Kansas City Mayor Sly James said the city will not stand by and allow Kansas to use enhanced incentives to lure businesses away from Missouri, a practice he called "mutually assured destruction."
James made the remarks Wednesday while attending the kickoff of an effort by the Kansas City Economic Development Corp. to retain businesses, the Kansas City Star reported.
"We need to compete with Minneapolis and Dallas, not Overland Park," James said. "That's a waste of time and money.
"The days of sitting back and watching it happen are over. Mutually assured destruction only works if both sides are armed. They have a gun. We have a Popsicle stick."
Kansas Gov. Sam Brownback denied that his state is targeting Kansas City, Mo., businesses, but said his state will go anywhere it can to recruit businesses.
Seventeen senior area business leaders sent a letter last month to Brownback and Missouri Gov. Jay Nixon, asking them to stop using incentives to move businesses across the state border within the metropolitan area.
While in Wyandotte County on Wednesday, Brownback said he has not dismissed the business leaders' letter.
"We're not blowing anything off, but also we're open for business around the country. And that's what we're doing. Not targeting," he said.
Kansas allows companies to keep 95 percent of their employee withholding taxes for up to 10 years. Missouri has a similar program but with an important difference — Kansas allows companies to get cash up front.
The economic development corporation has been discussing the business retention initiative for three years but stepped up efforts in the last year when large companies moved to Overland Park, including JPMorgan Retirement Plan Services and KeyBank Real Estate Capital.
In recent months, AMC Entertainment has been offered $47 million in incentives to move from Kansas City to Kansas.
Missouri lawmakers are considering legislation that would help Kansas City by allowing companies considering a move to retain 100 percent of their withholding tax for 10 years, with an annual cap of $6 million.
The EDC set a goal of raising $600,000 to hire more staff to help retain city businesses and survey their needs. The city is contributing $200,000. The remaining money is expected to be raised privately.
Troy Schulte, interim city manager, plans to hire a full-time ombudsman to be a point person for businesses at City Hall.
And James pledged to spend at least a half-day each month lobbying local business leaders.
"We need to be nimble and effective in how we work with the business community," James said. "We hear you and we'll do the best we can to respond in a reasonable and effective manner."