Archive for Sunday, June 10, 2007

Sales tax shuffle

Different, not more of the same businesses, may be the key to keeping more sales tax dollars in Lawrence.

June 10, 2007

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Sales tax revenue is an important funding source for Lawrence and Douglas County government. A shortfall in estimated sales tax revenue for this year is prompting the city to look at serious budget cuts, and a new 1 percent sales tax is being considered as a way to fund city key projects without raising property taxes.

The current attention on sales tax also puts additional focus on retail operations that generate sales tax revenue for Lawrence. As has always been the case, officials are concerned about the number of Lawrence residents who shop elsewhere and the limited success Lawrence has in drawing shoppers from surrounding areas.

Being sandwiched between Topeka and Kansas City, makes it easy for shoppers to spend their retail dollars elsewhere, so how does Lawrence attack that trend?

Attracting new retail businesses to the city is the obvious answer, but not all retail businesses, it seems, produce the same level of benefit for the local market.

If Lawrence is trying to raise sales tax revenue, the best kind of business to have is something that no one else has, a business with products or services that aren't readily available elsewhere. Lawrence people would want to shop there, and it's worth the trip for people from out of town. Lawrence already has some of those businesses, many of them in our attractive downtown.

Businesses that are different, but not unique, also have some drawing power. The new CVS store being built at 23rd and Iowa streets will offer many of the same products and services already available at other locally owned and chain stores in Lawrence. However, it may attract at least a few customers who prefer CVS over the other options and find it more convenient to come to Lawrence than to other cities where CVS is located. It also benefits consumers by providing additional choice and competition.

The new businesses that probably do the least to boost local sales taxes are duplicates of existing businesses. A second Wal-Mart store in Lawrence would be expected to collect more sales tax than the smaller CVS store, but it seems unlikely the company will double its sales by doubling its number stores in Lawrence.

A few shoppers from Lecompton or Perry might drive to Sixth Street and Wakarusa Drive instead of Topeka to shop at a new Wal-Mart, but will the store do as much to keep shoppers in Lawrence or draw them from surrounding areas as even a similar store from a competing chain? A Kmart store, for instance, might attract shoppers who want to buy Martha Stewart sheets, which are available in Kmarts in other cities, but not at Wal-Mart.

This isn't a knock on Wal-Mart, nor is it a plea for additional government micromanaging of what businesses should be allowed to locate in Lawrence. It might be just idle speculation or it might be something local developers should consider as they plan new retail shopping areas. With rising gasoline prices and busy schedules, many shoppers would prefer to shop closer to home - and people are going to be less willing to drive to another city to shop unless it has something special to offer.

If Lawrence really wants to boost its sales tax revenue, it needs to change its attitude about retail business and the downtown and figure out ways to offer a convenient, attractive and easy-to-access retail experience that shoppers can't find in other nearby cities.

Comments

armyguy 7 years, 11 months ago

I wonder who wrote this that they didn't know that there was a Kmart for many years in Lawrence, I think it closed about 4 years ago.

Kookamooka 7 years, 11 months ago

Good point. Having a second Walmart in town isn't going to encourage me to buy things there. I resist shopping at Walmart on the grounds that I just don't need any more cheap plastic stuff made in China. I won't shop there even if they build a new mega store in my front yard. We pretty much drive to KC because we know we can get more selection at lower prices.

Wyandotte County has done a great job of attracting the destination retailers like Nebraska Furniture Mart and Cabelas. Does Lawrence really want a piece of that pie? If we do...we should get on the phone with the Bass Pro Shop people. But Lawrence doesn't really want that. Besides, the big national glam stores like Banana Republic and Designer stores like Gucci won't rent store fronts in small towns our size. Sorry Hobbes-Taylor.

News_to_me 7 years, 11 months ago

I was thinking about this the other day when I was downtown. Those unique stores downtown are what draw shoppers to our city, not WalMart or Home Depot or Target. You see people get out of cars with license tags from other states or counties and you know they are looking for a different shopping experience. They will most likely find it in our downtown.

Granted, we need the other types of stores, but our downtown is and will be our biggest draw. There is no reason why both types of shopping can't co-exist. If folks who live here don't want to shop downtown, that's fine but they must realize its importance in bringing in tax dollars.

Likewise, the point about different types of stores, as opposed to more of the same, is well taken. However, I don't believe that developers are the best stewards of that goal with their desire to sell to the highest bidder. Sure, it is something they should consider as they plan new retail shopping areas. But will that be foremost in their minds? Not likely.

classclown 7 years, 11 months ago

"You see people get out of cars with license tags from other states or counties and you know they are looking for a different shopping experience."

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Point to ponder:

Do all those cars with out of county/state tags really belong to people from out of county/state that are for some reason drawn to Lawrence's quaint downtown to do their shopping? Or is it more likely that those vehicles belong to students at KU who typically do the downtown scene?

Discuss amongst yourselves.

Sigmund 7 years, 11 months ago

Lawrence is full of commuters to Topeka and KC. Many of those people end up doing shopping outside of Lawrence because it is just quicker and cheaper. Who wants to have to drive on South Iowa to a Target or Walmart after a commute if you don't live in South Lawrence? Have you driven Iowa around 5PM lately? The 6th and Wak Walmart is an attempt to capture those commuter dollars that would otherwise be spent in Topeka and KC, and the sales taxes, by putting a Walmart closer to West Lawrence residents many who commute.

Sigmund 7 years, 11 months ago

And BTW, few of those commuters are going to spend those dollars downtown. The last thing they are going to do is rush downtown, try and find parking, and try to rush into a store before it closes.

idara 7 years, 11 months ago

I think Sigmund brings up a good point about the downtown parking. I live in Eudora where there is no shopping, and I prefer to shop in Douglas county to keep the money more local if possible. But there have been many times when I've gone to Olathe or Lenexa to shop instead of Lawrence just because I don't want to mess with the parking situation.

Richard Heckler 7 years, 11 months ago

Lawrence should consider NOT trying to compete with Legends,Topeka, KCMO/JOCO/Olathe metro retail centers. Increase the student population with a VoTech Campus..students are good for business.

Build on our tourism traffic with more biking activity, increase frequency of art fairs with some downtown as Westport and the Plaza do by blocking off streets. Tourism is good for Lawrence because we reap the profits from existing resources without spending much to do so. Visitors come,have fun,spend some money and go home...a win win win situation. This is why all cities love tourism. The music festival is a prime example of how existing resources( green space) make money for the community.

Quit sending sports activities to KCMO etc. etc.

Don't expect COSTCO to come with a 207,000 sq ft Wal-Mart in our town. Don't expect Lowe's to come with Home Depot already here. Not enough business in Lawrence and both HD and WM are aggressive.

This letter writer has some respectable thoughts: To the editor:

Much has been written lately about our drop in sales tax and about the Wal-Mart that is going to be shoved down our throats.

I'll bet if research was done, it would be clear that much of our retail sales are being lost to the Legends in Wyandotte County. It's not far, and many of our out-of-town shoppers are probably going there instead. So our answer to that is to build another Wal-Mart? I'm real sure this is going to tear shoppers away from the Legends. People will drive from miles around for a unique shopping experience.

We need to lower the property taxes on buildings downtown, and even (I can't believe I'm saying this) get more corporate stores to come in, but still encourage a mix of unique locally owned stores. Then advertise the shopping experience of downtown Lawrence in the surrounding cities. More events like the Film Noir series will help.

Also, has anyone considered opening a children's center where people can leave their children with caregivers while they shop? There are better ways to increase our retail sales than building a duplicate of a store that already exists.

Even a Costco or a Lowe's would be better than Wal-Mart.

Dorothy Hoyt-Reed,

Lawrence

Stephen Roberts 7 years, 11 months ago

Boy I must be one of the few people who would go to the Wal-Mart at 6th street. Since i work in Topeka, i run errands during lunch and buy some things from the Wal-mart in Topeka. Aal-mart would be right along the way home and I woul denjoy having my lunch to relax.

Ponder these questions.

Would there been any problem if a Nordstroms, Gordmans or any more expensive store wanted to locate there if the circumstances where the same?

Why do the vocal minority say they speak for the majority?

During the last elections, why didn't these vocal people try to organize and anti wal mart and an anti development campaign. Oh I guess they did Schauner and the other person were not elected. The commissioners who were elected have business experience and not government work experience.

erod0723 7 years, 11 months ago

If it was Target wanting to put a store at 6th and Wakarusa, would anyone be complaining? Not likely.

Godot 7 years, 11 months ago

Musicians, writers, dancers, actors and artists are the unique "thing" that will draw tourists to Lawrence. They are here, many of them doing their thing for next to nothing just to have an outlet. A few smart producer/promoters could turn downtown into a hot, hot entertainment district, but it would require the City Commission to relax the rules on alcohol and food.....and smoking.

Confrontation 7 years, 11 months ago

I shopped at Legends this weekend. I get sick of Lawrence and dread the thought of dealing with the idiot drivers in this town. I-70 is more peaceful. I don't feel guilty at all for taking my money elsewhere.

micah6_8 7 years, 10 months ago

"A few shoppers from Lecompton or Perry might drive to Sixth Street and Wakarusa Drive instead of Topeka to shop at a new Wal-Mart"

How deprecating! As usual, it seems the only people of any consequence are the blessed elite of Lawrence. After all, what good could a handful of cowtown sod-busters from Perry or Lecompton add that would be in any way beneficial to such a fine place like Lawrence? Or Big Springs, Oskaloosa, Ozawkie, Meriden, McLouth, Williamstown, Thompsonville, or Dunavant, for that matter?

Are all of these "little" towns of so little importance that they are dismissed with so little regard? As if their contributions to the retail sales taxes mean nothing?

Honestly, with this kind of attitude, would it surprise anyone if the people in the good towns surrounding the "Emerald City" of Lawrence took their business elsewhere?

signed, No One

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