Archive for Wednesday, August 25, 2010

Lawrence holds off on new special taxing district

The Lawrence city commission voted to defer a decision on a new tax district plan for some area businesses. Commissioners want to know more about the future of a current space before moving forward.

August 25, 2010


City commissioners want to hear more about a potential expansion of the Hobby Lobby store at 23rd and Ousdahl before they sign off on a special taxing district for several stores near the intersection.

Commissioners Tuesday evening declined to take any action on a request to allow four business sites near the intersection to begin charging a special 1 percent sales tax to fund about $1.5 million worth of public and private improvements.

“I think this is an opportunity to improve an eyesore in our community,” said Commissioner Mike Dever. “But we need a lot more information about what will happen in a large portion of this district.”

Developers of the project are requesting that a special 1 percent tax be levied at a Jimmy John’s sandwich shop, a Yokohama sushi restaurant and the former Kwik Shop, which will be torn down and replaced with a new retail building. Specific plans to upgrade those sites have been filed.

But the development group also wants the special tax to apply for the Hobby Lobby store at the southwest corner of 23rd and Ousdahl. No plans have been filed with the city about how that property would change.

But when asked by commissioners Tuesday, the lead developer of the group confirmed Hobby Lobby was considering possible expansion plans for the site. Jim Harpool, director of development with Mission-based MD Management, said plans haven’t been filed because no decision has been made yet to move ahead with an expansion of the store.

Once plans do get filed showing the types of improvements — perhaps including stormwater projects to help reduce flooding at the intersection — there may be three commissioners ready to sign off on allowing the special Community Improvement District tax.

Dever, along with Commissioners Rob Chestnut and Lance Johnson, all expressed some openness to the special tax, which allows developers to fund both public and private improvements.

“We have 50- or 60-year-old buildings that are just flat-out tired,” Johnson said. “We have some tired commercial on 23rd Street. The question is when do you incentivize development? If you don’t do this now, when does it happen?”

Commissioners, though, also heard from some members of the public who argued that private development is happening along 23rd Street without the special taxing districts, pointing to a new McDonald’s, a new CVS drug store, and a new O’Reilly Auto Parts store.

“Part of the problem with this is that it is a very sneaky tax,” said Bob Schumm, a downtown restaurant owner. “It hits the consumer after they’ve already made their purchases.”

Commissioners have discussed the idea of requiring businesses that charge any special tax to post a sign notifying the consumers of the tax. The development group on the 23rd and Ousdahl project said it is willing to post the signs, but commissioners made no final decisions on that issue Tuesday.


Keith 7 years, 7 months ago

“We have 50- or 60-year-old buildings that are just flat-out tired,” Johnson said. “We have some tired commercial on 23rd Street. The question is when do you incentivize development? If you don’t do this now, when does it happen?”

If the profit to be made from the sales and services the business offers isn't enough of an incentive, then you are propping up a losing proposition.

conservative 7 years, 7 months ago

Where do we stand on the proposal to make the stores who have the special tax identify it on the front doors? Sorry but any business utilizing this tax will be getting 0 dollars from me.

cowboy 7 years, 7 months ago

You incentive projects that benefit the citizens of the community , not corporate devo coffers and land value for corporate entities.

Use this wisely and it has merit , and the community would support it - small business incubator district - creation of new jobs paying living wages - blighted area redevelopment

NOT subsidizing existing retail businesses

seriouscat 7 years, 7 months ago

NO NO NO!! This type of 'special tax' is so utterly dishonest. The fact that Dever, Chestnut and Johnson behave as though 'special taxes' like this are a good option for development belies the entitlement mentality that they and coporate America has been nurturing for the last couple of decades.

Time to cut the friggin apron strings boys!

Orwell 7 years, 7 months ago

Bad idea, handled badly.

Giving away the city's taxing authority to meet specific businesses' ordinary expenses is a perversion of the free market; it's just bad public policy, regardless of which specific private business expenses would be met through the tax.

If there's a general public benefit to be achieved, the "incentive" should come from general tax revenues. If it's only a private business cost to be met, it should come from higher prices charged by the merchants. The end cost to customers would be the same, and honest pricing to meet private costs (without an artificial "tax" component) assures consumer choice based on accurate information.

Any business, anywhere in town, can claim legitimately it would be strengthened if it could artificially suppress its nominal "prices" and hide higher revenues in the guise of a tax. The logical extension of this twisted "incentive" is to allow any business to charge – and keep – any "sales tax" it chooses, so it can artificially suppress its stated prices for goods or services.

Worse yet, the commission now wants to the applicants to incur more planning expenses before further consideration of this ill-conceived giveaway.

The right thing to do would be to say "NO" now.

kef104 7 years, 7 months ago

I will never shop at any establishment where the developers are charging customers an extra tax for their improvements. Never. The city risks losing even more tax dollars to those who will choose to shop outside Lawrence. If you read between the lines, Hobby Lobby is only considering an expansion if they can be convinced it will be done for free. If developers need a break, let it be for those who only build affordable stand alone housing, say under 130K. That would do more to stimulate spending over time as more money will be available to be spent on goods and services.

dinoman 7 years, 7 months ago

yet another tax just what this booming economy needs.... and to think that the ones who think that this tax is good are the ones that most likly don't even shop in those areas.. what is really needed is enforcement in the current zones and codes faced with the absolute need to up grade to meet the current codes most of the run down bussiness would either improve their bussiness or close either way it opens the option for the city to only allow new bussiness into that area... not to mention the housing around the area especially towards the south being low income apts does not instigate an expensive new store unless it like a mc donalds... what is really needed is new or rejuvinated housing so that new money in the area would provide a base of income for the bussines in the area to thrive ... oh and by the way wasn't there something said about a new storm drain to be put in????? i'm already taxed for that every day why why another tax.... i like almost every other citizen in this great city works untill tuesday for every one elses benifit... the first day that i get money to take home is wednesday wake up america no new taxes use what is there better... quit paying underqualified city employes to sit back and come up with new ways to punish the common citizen... again wake up

sherbert 7 years, 6 months ago

I can't agree more. Why should certain developers get a charge a 'tax' to pay for their costs? Regular business folks don't get to do that. Let them raise their in-store prices just like any other business would have to do to meet costs. That's the free-market we're living in, right? Everyone should be competing on an even level, no bailouts!

Kontum1972 7 years, 6 months ago

more taxes plz....plz...more...more..more .....MORE!

Richard Heckler 7 years, 6 months ago

The undersigned ("Petitioners"), (1) being the owners of record owning more than fifty-five percent (55%) by assessed value of the land area within the boundaries of the hereinafter described proposed community improvement district (the "District"), and (2) comprising more than fifty-five percent (55%) by land area of all owners of real property within the boundaries of the District, do hereby petition and request that the City Council create such District to fund all or part of the costs of services and improvements described herein and provided and made within the District under the authority of the Community Improvement District Act, K.S.A. 2009 Supp. 12-6a26 et seq. (the "Act").

  1. Boundaries and Legal Description The legal description of the District is attached hereto as Exhibit A. A map of the boundaries of the District is attached hereto as Exhibit B, confirming that the District is contiguous. The District is located entirely within corporate boundaries of the City. A summary of the parcel(s) within the District owned by each Petitioner is attached hereto as Exhibit C.

  2. Name of District The name of the District is Ousdahl 23 Community Improvement District.

  3. Signatures May Not Be Withdrawn Notice has been provided to all Petition signers that their signatures may not be withdrawn later than seven (7) days after the filing of this Petition with the City Clerk.

  4. Nature of the Proposed Project The general nature of the proposed project is to provide reconstruction and improvements to the properties located within the District. Proposed improvements include installation of new curbing, landscaping and lighting, construction of new sidewalks and installation of handicap parking for ADA accessibility, replacement of asphalt parking lots, replacement of roofs, paint and exterior building repairs, and replacement or repair of mechanical systems for buildings within the District.

  5. Estimated Cost of the Proposed Project Petitioner estimates the cost of the improvements to the District will total approximately $1,508,537.00. This estimate includes the cost of repairs in addition to as built surveys, environmental reports, assessment studies and blight determination, appraisals, landscape architecture, construction supervision and staking, soil testing, fees and permits, attorney fees, taxes and insurance, brokerage and development fees, and ongoing maintenance.

  6. Proposed Method of Financing the Project - Sales Tax The proposed District projects will be financed on a pay-as-you-go basis payable by private financing secured by Developer and reimbursed from revenues received from the imposition of a one percent (1%) community improvement district sales tax on the selling of tangible personal property retail or rendering or furnishing of taxable services pursuant to the provisions of the Kansas retailer's sales tax act within the proposed Ousdahl 23 Community Improvement District.

Richard Heckler 7 years, 6 months ago

What we have in this petition is a never ending sales tax. Once the improvements are accomplished the sales tax rolls on into large profits.

Who collects this tax? Is the taxpayer funding the tax dollar management?

None will ever reach local or state cookie jars.

Much of Legends appears to be a Community Improvement District Sales Tax participant and Baur Farms may be as well.

Richard Heckler 7 years, 6 months ago

David Cay Johnston then boggled the crowd with a blunt assertion: "We pay billions of dollars in taxes that never get to the government." Much of the sales tax we pay at big box stores and shopping centers is diverted to the large companies that own the stores. It's just one of the many swindles these chains have learned to perpetrate against city and county governments. This is so effective that the Cabela family, which owns a chain of big-box sporting goods stores, receives 137% of its profits from taxpayer subsidies. If they couldn't work this scam, they wouldn't be in business at all.

The heart of the wealth transfer is tax increment financing (TIF). Store owners come to town leaders and offer to build a new store that, they promise, will "create jobs." In exchange, the city gives them the land, builds the store to their specifications, and finances it all with tax-free municipal bonds (which are usually held by associates of the store owners). To cap it all, the store keeps the sales tax generated in the store to pay off the bond holders. If the store is built on government land, it's also exempt from paying any property taxes.

Why do city governments take such a blatantly bad deal? Many of them are struggling, and believe that a new Wal-Mart will bring in shoppers from all over—shoppers who will stick around and shop in their town. It never works out that way. Under stiff competition the small shops go out of business, taking the town's tax base with them. Schools, parks, recreation programs, and libraries are starved. Almost always, these city councils would be far better served putting the money in upgrades to local Main Street businesses, rather than financing the competitor that will kill them.

Johnston also noted that as a result, the nation is losing mom-and-pop businesses that are often more efficient in real terms than the big box stores, which carry tremendous overhead in management and distribution. He suggested that audience members do an experiment: first, eat at a chain restaurant like TGIF—and then go the next night to a local family-owned place. Not only will you spend half as much in the family place—the people working there are probably making more money. That's what real efficiency looks like.

Other scams Johnston noted:

Richard Heckler 7 years, 6 months ago





Commenting has been disabled for this item.