News and notes from around town:
• A struggling Topeka development deal is now being pointed at by members of the public who question whether Lawrence ought to offer incentives for a multi-story building project at Ninth and New Hampshire. An Oct. 28 Topeka Capital-Journal article is being circulated in several e-mail circles in Lawrence. The article details how a development group led by Lawrence businessman Doug Compton has about $130,000 in unpaid property taxes to Shawnee County. The taxes are for the group’s College Hill business district, which is a mix of retail and residential northeast of Washburn University. The issue has created concern at Topeka City Hall, in part, because Topeka issued about $5 million in tax increment financing bonds to pay for infrastructure at the site. The city was counting on the new tax revenues to pay for the bonds.
The issue now has made its way to Lawrence because Compton is leading a separate development group that has begun work on a seven-story building at Ninth and New Hampshire that will house apartments, offices and retail. The Lawrence group also is asking for incentives, including the ability to reserve about 65 parking spaces in the adjacent public parking garage, and is seeking about $280,000 in city funding to pay for several upgrades to public infrastructure.
But unlike in Topeka, the group is not asking Lawrence City Hall to issue any new TIF bonds for the project. The city did a multi-million dollar bond issue in 2000 to pay for the city parking garage and other infrastructure improvements. Just like in Topeka, Lawrence leaders in 2000 had hoped new tax revenues would be able to pay off a significant portion of the bonds. But development did not occur at the rate city leaders had expected, and as a result the city has paid the vast majority of the $780,000 annual bond payment from general city revenues. Lawrence city commissioners previously have said they are excited about the Ninth and New Hampshire project, in part, because the new tax revenues will help make that bond payment, which runs through 2020.
It is not clear how commissioners will react to this latest wrinkle. Bill Fleming, a Lawrence attorney who is a spokesman for the Ninth and New Hampshire project, said the Topeka issue should have no bearing on the Lawrence project. Fleming, who is not part of the Topeka project, said the Lawrence development is on firm financial footing because it already has retail and office tenants lined up for the project.
But Fleming argues that even in a worst-case scenario, the city has no worries about not receiving its tax money. That’s because state law gives the county broad authority to collect unpaid property taxes by auctioning off the property. Even that scenario is unlikely because any lender for the project likely would step in and pay the taxes before a tax auction could take place. As Topeka is finding out, though, such a process can take time to unfold.
“The risk that the city doesn’t get paid its real estate taxes is non-existent in this situation,” Fleming said. “Real estate taxes trump mortgages and everything else. The city is first in line when it comes to getting paid.”
• It is still unclear when city commissioners may consider the Ninth and New Hampshire project’s request for incentives. City Manager David Corliss said he doesn’t yet have a date set to bring a report back to commissioners.
Part of the issue being studied is an unusual one regarding City Commission process. As we previously reported, both Commissioners Mike Dever and Lance Johnson abstained from voting when commissioners formally received the request. Both commissioners had done some work on the development as part of their private businesses. The city’s legal staff currently is trying to determine how the commission will proceed if Dever and Johnson both continue to abstain from future votes on the matter.
There are several issues being studied, including:
- Are Dever and Johnson legally required to abstain from future votes or are they simply choosing to abstain? If they are legally barred from voting on the issue, then there’s a question of whether the City Commission has enough members to form a quorum. The City Commission’s quorum is four members. The city is studying whether two members who abstain can still be counted as part of the quorum. If the City Commission doesn’t have a quorum on an issue, it can’t vote on a matter.
- If the City Commission does have a quorum, what happens if the remaining city commissioners split on the issue 2-1? Town Talk previously reported that the issue would need three votes to pass, since that’s the minimum majority of the five-member commission. That’s true in the case of any ordinance before the commission. But now the city’s legal staff is studying whether that would be the case if the incentives issue were presented to the commission in some other form, such as a contract.
• Speaking of legal matters, five Lawrence law firms recently have been named in U.S. News and World Report’s new ranking of law firms. Four Lawrence firms were included in the top tier of Kansas City, Kan. area law firms for various practice specialties. They are: Associates in Dispute Resolution for worker’s compensation law; Barber Emerson for real estate and trust law; Martin B. Dickinson Jr. for tax and trust law; and Stevens & Brand for bankruptcy creditor debtor rights/insolvency and reorganization, corporate, education, elder, family, real estate, and trust and estate law. Skepnek Fagan Meyer & Davis was named a second tier firm for personal injury law.
UPDATE: An alert reader has pointed out one other area law firm with strong Lawrence ties that has made the U.S. News and World Report rankings. The Stegall Law Firm, based in Perry, was ranked as a top tier firm in the Topeka area for administrative and regulatory law and energy law.