Great things would appear to be happening from an economic development standpoint in Cherokee County.
Several years ago a group of doctors opened a new orthopaedic practice in Galena, and as Ortho 4-States has become successful approached the City of Galena about a partnership for a new $13 million specialty hospital adjacent to the current clinic.
Earlier this week we learned that the same group which developed Ortho 4-States has come to the City of Galena again to ask for help financing a $10 million office complex which, if all things go as planned will provide offices for 20 doctors and associated support staff numbering as many as 100 - all good, high paying jobs.
In the case of the existing clinic and the hospital the financing was done by way of traditional bank loans.
This office complex will be financed by Industrial Revenue Bonds, bonds issued by the city, but paid by the development group. Part of any IRB project is property tax abatement. In the State of Kansas those abatements are limited to 10 years.
Some have questioned the abatement, especially in light of the failed abatement for RSI which pulled out of Columbus long before the 10 year period was up.
They point to the hundreds of thousands of dollars in tax revenues which will not be paid in that period. These are legitimate concerns, however, in this case they are misplaced.
In our view, municipalities will not be losing any revenue. Did the project not exist there would be no revenue to "lose." What does not currently exist cannot be lost, and property taxes will continue to be paid on both the two existing projects and the taxes on the unimproved land will be paid at the current rate.
Additionally, a medical practice is not a cabinet plant which can simply be relocated to another community. A practice takes years to build and is not abandoned lightly.
Moreover, the project will bring other revenue to the city and county in the form of sales taxes, indirect jobs, and property taxes on the homes people will buy and build as they relocate to the area.
While tax abatements must be carefully considered, they are a useful tool in the economic development tool box.
In addition to the new office building, a steering committee is forming in the wake of last week's economic development meeting in Baxter Springs. The meeting was to address ideas for new development along the Interstate 44 corridor in Cherokee County. This area of the county is without doubt the most ripe for development while simultaneously being the least developed - the only area of the county with no water or sewer access.
These are hopeful signs for one of the poorest counties in the state.
Economic development is never an easy process but it is vital for the future of the county, and indeed the country.
We at the News-Advocate applaud the efforts currently underway and look forward to the further efforts these will spawn.
- Writing for the Board, Patrick Richardson