Kansas is digging a $1 billion mystery hole. What could go wrong?

February 13, 2022 3:33 am

The interior of the Big Well at Greensburg, as it appeared in 2007. The hand-dug well is 109 feet deep. (Max McCoy/Kansas Reflector)

It’s the biggest financial incentive package in state history.

Yet we don’t know the name of the firm lawmakers have decided to woo with this unprecedented and risky deal, which would provide the mystery company at least $1 billion in tax breaks, payroll subsidy, state-funded employee training and other incentives. The sheer size of the offer and the secrecy surrounding it are red flags for experts, but it has bipartisan support from Democratic Gov. Laura Kelly and the state’s GOP-controlled Legislature.

Watching the deal unfold left me with a queasy feeling in my gut.

It also has me thinking of a big hole in the ground out in western Kansas that promised to be an economic miracle for a struggling community but which turned out to be just a wicked big hole in the ground.

Have you been to the Big Well?

Back in 1878, the good folks at Greensburg decided that what they needed for economic growth was water. The railroad was coming, and the locomotives would need water to slake their iron thirst. But western Kansas is notoriously dry, and the Arkansas River was 20 miles away. So the Greensburg Water Supply and Hydraulic Power Company was organized. With a franchise from the city, the company spent $75,000 digging a well that was 109 feet deep and 32 feet in diameter. Using a complicated series of steam-powered hydraulics, the water was pumped to the surface and beyond, where it was stored in a 90-foot tower.

Rep. Sean Tarwater, chairman of the House Commerce, Labor and Economic Development Committee, said the megaproject incentive bill sent to the House by the Senate lacked several key assurances and provisions. A revised version ended up passing. (Noah Taborda/Kansas Reflector)

In the last few days, both chambers of the Kansas Legislature passed the APEX Act, which stands for Attracting Powerful Economic Expansion. By the time you read this, the governor already signed the damned thing, offering the Sunflower state’s mystery date a $1 billion valentine.

If there were any doubts that state government in Kansas is absolutely committed to secrecy, this deal should put an end to them. We came to expect secrecy under the administration of Sam Brownback, but it hasn’t gotten much better under Kelly. Individuals privy to the identity of the mystery firm, from those in the commerce department to the Statehouse, are bound by nondisclosure agreements. The idea of such a massive state effort to lure a private sector firm to Kansas being shrouded in layers of secrecy leaves a stench that won’t soon be forgotten.

What we do know has come out in dribs and drabs, little teasers to make us feel better about what we don’t know. The private sector firm would employ 4,000, be a feather in our economic cap, and “inject $4 billion” into the Kansas economy. Of course the identity and even nature of the firm must be kept secret, because that’s just the way it goes these days in the high-stakes world of business incentives; such disclosure might spook the potential investor, as a skittish and monied deer in the terrifying spotlight of public disclosure.

There was haste to pass the legislation authorizing the package, we were told, because there was a similar deal burbling through the Oklahoma statehouse. Now that Kansas has finalized its bid, there’s nothing to stop Private Sector Mystery Firm from using it to leverage more concessions from Oklahoma or whatever other state is willing to play the game. Shouldn’t we also know why the firm wants to relocate? What issue is driving it to look for a new home? Is it a way to bust a union?

Or, what if PSMF takes the offer and plops its toxin-producing chemical plant in your favorite patch of Kansas? There’s no suggestion the courted manufacturer makes anything more toxic than shea butter soap, but odds are that any manufacturer experiencing a boom is likely to make something — chips, textiles, batteries, auto parts — that pose environmental challenges. My money for a private sector manufacturer that might eventually need its suppliers to locate nearby, as described by commerce officials, is auto parts. And, I will own up to a hypocritical and irrational bias here: If the company makes Jeep parts, then I’m down with it.

But what if the firm is one to which many Kansans would have a moral objection, such as a new spaceport for billionaire rocket men Elon Musk or Jeff Bezos? Or something just as tumescent but more lethal? What if PSMF is DOD contractor Primus Scientific Missile Facility? Hmm, all that talk of injection and powerful expansion would make sense.

But what if the firm is one to which many Kansans would have a moral objection, such as a new spaceport for billionaire rocket men Elon Musk or Jeff Bezos? Or something just as tumescent but more lethal?

– Max McCoy

OK, hold the hate emails, it’s probably not going to be missiles.

But no matter what the firm makes, the deal should give Kansans pause.

The sheer size of it — at least $1 billion in tax cuts, payroll subsidies and other incentives — is difficult to comprehend. How much money is that, exactly? Let’s get a handle on it. Median household income in Kansas is close to $60,000, according to the U.S. Census Bureau. So that treasure mountain of incentives equals the median income of 16,666 families. Think of that as a median wage for the entire population of Salina.

The APEX Act proves that Kansas has no real interest in taking care of the state’s working families. It’s aimed at taking care of business, and it may ultimately be at the expense of more worthy projects, such as investing in higher education or shoring up the state employee retirement fund. If only the Legislature felt the same urgency in expanding Medicaid as it did in coming up with a dowry for private sector investor, we’d all be in a better state.

Even if the APEX Act results in bringing an economic miracle to Kansas, with this mystery firm or some other, we should be alarmed at the way the legislation was passed. It wasn’t just citizens who were left in the dark, but many lawmakers as well. Legislators shouldn’t have to sign an NDA to learn the identity of a firm being courted before voting to make the deal happen. State law has more than enough safeguards to protect the legitimate privacy interests of individuals and businesses. When lawmakers are required to sign NDAs to gain essential information to cast an informed vote, it makes a mockery of the transparency that should guide government.

It’s a bad precedent. It sets a grubby political tone more suited to porn stars and philandering presidential hopefuls. While the use of NDAs has become common in incentive packages for Amazon and other mega companies, it stifles public input into deals with far-reaching and potentially disastrous outcomes.

The visitor’s center at the Big Well at Greensburg, as it appeared before it was destroyed by the 2007 tornado. The hand-dug well was a massive 1887 project designed to lure the railroad to town, but went bankrupt and eventually became a tourist attraction. (Max McCoy/Kansas Reflector)

Back to the story of the Big Well.

“The construction of this system of water-works will not only boom our city but will furnish employment for a large force of men,” trumpeted the Greensburg Republican of Aug. 3, 1887. The nearest railroad was still 30 miles away, the newspaper noted, but the easy availability of water would surely be an attraction. Construction began, and the well was laboriously dug — by hand. There were problems from the start, including the misfortune of cracked steam boilers. But eventually, the project was finished, although it went over budget by 50%.

The railroad did come, but the waterworks project had been so expensive the company had trouble paying its debts. Lawsuits were filed. Then came the national economic panic of 1893, and the railroad left Greensburg. The Greensburg Water Supply and Hydraulic Power Company eventually went into receivership. Most of the debt was owed to out-of-state banks. The city ended up buying enough of the company to secure the well, for municipal water use, but much of the infrastructure was sold off.

The 90-foot water tower was sold.

It went to Ada, Oklahoma.

The story of Greensburg’s Big Well wasn’t over, because in 1939 it was opened as a tourist attraction. Over the decades, dozens or perhaps hundreds of signs were put up alongside highways in western Kansas, urging visitors to tour the “world’s largest hand-dug well.” This was an exaggeration, because the Greensburg well doesn’t come close to the size of the Woodingdean Water Well in England, at 1,280 feet deep.

At Greensburg, tourists could pay a couple of dollars to walk down a flight of stairs to the pool at the bottom. It was fun, in its way. In 2007, the visitor’s center at the well’s entrance was destroyed by the killer Greensburg tornado. It has since been replaced with a modern center and tours resumed.

The Big Well remains a monument to an ambitious economic development project that failed. Through overconfidence and bad timing, the well failed to keep the railroad in town. Greensburg never fulfilled what its founders thought was an early promise of greatness, but for decades it’s been a quirky Kansas icon built on a bit of roadside hyperbole.

Things change, of course. Technology advances.

But our desire for economic miracles can sink us ever deeper into great wells of our own making.

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Max McCoy
Max McCoy

Max McCoy is an award-winning author and journalist. A native Kansan, he started his career at the Pittsburg Morning Sun and was soon writing for national magazines. His investigative stories on unsolved murders, serial killers and hate groups earned him first-place awards from the Associated Press Managing Editors and other organizations. McCoy has also written more than 20 books, the most recent of which is "Elevations: A Personal Exploration of the Arkansas River," named a Kansas Notable Book by the state library. "Elevations" also won the National Outdoor Book Award, in the history/biography category. Max teaches journalism at Emporia State University.