Report urges city to slow retail market

It will be about more than just Wal-Mart tonight.

When city commissioners meet this evening to discuss a proposed Wal-Mart store at Sixth Street and Wakarusa Drive, they also will be urged to take a broader look at the city’s retail market.

Kirk McClure, an associate professor at Kansas University, has issued a new report that says the city’s retail market is seriously overbuilt, a situation he believes will lead to blight in older retail areas of town.

“We need to be very, very careful about the pace of growing retail other than in downtown,” said McClure, who teaches in KU’s urban planning program. “Right now we are so overbuilt on West Sixth Street that I think we need to call a halt out there and say ‘This is a mistake.’ We need to call for the developers to put things on hold.”

But some city commissioners are rejecting such assertions.

“I think that is a disingenuous look at what the true picture is in Lawrence,” Mayor Sue Hack said. “I think there are absolutely a lot of questions about the numbers flying around here.”

But McClure thinks the trend is clear. Since 1995, the amount of retail space in the city has grown each year by 3 percent, he said. But the amount of sales tax dollars collected – adjusted for inflation – has grown only by 1 percent a year.

But Hack said people need to be careful as they examine those numbers. For example, in figuring that Lawrence retail space is growing by 3 percent per year, McClure is counting the growth in the number of banks, professional offices and hotels. But none of those uses – which account for about 25 percent of the total commercial space counted by McClure – charges sales tax for its services.

That means banks, professional offices and hotels are being used to show the growth in retail space in the city, but none of the revenues produced by those businesses is being used to calculate the amount of retail demand in the city.

Hack said that’s why the city should not rely too heavily on McClure’s findings. Instead, she said the Wal-Mart proposal already has successfully completed a retail market analysis approved by the city’s Planning Department. Hack also said McClure’s findings are different from a 2005 report by a consultant hired by the city to look at the community’s retail market.

That report found the city was losing significant amounts of sales tax dollars because residents were traveling to Topeka or Kansas City to shop.

“I just do not believe we’re overbuilt,” Hack said. “I think what we need to do is start working to capture retail dollars that we’re losing out of town.”

McClure defended the results of his study. He said there was no perfect way to measure the city’s retail market. But he said in addition to sales tax numbers, he looked at vacancy rates and data related to the number of retail businesses operating in the city to determine that the city is overbuilt.

McClure’s study showed an overall vacancy rate of 8.3 percent in the city. That’s significantly different from the 3.9 percent vacancy rate in the 2005 study commissioned by the city.

Commissioners meet at 6:35 p.m. today at City Hall, Sixth and Massachusetts streets. Commissioners won’t decide whether to approve or reject a new Wal-Mart store. Instead, they’ll talk with developers about what could occur at the site.

The project is the subject of a lawsuit in Douglas County District Court. Developers have alleged that the city illegally denied a building permit for the project. Both sides agreed to put the lawsuit on hold until two new city commissioners – elected in the April 3 elections – had a chance to review the project.