It will cost the city tens of millions of dollars to expand the community into new areas, according to a study commissioned by City Hall.
For example, want new homes and businesses west of the South Lawrence Trafficway? It will cost city taxpayers an additional $94.4 million in taxes and fees over 20 years. The city expenses - which are over and above the taxes the development would generate - would pay for roads, police and fire protection, parks and other amenities.
The $150,000 study by the Maryland-based consulting firm of TischlerBise states the city needs to strongly consider creating new revenue streams - such as impact fees, one-time fees placed on a development to pay for its infrastructure.
The study also looked at the cost for the city to expand into three other areas. The study found that:
¢ Industrial development near the Lawrence airport would cost the city $19.3 million more in expenses during a 20-year period than it would collect in new taxes or fees.
¢ A mix of offices, commercial space and about 13,000 homes south of the Wakarusa River would create a net deficit of about $84.9 million to the city during a 20-year period.
¢ Development of the area southeast of 23rd Street and O'Connell Drive would create a deficit of $55 million over 20 years, if it was largely developed with residential uses. If the area was developed with more industrial and office park uses, the deficit would drop to $36.9 million during the 20-year period.
The study is sure to spark disagreement in the community, City Manager David Corliss said.
"The study is based on assumptions and methodology that the firm uses nationwide," Corliss said. "But there will be very good people who have done a lot for this community that will fundamentally disagree with the assumptions that this firm uses."
Mayor Mike Amyx said the report creates more questions than answers. That's in part because a previous report released in March 2006 by TischlerBise indicated that growth was doing a reasonable job of paying for itself, Amyx said.
That 2006 study found that five out of the six categories of nonresidential growth - such as retail stores and manufacturing plants - paid more in taxes than the city spent to provide them service. The previous study also found that two of the four residential categories came very close to breaking even. Duplexes produced a net deficit of $9 per unit, while traditional single-family homes produced a deficit of $26. Apartments were the biggest deficit generator at $341 per unit.
City leaders said they wanted to hear an explanation from lead consultant Carson Bise on how to interpret the results of the two studies. Bise was unavailable Monday.
City leaders also said they wanted an explanation on why the report did not address the benefits of more retail development in the community. The previous report showed that big box retail development produced a surplus of $2,700 in taxes for every 1,000 square feet of big box retail space in the city. Yet, when the second report listed recommendations for types of development the city should encourage, it did not list retail development. The issue of whether to allow new retail development has become a contentious political issue on the commission in the last several months.
Commissioners will receive the report as part of their consent agenda at their 6:35 p.m. meeting today at City Hall, Sixth and Massachusetts streets.