Archive for Monday, April 6, 2009

Downtown providing less of city’s sales tax revenue

A new report shows downtown Lawrence may be losing some steam as an economic engine.

April 6, 2009

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If Downtown Lawrence is the city’s economic engine, it has been losing horsepower this decade, a new report from City Hall indicates.

An analysis of sales tax collections shows that Downtown Lawrence is accounting for a smaller percentage of the city’s overall retail, restaurant and bar sales.

It’s a trend that is starting to create some worry among traditional downtown retailers.

“Look at Arensberg’s going out of business,” said Galen Tarman, owner of the downtown furniture store Blue Heron. “I don’t know what is going to happen in the future, but I know there are a lot of retailers who are suffering right now.”

According to the new report, Downtown Lawrence generated about 8 percent of the city’s total sales tax collections in 2001. In 2008, that figure had fallen to about 6.5 percent.

In essence, Downtown Lawrence is losing market share.

“I think part of that has been the kinds of businesses that have left downtown,” said Mayor Mike Dever, who said he has concerns that downtown has lost several retailers of larger ticket items over the years. “We need to do what we can to embrace the idea of people shopping downtown for goods other than just boutique items.”

Downtown has been losing market share even though other parts of Lawrence haven’t been growing rapidly either — despite what sales tax collections have shown.

For much of the decade, Lawrence has posted increases in sales tax collections, but the city’s new analysis indicates much of that growth has come as a result of inflation rather than a growth in the quantity of goods purchased.

The new report adjusted retail sales in Lawrence to account for inflation, and found that from 2002 through 2008 retail sales grew only by 1.8 percent. Not adjusted for inflation, retail sales grew by 19 percent — from $1.08 billion to $1.29 billion.

Lawrence retailers said the decline in the downtown’s market share is running counter to property values. Tarman said real estate taxes on his Massachusetts Street property have nearly tripled over the last 10 years. Other retailers said they believe similar property tax increases have caused other businesses to close in downtown.

“I still think we have an exceptional downtown,” said Joe Flannery, president of Weavers Department Store. “But the biggest concerns I think we all have are the vacancies and the amount real estate taxes have gone up.”

Other news from the city’s Economic Barometer Report — which will be produced quarterly — included:

• Shoppers in Douglas County slowed their holiday spending. Sales tax totals for Douglas County in the fourth quarter of 2008 totaled $17.5 million. That was down 0.7 percent from $17.7 million in the fourth quarter of 2007. Douglas County’s decline was slightly more than the 0.4 percent decline posted statewide. But Douglas County’s performance was better than Johnson, Wyandotte, Shawnee, and Sedgwick counties.

• Tourism spending continues to do well in Lawrence. Even adjusted for inflation, 2008 was the best year this decade for transient guest tax collections. The city collected about $940,000 in guest taxes. The report also noted that the city’s hotel occupancy rate has held steady — at about 57 percent — despite new hotels being built in western Wyandotte County.

Comments

Jan Brocker 6 years, 1 month ago

No surprises here. Rent is outrageous and the climate downtown is not very attractive to a lot of people and especially families with children. Most landlords will not lower their prices and the city doesn't want to clean up downtown. Pick your battle and do your research before you vote tomorrow.

skinny 6 years, 1 month ago

You have the City of Lawrence Commissioners to thank for all this. It’s pretty bad if you want to go out to eat or go out for entertainment you have to drive to Topeka or Kansas City. That and the City Commissioners great idea to save the empty T Buses has caused a lot of business to leave the city or to be bought over the internet a lot cheaper, no sales tax, and free shipping.

Way to go Lawrence City Commissioners!

Chris Ogle 6 years, 1 month ago

As Price Banks says "Lawrence is special".....Okay, now what Mr. Banks?

Danimal 6 years, 1 month ago

Yeah, I'll agree that downtown is ghost of its former self. That could have a lot to do with the parking nightmare downtown. A lot of businesses have left because it just isn't worth being down there. Not only retailers, but offices as well. Either downtown will have to have more bars, or rent will have to fall along with property values. Bars are the only reason I still go downtown. I could see a lot of downtown just becoming bars and it being a fairly scummy place.

Godot 6 years, 1 month ago

This is very sad. Lawrence government needs to take action to reverse the trend started by the no-growthers of the early 21 century, or, in the not-too-distant future, Lawrence will become Topeka's second cousin.

somebodynew 6 years, 1 month ago

Well danimal, I think that is just what we need -MORE bars downtown. Especially since the State has said they aren't going to release our portion of the liquor tax to us this year. Yeah, that is going to bring more money in. Or maybe just more trouble and shootings. One or the other.

cowboy 6 years, 1 month ago

From my little perch , I hate being panhandled by a bunch of arrogant frigging bums every 75 feet. I choose not to go downtown for entertainment. I used to go down there alot and take guests frequently.

The restaurants with a few exceptions are really poor and the service usually even worse. If I'm trying to have a good meal and paying well for it I expect the waitstaff not be in wrinkled shirts with filthy tennis shoes on . Additionally just where can you have a reasonably quiet meal.

Parking is really not a problem most times.

The city needs to understand that corporate semi fast food , bums , and overpriced Gap crap does not make an attractive downtown.

Godot 6 years, 1 month ago

ocean, those so-called rich landowners in Topeka are taking on water and sinking fast. I bought a house in Topeka in the early 70's, took out a loan for $21000. Sold it for a loss a couple of years later. That very house is valued at around $30,000, nearly 40 years later.

The term "topeka land baron" is an oxymoron.

Godot 6 years, 1 month ago

The progressives of Lawrence have set this city down the path toward Topeka-dom by squelching growth of private business in favor of growth of government and government-subsidized not-for-profit organizations.

Raider 6 years, 1 month ago

Downtown Lawrence needs a better retail mix. Weavers is for old men and the Gap is for kids. There are no decent places for men ages 30-50 to buy clothes and shoes in this town. Then, don't forget the overabundance of glorified kitch shops passing as specialty retail. You can find the same thing in many places downtown. I agree with the restaurants as well. They're not like they used to be, and service has gotten pretty bad. Business owners downtown need to wake up and realize that if they don't change and give us what we need then downtown is going to dry up.

Practicality 6 years, 1 month ago

I hate to say this, but downtown has turned into nothing more than a hang out. Except on game days, and maybe the sidewalk sale, the majority of people are just basically hanging out down there, besides the bars at night.

Most people who spend money on a regular basis have gone elsewhere. Downtown is not family freindly. It is not shopper friendly. Starting a few years ago, people started going elsewhere for their shopping needs. The real regular shoppers, that downtown needs, have long ago figured out that downtown shops are overpriced. They were tired of getting harrassed by homeless people begging for money and making them feel uncomfortable. All the little, trendy shops that make up downtown have lost their customer base. These shoppers have all gone to the Plaza, or Legends, or Oak Park Mall. And when they need to get the basics, they just head to south Lawrence. Better prices and bargains, no bums, and less weirdos. Having better restaurants would help, most of the ones downtown are really not any good, with, I agree, weirdo waitstaff to boot.

Downtown better clean up its act or else just turn it into an entertainment district, which is really what it has become. It needs a lot more upper middle class clientele to survive as is, or a total make over. The days of just having a business downtown and raking in the dough are over. Because, you have driven off the people with the dough by making them feel uncomfortable with the people just hanging around and by offering them over priced goods as well as sub par restaurants. Until they figure that out, my money goes out of town or to south Lawrence.

BigPrune 6 years, 1 month ago

Try to rent a space downtown or anywhere in town and the City of Lawrence has restricted Lawrence right out of the market. That's why there are vacancies. Nobody wants to screw with City Hall's restrictive anti-business policies that wastes thousands of dollars and months and months of dead time. These restrictions have been in place since the Progressive Commission enacted the development code in 2005.

One day the City will wake up and wonder what hell went wrong. THEY went wrong!

CLARKKENT 6 years, 1 month ago

ALL YOU FOLKS THAT VOTED TO RAISETHE SALES TAX THAT STARTED LAST WEEK, CAN SUPPORT DOWNTOWN. SEVERAL OF US WILL DO OUR SHOPPING OUT OF TOWN.

NOW YOU HAVE A CHANCE TO UNDO SOME OF THE WRONG. NO VOTE FOR AMYX.

Sharon Aikins 6 years, 1 month ago

I don't have the answers. I don't even know who to blame. But I haven't been in downtown Lawrence for years. I even quit going to the library. Face it, downtown is dirty, populated by people who make most of us feel uncomfortable, full of overpriced shops and stores, the buildings are difficult for most with disabilities. It's hot, it's cold, the trees were so overgrown the last time I was there that unless you knew where a particular shop was, you had to get out and hoof it to find anything. You couldn't pay me enough to go down there after dark. I haven't even mentioned parking yet. Nope, me and my walker, we're going to someplace that is accessible, climate controlled, clean and affordable. Several years ago the city worked hard to maintain at the cost to themselves, the uniqueness of the "Beautiful Downtown Lawrence." Instead they shot themselves and those who now can't afford to have a business down there anyway in the foot. No way am I going to fight the traffic and burn up a tank of gas finding a parking place to shop or eat somewhere that I have to witness the suicide of what was once a great place to visit. We need to realize in this city that time marches on, this ain't the 60's, 70's and 80's. All those who bitch about growth here need to stop and wonder how many of them came here because they found it a good place to live and others have too. The growth's not going to stop but downtown Lawrence is like time frozen and now the only way it can survive at all is the bars which make it even less desirable to the average citizen. Even the quirly, overpriced restaurants down there could be in trouble.

lawrencechick 6 years, 1 month ago

There is very little to attract families downtown and they are the ones who will spend money. Hardly any childrens clothing stores (that aren't insanely overpriced) ...one toy store...homeless loitering all over the place. It's a good thing the people who fought the South Iowa stores didn't win or Lawrence would be completely broke.

drake 6 years, 1 month ago

The only way to get sales tax revenues up in the downtown area is to increase sales tax rates for that area. That way the city will collect more and downtown will pull it's own weight. Raising taxes is the only answer.

Practicality 6 years, 1 month ago

So Machiavelli,

You are not going downtown because people were complaining about the homeless people. Others are not going downtown because of the homeless people. Either way you look at it, that just leaves the homeless and a bunch of teenagers and "thirsty" bar patrons late at night. Good luck having a commercial business survive in that scenerio, especially with the high rent values expected to be met.

Downtown used to be the heart of Lawrence. It is slowly turning into the armpit. Sad.

Linda Aikins 6 years, 1 month ago

I must respectfully disagree. I took an afternoon off last week and just walked around downtown. I had the best time looking at (and buying) the unique items downtown offers. If you all blackball it, then I believe you are shooting yourselves in the foot!

There are lots of good hard-working LOCAL people who own businesses there and I can't imagine how much it hurts them to see their potential income going out of town because of perceived inconvenience. I personally think it's more difficult to drive 30-60 miles to shop than it is to get it in Lawrence. Doesn't cost of gas figure in somewhere? And time? And being off the highways?

I hope they can continue. Yes, it would be great to get rid of the beggars. I just smile and walk on and usually only have one of them. But it doesn't keep me away.

jafs 6 years, 1 month ago

Hmm,

My wife and I go downtown regularly to eat out - here's a list of our favorite restaurants:

Zen Zero La Parilla Encore Rudy's Aladdin The Mad Greek India Palace Teller's

Also isn't there still a little grocery store where the Casbah used to be?

Plenty of coffee shops as well.

I agree that the growth in Lawrence has affected it negatively in some ways, but downtown still seems worth going to, at least for eating out and having coffee.

The problem of student waitstaff is real, but unavoidable in a college town, I would think.

Also, Kief's downtown has a large selection of clearance CD's - $1 each.

Parking is a little more difficult, but I can still usually find a spot not too far away.

Just my two cents.

bastet 6 years, 1 month ago

Many of these comments about downtown problems are true, but there lots of good shops with people who are willing to HELP customers. The Raven, The Bayleaf, Goldmakers, etc all have intelligent, skilled staff who like to help people. That's not something you'll find in the basic box store. The people who own businesses downtown are your neighbors and friends, all of whom are trying like you to make a living. Yes, parking can be a problem; yes, sometimes one finds a grumpy or surly waiter or store clerk, but downtown is a vital part of our community. You don't have to choose either the big box stores or downtown. Live in the entire city of Lawrence; spread your money around. Realize the pleasure of walking up and down Mass Street in the spring and summer and looking into an unusual shop once in a while.

I do hope more everyday goods shops go in downtown, and some kind of grocery store would be wonderful! If we can show a desire for such things by our patronage, perhaps we can create change. Don't let downtown deteriorate into a bar and restaurant destination. It's too good for that.

Bob031800 6 years, 1 month ago

I think there are some key things that have happened over the last 10 years. One the development of Iowa as a retail hub has pulled local traffic away, in much the same way as Wanamaker in Topeka sucked what was left of Topeka's downtown business district with it. Topeka has been fighting a tough battle to redevelop their downtown, Lawrence isn't there yet, but it has to be careful.

Also, you cannot underestimate the impact of Legends, and the explosive growth of the Wanamaker retail corridor in Topeka. The Legends now attracts those customers who used to want to get out and walk around in a quaint outdoor shopping venue. Wanamaker now draws huge numbers of people from smaller communities like Emporia, Osage, Holton, it's tripled it's size since 2001. Those customers don't make it in to Lawrence anymore. Plus high gas didn't help matter either.

Mass street still has a lot to offer though and I believe it will continue to be more than just a bar scene.

Practicality 6 years, 1 month ago

I am one of the people who have made disparaging comments on here concerning downtown.

I do not want it to seem as though everything about downtown is horrible. I know that many people depend on downtown for their livelihood, and that both business owners and employees are also hard working vital members to our society.

I have stated my reasons why I rarely go downtown anymore, and there are more than just one. I wish that wasn’t the case. Every single time I get that old nostalgic feeling to return back to downtown, I soon regret it after about an hour. People do not go to Legends, or the Plaza, or Wannamaker or south Lawrence for the convenience. They go because it is the better option. That is a monumental statement concerning the fact that it is inconvenient for many living in Lawrence to go to out of town shopping districts. And, if the people of Lawrence are going out of town to do their shopping, what makes people think that the out of town clientele is going to show up? The downtown district is far from over nor irredeemable, there are plenty of decent restaurants and businesses. But, in comparison to what these other districts offer, the quaintness of it soon wears away after one or two visits and the shopper is left with the reality. Downtown is going to have to cater to the clientele it wants to attract. People of Lawrence can not have it both ways. Thinking that everyone is just going to be tolerant and put up with things they do not want to or have to just so they can shop downtown is ridiculous and arrogant. Offer something better than these other districts and make people feel comfortable being there. You can either worry about not offending people and go out of business eventually, or offend some people and try to bring the money back. My two cents.

OhHai 6 years, 1 month ago

Yeah, it's pretty hard to make money when they roll up the streets at 6 p.m. The hours that retailers have in Lawrence are the worst I have ever seen. They need to stay open later so that the folks having dinner can shop. Nothing loosens up a wallet like a little alcohol. I have never understood why the shops downtown close so early. You really can't expect to have a thriving business when you're only open from 10 a.m. - 6 p.m.

Flap Doodle 6 years, 1 month ago

When I'm looking for advice on running a business in Lawrence, girlfriend is the first person I look to {not}.

Practicality 6 years, 1 month ago

Machiavelli_mania (Anonymous) says…

"Yes, Practicality, and I bet you go to church every Sunday too. So much for loving those who are difficult to love."

No, I do not go to church every Sunday. I go to Church as about as often as I go to downtown Lawrence. Which is hardly ever. I fail to see the point you are trying to make here. If downtown can thrive doing business the way that it has been doing business in recent years, than good for it. It does not appear to me that is the case though. I could be wrong.

If you are so openminded that the atmosphere downtown doesn't bother you, well good for you as well. Now, just go find a few thousand more people who are just like you to spend a few hundred dollars a week, on a weekly basis, downtown in something other than bars, and it will be fine the way it is. Otherwise, I fail to see the point in this statement concerning downtown business.

"I will try and love the greedy if you will try and love the homeless."

Love doesn't pay the bills I'm afraid.

Practicality 6 years, 1 month ago

OhHai or Marion,

Do you think the business hours of the shops are designed that way to try and keep the families and the drunks from running into eachother?

Whether that is the case or not, I agree the hours thing is atrocious. Most people are working at that time and even if the hours were changed, most moms are not going to want to drag their kids through a crowd of drunks, rowdy teenagers, and homeless people just to buy them a pair of Nikes for baseball practice. Crazy. The inmates are running the Looney Bin I'm afraid.

Bob031800 6 years, 1 month ago

Hey I haven't met anyone that doesn't like shopping at Legends, taking in a T-Bones game, or walking around Nebraska furniture mart. That retail district has become the number 1 tourist attraction in KS. Doesn't say much for KS, but hey. And once Schlitterbahn opens, that district is only going to become more of a draw. Lawrence loses becauses it rests too much on past glory, and is not reacting to the changing landscape in this area. But hey, I still enjoy going to Mass street and eating at Buffalo Bobs, but I admit I don't really ever shop there. But I have five kids, if I am going to take the brew out I'd rather hit WestRidge Mall, the Legends, or Oak Park mall. That way you don't have to make as many stops.

OhHai 6 years, 1 month ago

Everyone thinks that the Legends are bad, but when I go shopping I have to go to Overland Park because a) I can't afford the shops downtown and b) I don't necessarily want to by the same 5 things at Old Navy that everyone else in town has. There is NO selection even from the big box stores. So while I do love Downtown, I don't see why more stores are so bad. They pay taxes, employ people, etc. And honestly, locals aren't the ones shopping downtown. I only go down there to eat. And if something isn't done it's going to turn into an entertainment district.

Hoots 6 years, 1 month ago

I like downtown. It's a great place to spend time. If you think the panhandling is bad here try San Francisco. I couldn't wait to get out of that place and I never care to go back. I do agree panhandling is my one irritation. I've never had much trouble parking and it beats going to the cookie cutter malls.

Chris Ogle 6 years, 1 month ago

Downtown is fun place to go out and eat, and/or go drinking..... for me, that's about it. Oh, almost forgot, the hardware store is cool..

fletch 6 years, 1 month ago

"Nope, me and my walker, we're going to someplace that is accessible, climate controlled, clean and affordable"

Have fun in Leawood.

Richard Heckler 6 years, 1 month ago

My bet is the greater majority of small business all over Lawrence is not doing well because there is too much retail for a small town.

The west side is building even more retail which is unfriendly to business.

Blue Heron is the only decent furniture store in town.

Bars,bars,bars and more bars are not attractive to business because it will appear as not a great place to raise a family any longer.

It does seem odd that many cities are putting a ton of effort to restore downtowns with residential to support retailers and Lawrence continues to move backwards.

Plenty vacancies were abound in residential,retail and light industrial before the major economic downturn.

George_Braziller 6 years, 1 month ago

How about a comparison of downtown in 2001 v. 2008? That would be much different than comparing downtown to the entire city during the same period.


"According to the new report, Downtown Lawrence generated about 8 percent of the city’s total sales tax collections in 2001. In 2008, that figure had fallen to about 6.5 percent."

Jennifer Dropkin 6 years ago

The poor state of Downtown is due to:

  1. Retail development elsewhere in the city (as well as in other towns): you can't buy moderately priced clothes or furniture Downtown.

  2. Overpricing of rental property by landlords, many of whom require renters to pay their property taxes on top of rent.

  3. Overpriced housing that can't find tenants: the Hobbs-Taylor condos, for example, which also can't find business tenants.

  4. Overmarketing to students to get their parents' money or their student loan money: bars, bars, more bars, t-shirt shops, and skateboard stores.

  5. Poor-quality restaurants, many serving the ghosts of ethnic food, and proud of it, the rest aiming for the lowest-common denominator of undemanding student tastes, and nearly all too noisy for grownups and with low-quality service to boot. The grownups with grownup salaries and a wish to dine on real food with decent conversation will go elsewhere. As for the quality of service, even student-age workers can be trained to provide decent service; the fault here is with the business owners.

  6. Desperation renting to fortune tellers.

A town needs a central location, and Downtown is it for Lawrence, which is why some of the homeless hang out there (and they will be there, even if the homeless shelters are closed or moved elsewhere). This is also why the scuzzy rainbow children float through Downtown twice a year, and why visitors go there on game day, and why high-schoolers and college-age students hang out there.

On occasion, there are tax-paying grownups who hang out there, too, but they are more likely to look for moderate retail, good restaurants, and a comfortable environment elsewhere. They are not finding it in Downtown Lawrence.

headdoctor 6 years ago

While it was buzz words a few years back, I never bought the story that downtown was the central business district. At the same time some on here seem to be missing something. There are always a certain amount of vacant buildings downtown. People are setting on their money more than normal because of the over all economy. It must not be to bad though. Recently at least two of the vacant buildings have been rented and a third one (Arensberg shoes) is contract pending. That doesn't sound quite like downtown is drying up.

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