Another wave of rising property valuations is about to flood downtown Lawrence.

And Jon Francis hopes the district’s mom-and-pop shops don’t drown in the rising tax bills.

“It’s horrible timing,” said Francis, owner of Francis Sporting Goods Inc., 731 Mass., and president of Downtown Lawrence Inc. “You have a poor economy, and the landlords — if the valuations are increasing, they’ll pass the costs along to the tenants.”

Downtown property owners will be among those getting written confirmation of their rising property values beginning today, when Douglas County Appraiser Marion Johnson drops 35,000 change-of-value notices into the mail.

Property owners in the central business district — an area generally bordered by Sixth, 11th, Vermont and New Hampshire streets — generally will see the biggest increases in town, typically ranging from 10 percent to 15 percent, Johnson said.

Downtown property values, especially among the district’s prime Massachusetts Street addresses, are rising at least three times faster than Lawrence’s overall commercial market, Johnson said, which is checking in with increases this year of 3 percent to 5 percent.

Demand is driving downtown’s rise, he said.

Seven properties changed hands in downtown Lawrence last year, and all sold for considerably more than their appraised values, said Sharon Dominik, the county’s commercial appraiser manager.

In past years, some downtown business owners have lamented the influx of national retailers — claiming that the chains unleashed an array of valuation increases by allowing property owners to charge above-market rents.

Rising property valuations will soon be hitting downtown Lawrence. Values in the city's central business district are rising at least three times faster than Lawrence's overall commercial market, county officials say. On Thursday, shoppers met at the corner of Seventh and Massachusetts streets.

Buying local

Last year, however, the buyers of the seven properties all were local, Dominik said, and all retain tenants with local ties.

Two of the buildings were purchased by partnerships headed by George Paley, a longtime downtown property owner and businessman; and three were acquired by Doug Compton, president of First Management Inc. and a former Lawrence city commissioner.

In all, according to county figures, the seven properties sold for about 33 percent more than their average valuation in 2002. The new owners of the seven properties paid a total of $2.69 million, up from $1.94 million valuation set by the county only a year earlier.

County values are supposed to be set at a range of 90 percent to 110 percent of what a property would sell for, she said.

“No longer can we ignore this,” Dominik said.

¢ 6News video: Downtown sees property values spike¢ County details valuation increases (3-3-03)¢Douglas County 2001 property valuation search

Compton acknowledges he paid “big dollars” for his latest downtown investments: 837 Mass., home of Jock’s Nitch Sporting Goods; 623 Vt., occupied by Rick’s Neighborhood Bar & Grill; and 5-7 E. Seventh St., home of Game Guy and, until last week, Kaw Specialties.

Last year Compton bought 805 Mass., home to The Buckle, and he’s currently looking at three other downtown properties as possible purchases.

Property appreciation

The property manager, owner and developer simply wanted to move into the hot downtown market, he said, while diversifying a property portfolio that includes several strip commercial centers and hundreds of apartments.

Even as his purchases help boost land values — and likely result in higher tax bills — Compton’s hoping that his new neighbors won’t hold it against him.

“I apologize if I did something that would seem to be a hardship; that was not our intention,” Compton said. “Our intention was to make an investment in real estate based on a return that will be satisfactory.

“I think people have done an incredible job preserving downtown Lawrence. That’s what attracts people like me to invest in downtown Lawrence.”

Francis, whose family has run his downtown sporting goods shop since 1947, doesn’t blame investors for moving in.

“Sometimes you’re not paying for actual value. You’re paying for blue sky, and that’s a good sign for downtown Lawrence,” Francis said. “The property values increase, and that shows people have an interest in downtown Lawrence. There’s more value than the actual structure itself.

“But obviously, the harder you make it on somebody, the more difficult it will be to survive. I’m sure some people will have to tighten up a little bit.”

Francis already is taking advantage of a facade renovation within the past few years, and last year joined a buying group to secure the lowest prices for merchandise at his homegrown shop. Even in rough economic waters, he said, sales are up 25 percent from a year ago.

“The strong survive,” he said.