By John Celock
A Kansas City suburb is aiming to bring in more of the technology start-ups that have been flocking to the region with a series of new assistance programs.
The Shawnee, Kan. city council passed a package of incentive programs that would provide start-up companies with new property tax offsets and leasing assistance. The programs, a first in the Kansas City region, are on top of existing economic development programs in Shawnee geared towards tax abatements and loan forgiveness.
“Our goal with the extension of the program is to provide assistance with startups,” Shawnee Councilman Brandon Kenig, who worked to create the program, told The Celock Report. “Most of the programs are for larger established companies. There is a real opportunity to appeal to startups and emerging high growth industries.”
Under the new program, Shawnee will provide start-ups in high growth industries with a property tax offset that relocate to the city. Under the terms of the program, in the first year the company will receive a 100 percent offset, a 75 percent offset in the second year and a 50 percent offset in the third year. Kenig said there is an optional fourth year with a 25 percent offset if the company is providing funding or office space to another start-up business that is a client of the Enterprise Center of Johnson County or another private business incubator.
Kenig said the optional fourth year will allow start-ups the option to “pay it forward” to another new business.
Under the terms of the lease assistance program, companies would be able to receive up to two years assistance to lease office space in Shawnee, with a sliding scale of assistance based on the amount of employees in the company. Companies with two or less staff will receive a 20 percent offset, three to five staff a 25 percent offset and those with between six and 10 staff will receive a 30 percent offset.
Kenig described the lease assistance program as a “major shift” from existing Shawnee policies, which he said are geared towards larger companies.
“(Start-ups) are operating in a very agile manner and are very lean,” Kenig said. “They are focused on product managemebt and getting products and services out the door. The one area they can’t control is the office rent.”
Funding for the programs will come from Shawnee’s economic development fund, which is funded by fees the city receives from Waste Management for hosting one of the largest landfills in the Midwest in the city.
Kenig said the goal of the program is to bring in more start-ups to Shawnee as more technology companies look towards the Kansas City metro area to grow. The Kansas City metro area has become known as “Silicon Prairie” for the growing amount of technology companies that have located on both sides of the Kansas and Missouri state line.
Kenig said that the program is broadly geared towards high growth industries, including technology, bioscience, information services and legal. He said the broad wording of the program is to allow for a variety of industries.
“My interest with this is going after tech and bioscience companies,” he said. “That is a high growth industry that is highly concentrated in Kansas City.”
Kenig said the program is also aimed to lessen a divide between Kansas City and the suburbs in terms of the companies that are locating to the region. He said he sees a need for the suburban communities to adopt an “aggressive approach” to lure start-ups into their cities.
“This has the potential to be a game changer and a model for surrounding cities to emulate,” Kenig said.