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Archive for Wednesday, November 28, 1990

TAX ABATEMENT REQUEST GETS CONDITIONAL APPROVAL FROM CITY

November 28, 1990

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The Lawrence City Commission gave its initial nod to a tax abatement request sought by a new company being formed by Lawrence entreprenuer David Kimbrell, but the fate of another firm's request for tax breaks to locate in the city remains unresolved.

The commission, which met Tuesday, approved a request by Scanning USA for a 10-year, 50 percent abatement from property taxes on buildings and real estate for its venture which will be located in Oread West Research Park. The abatement is conditioned on the approval of an $850,000 industrial revenue bond issue, which the commission will consider after a public hearing on Dec. 11.

Commissioners did not, however, reach any further decision on the fate of a request by Famous Brands Liquor, which is seeking a 10-year, 50 percent abatement in exchange for locating a warehouse and distribution center in the Timberedge Industrial Park.

The Scanning America request was approved by the commission on a 4-1 vote. The company, headed by Kimbrell, the co-founder and former owner of Hall-Kimbrell Environmental Services, is starting a nationwide, employee-owned business in which hand-drawn architectural plans are converted to computer software. Scanning America plans to employ 60 people locally with annual payroll of more than $1.4 million.

Even Commissioner Mike Rundle, who cast the lone dissenting vote, praised the company for its plans.

"IT IS a clean industry, there are good jobs. . . . The idea that they're going to employ local people is very important, because the expectation, I think, would be that they could probably find qualified people from outside the community," Rundle said.

But Rundle said he opposed the abatement because Scanning USA was adamantly against entering into an agreement with the city in which the company guaranteed its employment claims in exchange for the abatement.

"I think we need to have agreements. I think it can be worked out to the mutual satisfaction of the applicants and ourselves. Otherwise, I think this is an outstanding application," Rundle said.

Other commissioners pointed to the number and quality of the jobs, which the firm says will pay average salaries of $25,000 annually, along with Kimbrell's track record in Lawrence as reasons for granting the abatement.

The general agreement displayed on the Scanning USA request, however, dissipated later in the meeting when the commission again discussed the situation surrounding Famous Brands.

A WEEK AGO, the commission turned back Famous Brands' request for a 10-year, 50 percent abatement on a 2-2 tie vote with Commissioner David Penny absent. Instead, the commission offered a five-year, 25 percent abatement on the proposed liquor warehouse.

On Tuesday morning, Thomas Schwartz, chairman of Famous Brands notified the city that the company would not locate in Lawrence unless the city reconsidered and approved its original request.

Commissioner Bob Schumm pressed Penny to see if he had any desire to cast a tie-breaking vote on the original Famous Brands' request. Penny, who normally abstains from votes on liquor-related issues before the commission because of his stand against substance abuse, said he had not made a determination.

"At this point, I probably would still be an abstention vote," he said.

Until Penny decides whether he will vote on the issue and he indicated he would make a decision by the commission's next meeting, Dec. 11 the issue remains unresolved.

SCHUMM USED the Famous Brands discussion as an opportunity to express his concern over what he called "a very difficult situation for a lot of people."

He took exception to an editorial in the Journal-World and the actions of local chamber of commerce representatives. He said he felt commissioners were being wrongly castigated for making their decision on Famous Brands in a public setting.

"I will not make any deals behind closed doors," Schumm said. "This is the second time in two different tax abatement issues one was Sprint in which the editor of the newspaper has indicated deals were being made behind closed doors. If that is happening, I would challenge the commissioners to stop doing it. It's in complete reverse of the Kansas Open Meetings Law."

Chamber representatives, Schumm said, had lobbied him extensively outside of city hall to approve the 50 percent abatement request. The intense, private lobbying continued, he said, as chamber officials tried to persuade him to reconsider his decision to oppose the full abatement request.

"I think the proper place to make the decision is out here in the public and that's why we have a public meeting forum," he said.

The chair-elect of the chamber, Hank Booth, disputed Schumm's assertions that the chamber exerted pressure on commissioners.

"There's been no organized effort by the chamber of commerce to talk to Bob Schumm or any of the commissioners on this issue," Booth said today.

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