Vision2 backers issue warnings after Wichita helps Spirit AeroSystems

BY WAYNE GREENE World Senior Writer
Thursday, October 18, 2012
10/18/12 at 7:42 AM

News that the city of Wichita is moving to invest nearly $60 million in its Spirit AeroSystems plant has Vision2 backers warning that Tulsa's aerospace jobs are at risk of poaching by other cities.

The Wichita City Council voted 5-0 Tuesday to approve $59.5 million in industrial revenue bonds for the company as its expands its Boeing 737 and 787 production and repairs damage from an April 14 tornado, the Wichita Eagle reported.

The newspaper quoted a company spokesman as saying the expansion would enable Spirit AeroSystems to continue expanding programs with new technology and compete for additional parts business.

The Wichita decision shoots holes in the argument some have made that Tulsa should delay consideration of Vision2 incentives to Spirit and other aerospace employers in the city, said Tulsa Mayor Dewey Bartlett, co-chairman of the Vision2 campaign.

"We have to meet our competition," Bartlett said by telephone from Zurich, Switzerland, where he is traveling with Gov. Mary Fallin on a trip to meet with European employers in the Tulsa market. "There's way too much at stake."

Vision2's Proposition 1 contains nearly $387 million in economic development funding, including $254 million in buildings, infrastructure and equipment for three Tulsa airport industrial complex employers - American Airlines, Spirit AeroSystems and IC Bus. The same proposition also includes a deal closing fund of at least $52.9 million to entice new employers to locate here.

If Vision2 fails or "if we were to postpone this vote and sit around on our hands for a number of years, ... I think we would be on the losing end of keeping Spirit in Tulsa," said Bartlett, adding that he has no doubt other cities would attempt to take Tulsa's aerospace jobs.

"I guarantee you that they will be knocking on their doors very, very aggressively," Bartlett said.

Without the Vision2 work on the city-owned American Airlines maintenance base - the city's largest employer and the largest civilian air depot in the world - there is very little reason for the company to remain in Tulsa, Bartlett said.

"They're getting rid of the airplanes that are being maintained in Tulsa, and they've made commitments to buy airplanes that either Tulsa cannot hold in its hangars or we have very, very limited ability to hold in our hangars," Bartlett said. "They have to be maintained someplace. If they don't have facilities here that are to their needs, then they have no choice but to go someplace else. That's a fact."

Tulsa Metro Chamber President and CEO Mike Neal, also speaking from Zurich, said the need for the Vision2 package is urgent.

"People are trying to recruit our companies and our employers already today, and if we are not successful in passing this measure, they will only ramp up those efforts," Neal said. "It's really critical that the people of Tulsa County approve Proposition 1, which would make significant investment in our aerospace infrastructure."

Tulsa City Councilor G.T. Bynum is undecided on Vision2's Proposition 1, although he strongly supports Proposition 2. He says he is very uncomfortable with the city's getting involved in a bidding war for employers, which is what Proposition 1 sets up.

"The question that we as Tulsans have to ask ourselves is whether we want to play that game or not," Bynum said. "If we do, the mayor is absolutely right. Wichita clearly does want to play the game, but in my mind the problem and the concern that we run into is that there is an ever-escalating spiral. There's always going to be some city somewhere ready to pick off one of our local employers with more money."

The same problem vexes the proposal's closing fund, Bynum said.

"I don't like deal-closing funds because it puts you in the game with public money and elected people who are terrified of being the guy in office when the company leaves town, and so, based on fear, you pursue more and more tax dollars to direct toward private interests," Bynum said.

"I would rather we used public money to fix our streets and pay our police officers and firefighters and build dams on the Arkansas River and do those things that make this a safe, well-educated community that companies want to grow in."

About Vision2

Election date: Nov. 6

Amount: $748.8 million

Tax impact: Extension of 0.6 percent Vision 2025 sales tax from 2017 through 2029

PROPOSITION 1: ECONOMIC DEVELOPMENT

Airport industrial complex buildings and infrastructure: $122 million

Airport industrial complex equipment: $132 million

Closing fund: $52.942 million

Bond costs and interest: $79.938 million

PROPOSITION 2: QUALITY-OF-LIFE IMPROVEMENTS

Tulsa County: $92 million

Tulsa: $157.92 million

Bixby: $11.3 million

Broken Arrow: $44.1 million

Collinsville: $3 million

Glenpool: $5.9 million

Jenks: $9.2 million

Owasso: $14.38 million

Sand Springs: $10.1 million

Skiatook: $1.16 million

Sperry: $643,894

Bond costs and interest: $12 million

Original Print Headline: Wichita boost to Spirit may squeeze Tulsa

Wayne Greene 918-581-8308
wayne.greene@tulsaworld.com

Associated Images:

Mayor Dewey Bartlett: "We have to meet our competition."