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Archive for Tuesday, December 8, 2009

Bioscience building on city’s agenda

December 8, 2009

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Lawrence city commissioners tonight are expected to approve the purchase of a west Lawrence laboratory building as part of a plan to keep and attract promising bioscience companies.

Commissioners are being asked to give staff members the authority to prepare documents to issue $2.9 million in bonds to purchase and renovate the former Oread Labs building near Bob Billings Parkway and Wakarusa Drive.

A portion of the building would be leased to CritiTech, a Lawrence-based drug development company that needs space to expand. The remainder of the building would be used to attract other bioscience companies to the city.

The plan calls for lease payments to pay for the bulk of the $2.9 million in project costs. An agreement up for approval today contemplates that the city and county would be equally responsible to cover any shortfalls.

Also on the commission’s agenda is a discussion about what the city should adopt as its legislative priorities for state lawmakers in 2010.

Commissioners meet at 6:35 p.m. today at City Hall, Sixth and Massachusetts streets.

Comments

Richard Heckler 5 years, 1 month ago

Bailing out a bad private investment is reckless spending.

Richard Heckler 5 years, 1 month ago

Paying too much for any real estate is reckless use of tax dollars.

Richard Heckler 5 years, 1 month ago

One day the city is broke the next day we're being told the city must take risks WITH OUR TAX DOLLARS bailing out private investors. This is wreckanomics!

Richard Heckler 5 years, 1 month ago

If the city thinks they have millions upon millions of taxpayer dollars to blow on Oread Lab real estate and the contaminated fertilizer property why can't the city come up with $150,000 to make the city safer for OUR number one economic generator aka students?

Plus create a “8 ft pedestrian/cyclist exercise pathway” on both Tennessee and Kentucky. From 7th street to 19th street on the east side of each street. The right of way is there.

Students create mucho jobs and mucho tax dollars for Lawrence,Kansas which makes it OKAY to invest in their safety.

Face it…. if KU students decided to participate in the voting process they could control Lawrence,Kansas and why not?

Richard Heckler 5 years, 1 month ago

Why Do You Think Economic Growth Is Lagging?

http://www2.ljworld.com/polls/2007/sep/why_do_you_think_lawrence_growth_lagging/

==================================== TO: David Corliss

David and Roger ‐

I would like to explore a different form of financing for the purchase and sale of 4950 Research Parkway.

*Wrong Form of Financing

Did you examine an alternative where the building would be purchased by the Lawrence Douglas County Bioscience Authority (LDCBA) using revenue bonds?

The current proposal calls for the taxpayers to absorb all of the risk on this building as the purchase will be financed by general revenue bonds. These bonds would be backed by city taxes. If revenue bonds could be used the revenue from the building would be the backing.

The LDCBA projects 89% occupancy; history suggests that this is wildly optimistic.

Revenue bonds would spare the taxpayers from the risk of this project and place the LDCBA under some pressure to perform on its promises, both of which seem desirable.

Surely there is some mechanism that would finance this deal without passing all of the risk to the taxpayers.

*Price too High Why are we overpaying for this building?

The City is being asked by the LDCBA to buy the building at 4950 Research Parkway for $2.3 million and invest another $600,000 in it.

The tax assessor values the building at $1.5 million. At an 8% capitalization rate, this corresponds to 55% occupancy.

Even if it can attain the 89% occupancy the LDCBA projects, its market value at an 8% capitalization rate (and I could easily argue for a higher rate) is about $1.75 million.

*We seem to be overpaying by $550,000 to $800,000.

Kirk McClure Professor Department of Urban Planning University of Kansas 1465 Jayhawk Blvd., 317 Marvin Hall Lawrence, Kansas 66045‐7614

Education Ph. D., City Planning, University of California, Berkeley, Department of City and Regional Planning, 1985. Concentrations in Housing Economics and Public Finance.

Master in City Planning, Massachusetts Institute of Technology, Department of Urban Studies and Planning, 1978. Specialization in Housing Policy Analysis.

Bachelor of Arts, University of Kansas, College of Liberal Arts and Sciences, 1974. Special Major in Urban Studies.

Bachelor of Architecture, Graduated With Distinction University of Kansas, School of Architecture and Urban Design, 1973.

Richard Heckler 5 years, 1 month ago

Bump for a New Tax Dollar Citizen Group to challenge and offer alternative approaches.

In essence to begin talks of new checks and balances.

nytemayr 5 years, 1 month ago

Who gets the $2.9 million in their pocket? I'd rather see the city buying the property at auction with other bidders, at least the purchase would have some relationship to a CURRENT market value! I'll bet the purchase price is based on the 2007 property tax basis.

Don Zimmer 5 years, 1 month ago

To those who said my comments below discouraged lawrence from atracting high paying jobs in research myopinion is not to waste valuable funds to pay for overpriced real estate, instead use the funds for the jobs themelves.

The less you pay for the real estate the more you have for the business.

doesnotplaywellwithothers (Anonymous) says…

  1. I expected the new commissioners would be better stewards of our taxes, especially in today’s economic environment. Some opportunities, which this does not appear to be one, you just have to pass on until the economy improves.
  2. In this case there are too many conflicts of interest in the parties. At least do what any practical person does and negotiate the price to reflect current values and alternatives. Commercial values are down 30% or more, ask any buyer, banker, or appraiser. Basing values on future expectations is what got us into this mess in the first place. The owners group are in the real estate business and if they cannot find tenants what makes the City/County think they can.
  3. The threat that they will move the business to another community appears shallow. If they move the business then the property owners (who are also the tenants) will no longer have any tenants for their building and then what is the empty building worth.
  4. A tenant expects the unit to be habitable. The air conditioning works and the improvements to meet tenants needs are priced into the value of the building. In other words if it is worth $1,000,000 based on current rents (which meets the tenant's needs) and needs $500,000 in deferred maintenance to meet tenant's needs it is not worth $1,500,000 just the $1,000,000. To overpay for a building from an owner (who is also the tenant) bring it up to date and then lease it back to them at below market rent should set off alarms. if you buy a house with a roof that needs to be replaced you do not pay as if the roof is new and then pay additional money to have it replaced

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