that the people who most want these tax incentives (corporate welfare) for companies usually say they are staunch supporters of capitalism. Let the free market work. If a business is a good investment, then why do they need our help? Or sell local stock to people in Lawrence, the Merc has done well doing that.

BigPrune 6 years, 11 months ago

Maybe the capitalists in Olathe gave them everything and more without a bunch of grumpy losers recovering from last night's high complaining. Free market at work.

Thank you Lawrence.

signed, Ottawa & Olathe

Godot 6 years, 11 months ago

Most of the high paying jobs would have been "contract employees," who already have high paying government jobs, and/or are retired from the university.

What baffles me is how Deciphera can back out the contract, but the city could not, or so they said. Is this a compromise? If so, will the cancelling of the contract have to be approved in an open meeting? And with discussion? Or, if no public discussion is required, who was in on the negotiations? Just askin'.

camper 6 years, 11 months ago

This issue is not about capitalism or a joint government / business venture so much as it is about governmental transparency. Neither is it a liberal vs. conservative issue.

This is not the fault of concerned citizens who voiced displeasure with the way this deal was done. And this comment is in no way related to the Lawrence or Deciphera, but: city and local government corruption is widespread in this nation, and I bet few really know about what really goes on in the governemnt biz in many locales. There are relatively few controls compared to most businesses and larger governing bodies. There is a reason why displeasure should be voiced, and these things need to be looked into. It's called Democracy.

areyajuststupid 6 years, 11 months ago

With a few exceptions above, I must say that everyone who has commented so far are a bunch of short-sighted idiots. Incentives are meant to encourage growing companies to stay in the community. Deciphera, in order to retain these incentives, had to meet certain employment numbers - miss one of them, and the incentive stops. And while these may have required MS and Phd, they were also high-paying jobs - and that money comes back into THIS community. What I'm saying is that this was a very good deal for Lawrence, as well as for Deciphera.

As for the 'back-door dealings', come on. The DA referred it to the AG who cleared everyone of ANY wrong-doing. The Grassroots Action group, without any evidence, simply couldn't leave well enough alone. In my opinion, these are a bunch of people with waaaaay too much time on their hands, probably came to Lawrence in the 60's, never left, and still see a conspiracy behind every door, regardless of whether it is open or not. If the AG investigated this, and there is no reason to think that it wasn't, then that is good enough for me. Or do you all think the AG is also in on this? Enough with the conspiracy theories, just shut up, and stop screwing up my town.....

Godot 6 years, 11 months ago

Actually, the contract agreed upon gave ownership of the building at a huge discount, and paid by taxpayer dollars through the Bioscience authority, to Deciphera, with no strings attached, whatsoever.

According to the AG's office, the Mayor did, indeed, violate the statute requiring disclosure, and that the city commission violated the Kansas Open Meetings Act. This particular AG determined that these violations were mere technicalities unworthy of prosecution. Consider the source.

Godot 6 years, 11 months ago

One thing for sure will happen: the City and County will receive their share of the $88,000 in property tax for this building in 2008, as has been paid by DCDI in the past. What is not clear is where this $88,000 will come from. Will the grant the city gives the Chamber of Commerce be used to pay this obligation?

camper 6 years, 11 months ago

There really was not much of an investigation. It was not thought that anything could be proven in a court of law (because there were no meeting minutes or recorded documentation), so the matter was pretty much left alone. Nobody was interviewed. The only evidence consisted of written affidavats that all said the same thing. While nobody was prosecuted, nobody was really cleared either. There are also many other things about this issue that have not been addressed or answered, namely the acquisition and timing of the stock investments, conflicting statements made by officials (regarding the consent agenda), and conflict of interest.

Mike Blur 6 years, 11 months ago

"areyajuststupid (Anonymous) says:

With a few exceptions above, I must say that everyone who has commented so far are a bunch of short-sighted idiots. Incentives are meant to encourage growing companies to stay in the community. Deciphera, in order to retain these incentives, had to meet certain employment numbers - miss one of them, and the incentive stops. "

Bee-effing-ess, stupid. BTW, welcome to the forums. What's your "real" handle?

History has proven time and again that companies that fail to meet the employment criteria have been given breaks, time and again. Time to shut the leaking sieve of tax dollars to unworthy corporations, because the bloodletting has gone on for way too log.

And, if this costs us Deciphera's presence in Lawrence, too freaking bad. Hey Deciphera, don't let the door hit you in the a$$ on the way to JoCo.

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