For most of the past four years the redevelopment of the 900 block of New Hampshire street went according to plan for two Lawrence developers.

Now, with the economy in a downturn, the redevelopment efforts of what became known as the Downtown 2000 project have slowed dramatically.

But developers Martin Moore and Jeff Shmalberg remain optimistic the remainder of the project will eventually be finished.

“A lot of people have been watching this project and we’ve been talking to a lot of people,” Moore said.

In March, Moore and Shmalberg were still trying to lease retail space in a new three-story building at the southwest corner of 10th and New Hampshire streets.

Loft apartments

Interest in loft apartments on the upper two floors of the building completed last year has been high, they said. In early March, only a couple of the 20 apartments remained vacant, they said.

“It’s been a pretty mixed group,” Shmalberg said of the people who are leasing the apartments. “There are quite a few singles and some couples. There’s a professor and a graduate student.”

The apartments have either 600 or 950 square feet of living space. The monthly rent is about the same as the square footage, Martin and Shmalberg said.

Developers Marty Moore, left, and Jeff Shmalberg are trying to lease retail space in a three-story building at the southwest corner of 10th and New Hampshire streets.

“The rental component still needs attention,” Martin said.

Talks with one retailer fell through because it had a liquor component, Martin said. The company couldn’t work with Kansas liquor laws.

The terrorists attacks on 9-11, the war in Afghanistan and talk of war with Iraq have all affected the national economy and the retail and hotel industry in particular, Martin said.

Plans on hold

Before 9-11, retailers were more interested in Lawrence, Martin said. Now, however, retail is not expanding and those who are expanding prefer locating in larger cities, he said.

“Retail is slow here,” Martin said. “Retailers are going to cities with (a population) more than 200,000.”

Plans for a 100-room luxury hotel that would be built on the southwest corner of Ninth and New Hampshire streets are on hold. So is another office/retail building on the east side of the 900 block of New Hampshire.

“You want to anticipate when the market is going to go up,” Shmalberg said of the hotel industry. “Right now, we haven’t seen movement to indicate that it is.”

Plans for redeveloping the 900 block of New Hampshire began in the late 1990s. Shmalberg acquired land and knew there was a need for more parking for the area as well as for downtown.

Unique partnership

A unique partnership evolved with the city of Lawrence. The city agreed to build a 500-space garage that now is in use across from the new Lawrence Arts Center. The arts center opened last year.

In exchange for the city agreeing to build the $8 million garage, the developers asked that the city pay for it under a tax increment financing plan, referred to as TIF. A TIF allows new property and city sales taxes generated as a result of surrounding development to be used to help pay for a portion of the property.

Shmalberg met with downtown business and neighborhood groups east of downtown to discuss the development plans and find out their needs.

“If we didn’t have 100 meetings, then we had to come close,” Shmalberg said.

Now, however, many developments are on hold and the city isn’t collecting much TIF money. The developers had promised to pay the city $100,000 if all of the planned buildings weren’t under construction by September of this year.

Although it is still unclear if that construction will take place that soon, Shmalberg reamined optimistic about the future of the Downtown 2000 projects.

“We’ve all lived here a long time and we’re going to see it completed,” Shmalberg said.