Inside the EEZ Part 1: A fit for Columbia?

May 9, 2012

A proposed enhanced enterprise zone in Columbia has generated a lot of discussion for the last few months. Concerns about the designation of blight required for the EEZ have been widely discussed in the news and at city council meetings. On Monday, Columbia City Council voted to throw out the original proposal and possibly start the process over.  In part 1 of her 3 part series on the EEZ program, KBIA’s Sarah Redohl explores whether Columbia is different from other EEZs.

Shortly after the Enhanced Enterprise Zone was proposed for Columbia in February, many citizens questioned whether or not Columbia would benefit from the state tax credit program. Also known as an EEZ, the program had been implemented in 118 other areas of Missouri before it was proposed in Columbia. The program offers tax credits to businesses investing in economically depressed areas.

“Do we want manufacturing jobs? That’s probably the critical question here,” said Mike Brooks, president of Regional Economic Development, Inc., or “REDI”.

 He says an EEZ is just another tool Columbia can use to attract jobs.

It’s been 17 years since the last manufacturing company located in this community. 17 years is a long time,” Brooks said.

City council member Barbara Hoppe says Columbia is different because it is already an attractive place for businesses.

“In terms of Columbia, it’s a unique place. Though the state of Kansas has an EEZ over the entire state, and there different are areas in Missouri that have EEZ, we have to independently assess whether it fits in with Columbia,” Hoppe said.

Unlike some rural areas in Missouri, Hoppe says Columbia also has good infrastructure for new businesses. She says it’s also a progressive, environmentally friendly town with a highly educated population that may be appealing to some manufacturers.

“We’re sort of past the worst of the economic downturn and Columbia is an area that has attracted businesses. So we have to look at, to what extent we would have that manufacturing without the EEZ?” Hoppe said.

Another unique characteristic of Columbia is the student population.

 “They’re students, essentially, and they’re living on Pell Grants and their part time jobs and going to school. When they fill out the census in the income section they look like they’re poor… but a great deal of the time it’s a situational poverty, they’re coming from middle class families,”  said Tracy Greever Rice,  the director of the Office of Social and Economic Data Analysis at the University of Missouri. She’s been against the proposed EEZ in Columbia for months.

She says the more than 45,000 university students in the area skew the poverty data.

Based on data collected by the U.S. Census from 2006 to 2010, much of the original proposal for a Columbia EEZ covered areas that have high student populations. Greever Rice says the program was intended to fix structural poverty and may not work the same in Columbia.

“There are some EEZ’s where, particularly maybe in rural areas, where there’s not a tool in the world that’s going to convince a company to move there,” Greever Rice said.

Greever Rice says Columbia has a higher proportion of college-educated citizens compared to other EEZ towns in Missouri, making it a strange fit for an EEZ. Brooks says he is concerned for the roughly 50 percent of Columbians who do not have a college degree.

“We need to be looking at the broad community, not just the people that have college degrees. And manufacturing does offer good jobs,” Brooks said.

Brooks says many of the people he’s talking about currently work in retail, a portion of Columbia’s economy that continues to grow. But the average difference in pay is substantial. People working in manufacturing on average make $12,000 to $14,000 more each year than they would in retail. Although the process may have angered many citizens, Brooks says it’s worth it.

“There are 118 communities that have passed this program. It’s hard to understand how that many communities could embrace an enhanced enterprise zone if, in fact, there were negative ramifications,” Brooks said.

Columbia City Council will have to pass an ordinance in order to start the process of forming the EEZ over again.

Check back to Thursday for the second part of this three-part series on Enhanced Enterprise Zones—looking further into the data behind the original proposal for an EEZ map in Columbia. You can also hear this series this Wednesday-Friday on KBIA’s Morning Edition.