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[the shadow]

Pompeo's, Hartman's businesses sought, and got, government benefits
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BY DION LEFLER
The Wichita Eagle
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On the campaign trail, congressional candidates Mike Pompeo and Wink Hartman have called for less government involvement in business.

But both also have received government benefits for their businesses.

Thayer Aerospace and a plating company owned by Thayer applied for and received at least $85,000 in business development support from the Kansas Department of Commerce, while Pompeo was the company's chief executive.

In addition, Pompeo was an investor in and served on the board of a Hutchinson wind-turbine company that benefited from a complex business development transaction involving $1.5 million in public money.

Hartman received a property tax abatement from Park City, worth about $5 million over 10 years, when he built the Hartman arena there last year.

In a response to e-mailed questions, the Pompeo campaign issued a statement saying he did not remember the specific programs, but that they would not have been inconsistent with his actions as an executive or his belief "that government needs to get out of the way of entrepreneurs."

"While these programs helped save jobs in Wichita, in the long term programs such as these are not sustainable. Just look at the national debt," the statement said.

Hartman said the business incentive he received to put the arena in Park City was offered by the city and is consistent with his philosophy opposing government stimulus and favoring a hands-off approach to business.

"I did not receive any money from the taxpayers of Kansas," Hartman said. "I put $18 million of my own money into Park City."

Pompeo's businesses

A week after The Eagle requested documentation on Kansas Department of Commerce assistance to Pompeo's businesses, department spokesman Joe Monaco said KDOC was unable to provide any information.

But the department's 2001 annual report shows that Thayer received a forgivable loan from KDOC through its Kansas Economic Opportunity Initiatives Fund.

The entry in the annual report said the money, $40,000, would be used for "acquisition of new equipment and technology and facility modification"

It projected that Thayer would invest $4.75 million and create 60 new jobs over a five-year period.

In addition, when Thayer bought a company called Air Capitol Plating and replaced its computer software, it acquired a $45,000 grant from the Commerce Department to help pay the cost of retraining employees to use the new system, according to news reports at the time.

The Pompeo statement said that he would have preferred to forgo all incentives and "compete in the free market," but his business had to compete with others who qualified for the government programs.

"His obligation to his employees, their families and shareholders, made his decisions at Thayer the right decisions for that time and position," the statement said.

Pompeo also was an investor and director of Sunflower Wind, a company that moved into factory space in Hutchinson vacated by the Eaton Corp.

To keep Eaton from leaving Hutchinson entirely, the city and Reno County had agreed to pay Eaton $1.5 million. The money was originally intended to help Eaton modernize its remaining plant or demolish its unwanted space, officials said.

Later, the governmental bodies rerouted the money to help Sunflower Wind acquire the building.

"Eaton is now asking that the original agreement be modified so the money paid to Eaton by the city and county would be described as the purchase price of the building," according to 2007 City Council minutes. "The building will be sold by Eaton to Growth Inc. (the economic development arm of the Chamber of Commerce), then to Sunflower Wind."

Sunflower Wind paid $150,000 for the building, plus about $500,000 to $600,000 in improvements, officials said.

The appraised value of the building in 2008 was $1.79 million, based on county records.

"Businesses are only able to compete within the framework provided and unfortunately government has become too much of that framework," Pompeo's statement said.

Hartman's arena

The Hartman Arena was built using industrial revenue bonds approved by Park City.

The main benefit for Hartman was that such financing comes with property tax abatement for 10 years.

Hartman said that is not ideologically inconsistent because his view is that lower taxes spur business development, and the tax abatements for his arena confirm that.

According to records of the Sedgwick County appraiser's office, the arena pays about $530,000 less a year in property taxes than it would if the entire $19 million structure were on the tax roles.

An economic development study forecast that the total tax abatement would equal about $5.1 million over the arena's first 10 years.

So that Park City wouldn't see a reduction in property taxes, Hartman did agree to pay tax on the value of the site before the development of the arena, about $1,150 a year.

He also pays special assessments of $8,946, the county records show.

Hartman said there's a difference between industrial revenue financing and taking direct payment from the government.

He said through increased economic activity and sales tax, the arena is paying back the tax abatements the project received.

In its first nine months of operation last year, the arena generated nearly $1.5 million in economic activity in Park City, including salaries, utilities, supplies and payments for security and parking control, Hartman said.

In addition, the arena generated $135,577 in sales tax paid to the county and state for the nine months, Hartman said.

The arena is projected to generate a larger amount of sales tax for 2010, because that will be a full year of operation and the state raised the sales tax rate by a percentage point mid-year.

The economic study the city used to approve the plan forecast that the project would generate $128 million in total economic benefits to the city, county, state and school district over 10 years, against about $5.6 million in additional cost to government.



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[Wilma]

This morning's paper shows that Hartman and Pompei have both dropped in the polls.  Jean Schodorf has gained and is in 2nd place now.  Pompei still has a small lead, but Hartman has dropped to 3rd.  Jim Anderson has also gained.  It looks as if the voters are beginning to realize just who is telling the truth and who is just blowing hot air.  Maybe that is why it has been so hot here recently.