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Archive for Monday, July 19, 2010

Lawrence Chamber of Commerce debating sales tax signs for businesses in special districts

The city is working with some local businesses to reach a compromise regarding a special sales tax increase. The tax would raise costs at a few local businesses and those businesses may be required to post signs notifying customers of the change.

July 19, 2010, 4:16 p.m. Updated July 19, 2010, 5:02 p.m.

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The leader of the Lawrence Chamber of Commerce said Monday that his group is working to develop a sign for retailers to post that tells consumers how much sales tax is charged inside businesses within a special taxing district.

“But we want to do this in a way that is positive and thanks the consumer in the process,” said Tom Kern, president of the Lawrence Chamber of Commerce. “That way it isn’t perceived as being some sort of scarlet letter.”

Lawrence city commissioners will take the issue up Tuesday night as they begin discussion on a proposed community improvement taxing district for an area near 23rd Street and Ousdahl.

A group of Kansas City area developers is proposing $1.5 million worth of improvements to an area that includes the Hobby Lobby store, Yokohama Sushi restaurant, the former Kwik Shop convenience store and the former Subway sandwich shop.

The improvements would be backed by a 1-percent sales tax charged on purchases made in the district for the next 22 years. The special Community Improvement District tax — a new mechanism created by the state legislature — allows property owners to use the tax to make both public and private improvements.

Some commissioners are becoming more insistent that if the special taxes are to be used in Lawrence, special steps must be taken to make consumers aware of the higher sales tax rates.

“Based on what I’m hearing from the public, I think it is an absolute that notification has to happen,” Mayor Mike Amyx said. “I think that is just a given now.”

Chamber leaders and some businesses had balked at the idea of a sign that would draw attention to the higher-than-normal sales taxes. But Kern said his staff has come up with a sign that he thinks would serve dual purposes. The sign would thank customers for shopping in Lawrence and then state the sales tax rate charged at the business.

Kern said the signs would be made available for all businesses to post, but he said he doesn’t support an earlier proposal require all businesses in the city to post them.

Instead, what likely will be considered by commissioners is a requirement that businesses inside the special community improvement districts be required to post the signs. The requirement also could be extended to other taxing districts, such as Transportation Development Districts that allow for special sales tax rates to be charged.

The city has two of those districts currently: The Oread, a hotel near 12th and Indiana streets; and shops near the northeast corner of Sixth and Wakarusa.

At their Tuesday meeting, commissioners won’t consider final approval for the new 23rd and Ousdahl taxing district, but will discuss how they want the project to proceed.

Developers are proposing to use the special sales tax revenues for both public and private improvements. Plans call for upgrades to sidewalks, storm sewers, parking lots, and a host of building improvements.

The special taxing districts have been touted as a way to help developers finance projects in a tight economy.

“We have a number of commercial centers within Lawrence that are older and could use rehabilitation, could use a facelift,” Kern said. “This is a tool we can use to incentivize a developer to do that.”

In the 23rd and Ousdahl project, Jimmy John’s sandwich shop has agreed to fill the former Subway location. A tenant is still being sought for the former Kwik Shop location.

Commissioners meet at 6:35 p.m. on Tuesday at City Hall.

Comments

scopi_guy 4 years, 5 months ago

“That way it isn’t perceived as being some sort of scarlet letter.”

It is. Put up the signs!

Charles L Bloss Jr 4 years, 5 months ago

They had better let us know which places are charging us more sales tax! I will make certain to never give them any of my business. This is the most insane ripoff I have ever seen. Thank you, Lynn

Fred Sherman 4 years, 5 months ago

The you will never shop at Oak Park Mall, or the Legends in KCK, or spend a dime at the Power & Light district or visit the Sprint Center in KCMO.... all of these locations, and many many other retail areas in the Topeka/Lawrence/KC area have implemented this type of financing. Get over it.

jafs 4 years, 5 months ago

She has the right to shop where she likes.

Get over it.

HaRDNoK9 4 years, 5 months ago

"Who are the idiots? All the above and the citizen's for letting them get away with it!"

Bang, Bang, dead on!

BigPrune 4 years, 5 months ago

The developer needs to be taking the risk. If they cannot afford to do the development, then they shouldn't be trying to be a developer. This is just an extra security blanket for banks so they know they'll be repaid for the improvements on property that was purchased for way too much money.

Now, all the infrastructure costs absorbed by the citizens for improvements in older areas like the downtown need to be posted as well, each year, to assure fairness for all. Like when the City of Lawrence paid $90,000 for flowers to adorn Massachusetts. There should've been signs posted - I notice no mention of how much is spent by the City each year since the initial public outcry. Why is that?

Richard Heckler 4 years, 5 months ago

And the costs to the city to maintain the books on these special taxes. Notice none of this money goes into the Lawrence cookie jars. Just back into the developers pocket.

Makes me wonder whether or not Legend's is one of these special sales tax ventures?

Reminds me of what I read about Cabela;s:

Then Lawrence Taxpaying Voters should weed out the city hall “Free Lunch” program:

Here’s what happens. And this is a good example of where the news media hasn’t done a good job. I have tons of news clips that say, oh, this new shopping mall is coming or a new Wal-Mart or a new Cabela’s store, and thanks to tax increment financing, this store is going to be built. Well, what is tax increment financing? I’ll tell you what it is.

You go to the store with your goods, you pay for it at Wal-Mart, and there’s a very good chance that that store has made a deal with the government that the sales taxes you are required to pay, that government requires you to pay, never go to the government. Instead, those sales taxes are kept by Wal-Mart and used to pay the cost of the store. And typically in those deals, the store is tax exempt, just like a church.

Now, there are two ways that it’s important to think about this. One is, that means your kid’s schools, your police department, your library, your parks are not getting that money. And you’ll notice we keep saying we’re starved for money.

We’re twice as wealthy as we were in 1980, but we’ve got to close hospitals, and we’ve got to close schools, and we don’t have money for all sorts of things like after-school programs, even though we’re twice as wealthy. The second thing to think about is, imagine that you own Amy Goodman’s or Juan’s department store across the street. You suddenly have to compete with people whom the government is giving a huge leg up on. You think you would go broke after a while? Well, in fact, you will.

====================================================================

If these speculators go out of business does this mean the load comes back on Lawrence taxpayers? How are we the taxpayers protected?

HaRDNoK9 4 years, 5 months ago

"How are we the taxpayers protected?"

Um... I think it is called civil disobedience. If we all refused to pay all these taxes, and put up with all this crap what could they do about it? Nothing. We the taxpayer are protected by We the taxpayer. At least that is how it is supposed to be.

anonyname 4 years, 5 months ago

Um...it's way easier than that. It's very simple not to pay these taxes, and it's not even called civil disobedience. It's called don't shop at the establishments that charge them.

GardenMomma 4 years, 5 months ago

Yes. The Legends has a special tax.

http://www.ksrevenue.com/pdf/forms/pub1700710.xls click on the third tab over on the top, "Special Jurisdiction Addresses"

10631 Parallel Avenue
10833 Parallel Avenue
1933 Prairie Crossing St
1703 Village West Parkway
1709 Village West Parkway
1711 Village West Parkway
1801-1839 Village West Parkway (odd addresses)
1843 - 1867 Village West Parkway (odd addresses)

Richard Heckler 4 years, 5 months ago

"Enforcement is a joke these days, because there simply are no cops. Johnston said that, while the number of US taxpayers is growing rapidly, the number of IRS auditors is down by a third—and, not surprisingly, cheating is on the rise.

The story is the same at the Department of Labor, OSHA, and other agencies tasked with keeping America 's economic and employment rules fair and equitable.

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).

David Cay Johnston

Again is Legend's charging and extra unadvertised sales tax?

Why does the local Chamber of Commerce have against honesty and transparency for the consumers?

In the proposed fiscal year 2011 budget for outside agencies:

 1.  Human services are frozen.

 2.  The Chamber of Commerce is getting increased funding from $185,500 to $219,500.
      This is an increase of 18%. ( This may be on tomorrow nights city commission agenda)

Given the Chamber's record of failure in economic development, it strikes me as long past time to seek new expertise and guidance and not to give the Chamber a raise.

Why Not cut them off? Hey taxpayers it's OUR money!

Bring economic development into City Hall in the name of our tax dollars and transparency!

ToriFreak13 4 years, 5 months ago

What happened to just printing the tax rate on the receipt? When and why were businesses allowed to stop doing this?

ToriFreak13 4 years, 5 months ago

It should still be on my receipt. I am allowed to itemize state taxes paid if it exceeds my state income tax withheld. Looking like it is leaning more towards the sales tax every day. But if I get a receipt that has all the taxes combined...and the IRS does not ok me writing off this special tax...someone has to be held responsible for breaking down how much of the tax went to sales etc.

ToriFreak13 4 years, 5 months ago

ps. getting it on a receipt is your only chance at evidence. Any business can post the sings somewhere hardly anyone can see them...or are we going to create another law to enforce where the signs are and/or is that what they are actually charging? If this is going to happen...the businesses have to be held accountable. Again I ask...when and why were businesses allowed to stop printing this information? or were they?

redneck 4 years, 5 months ago

It's not hard to figure the tax percent. Just divide the tax by the subtotal. 0.07948 would be equal to 7.95%. Looks like the south Wally-World charges 8.85% (percent printed on the receipt) sales tax. Jerks! This horse crap has got to stop! It's time we clean house in the politician department. Out with the old, and in with the new!

no_thanks 4 years, 5 months ago

I guarantee you that I am as anti-tax as the next person, but this tax, in my opinion, is acceptable for three reasons. First, and foremost, the City/County IS NOT responsible for funding the tax (unlike a TIF or TDD). Second, I am obligated to pay the tax only if I choose to make a purchase at that location (voluntary exchange). Finally, the developer bears the investment risk of improving the property, which increases the value of the property, thus leading to higher property taxes for the location. There is no guarantee that the developer will make money on the retail establishment, so this taxing district is an incentive to make the investment.

And, yes, CID financing is used at the Legends and they've had no shortage of shoppers. Again, shop there or don't shop there as the choice is yours, but at least its voluntary. Complain about our taxes supporting entities for which you don't have a choice (other than clear City/County Operations such as police, fire, EMT, and street maintenance), and I'll join the chorus.

no_thanks 4 years, 5 months ago

JR-I may not be the most discriminating buyer, but my guess is most people aren't going to think twice about buying something if it is prices 1% less than the competition (except for big ticket items, such as autos). But, even if consumers did think like that, the buyer will either not complain due to the overall value of the store (due to the service, convenience, etc.) or he will have remorse and not buy there anymore. Again, the business owner must still provide a product or service valued by the community in order to gain from the CID incentive.

no_thanks 4 years, 5 months ago

I don't disagree with your point as long as all business agree to invest in their property. I don't know what the average retail ticket is in Lawrence, but my guess is its less than $50. But, for kicks, lets assume thats correct, and that the store has 100 customers a day and is open 365 days per year (aggressive assumptions). The store owner would collect an extra $18,250/year...a nice gain to be sure. However, when considering that a conservative investment for upgrading these old buildings is $250,000, plus interest, it will take many years to payoff the investment, and all the while the City/County is collecting higher property taxes

redneck 4 years, 5 months ago

I agree with JR. What ever happened to honesty, and being up front?

anonyname 4 years, 5 months ago

@no_thanks: You state you are 'obligated to pay the tax only if I choose to make a purchase at that location (voluntary exchange)." This is true...but if you do not have knowledge of the tax prior to choosing whether or not to make your purchase there, it's not a voluntary decision to pay the incremental tax. You're already stuck at that point. I think these types of taxes are pure BS, but if they cannot be overturned, there must be signs at the entrances to each establishment making it clear to customers that they are choosing to pay the extra tax if they do enter.

LadyJ 4 years, 5 months ago

This was posted some time back, you can find the places that have special taxes. Scroll down to about page 15 for the addresses of the bussinesses charging extra taxes. http://www.ksrevenue.org/pdf/forms/pub1700710.pdf

MrMister 4 years, 5 months ago

How much will these signs cost? For the cost of a few cans of spray paint and a burger, some gang banger could just run around and tag each of them with a big red "T". And as for the advertising lower prices due to the hidden tax, well maybe W-mart, but not Smash(tax) burger. Have you seen what they charge for a burger in that place?

Keith 4 years, 5 months ago

And for once, you can't blame the Democrats, our lovely Republican state legislature crafted this law.

jafs 4 years, 5 months ago

They did, but the city didn't have to use them.

That decision lies squarely at the feet of the current city commission.

inquire 4 years, 5 months ago

How about this..... Let's just post the price of the product as is AFTER ALL TAXES ARE ADDED. There simple and effective. If you tax more, the price would be higher than say, across the street.

Richard Heckler 4 years, 5 months ago

• $500,000 for economic-development activities and projects, designed to create jobs and boost the Lawrence area’s competitiveness in luring new companies and expanding existing ones ( This appears to MORE money for the Chamber of Commerce)

Such dedicated spending has been lacking for far too long, Thellman said, especially as other areas build on their own historic heritage and set aside millions more dollars per year to entice employers.

“We can only go on charm and beauty and quality-of-life issues for so long,” Thellman said. “We have to invest.”

I would have to disagree with Nancy Thellman on this one. Lawrence is so over built that it is difficult to attract tenants. A moratorium on new construction is one answer for certain.

When markets are over built that means Lawrence commissioners approved way too much in the last 15 years instead of growing responsibly and methodically.

Is Lawrence going to try to tell seasoned business people our markets are not flooded when they can see for themselves?

Richard Heckler 4 years, 5 months ago

Lawrence,Kansas is a small town that does NOT have millions upon millions to throw at a problem that will be difficult to fix. Throwing $500,000 or millions is no guarantee that the Lawrence over built scenario will go away anytime soon.

As for the bio research industry Lawrence is far far far from the only town reaching out to this market.

Why not do market impact studies from 3 different outside sources?

Plus perform a Cost of Community Services Study to determine what is NOT paying back and perhaps determine which direction Lawrence should go,

Richard Heckler 4 years, 5 months ago

Basic findings:

  1. Lawrence is overbuilt in housing: Homes were built faster than popualtion growth supporting these homes. Excessive subdivisions caused an outmigration from older neighborhoods causing a severe loss of value, a loss of dwelling units, and a variety of other problems such as school closings.

  2. Lawerence is overbuilt in retail: Stores were built faster than retail spending growth supporting these stores. This excessive growth has hurt the public and private investment in downtown redevelopment (e.g.: the empty $8 million parking garage, the empty Hobbs-Taylor space, etc.) and has caused deterioration and blight in existing shopping centers (e.g.: Tanger Mall, Food-for-Less, etc.)

  3. Douglas County is overbuilt in manufacturing and warehousing; employment in these sectors is declining, not growing. Yet, the Chamber calls for more and more space in the false belief that more supply creates more demand.

  4. Office space in Douglas County is relatively well balanced, but the market for office space is severely crippled by the excessive supply of unused retail space which is competing for office tenants.

Basic strategy:

Lawrence should adopt a policy of "cooling off" the pace of development. Note: This is not a moratoriam; it is a consicous effort to redirect growth to existing neighborhoods and districts where it can be beneficial.

Housing: The city should stop approving new subdivisions until the existing supply of surplus homes is eliminated. It should direct housing investment back into older neighborhoods so as to preserve and protect the existing public and private investment there.

Commercial space: The city should stop approving plans for new commercial space until the existing surplus is eliminated. It should direct investment into the preseration of the downtown and other existing commercial districts so as to preserve and protect the existing publid and private investment there.

Kirk McClure – Lawrence,Kansas

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.

BigPrune 4 years, 5 months ago

Merrill, The surplus commercial space is a result of restrictions imposed by the progressive city commisisoners when they were in power. They made it impossible to rent a vacant space. A conspiracy that lasted for 5 years. I know from personal experience. I had to open a business in Lenexa (which was a cake walk when compared to Lawrence). Lawrence was one of the most restrictive towards new business cities in the country for 5 years. Ask your so-called "expert" you cut and paste about the conspiracy created by the "progressives" above. It cannot be denied.

If you need specifics, I can give you a whole list of specifics the "progressives" created. Now Lawrence has to overcome a major stigma.

BigPrune 4 years, 5 months ago

Merrill, The surplus commercial space is a result of restrictions imposed by the progressive city commisisoners when they were in power. They made it impossible to rent a vacant space. A conspiracy that lasted for 5 years. I know from personal experience. I had to open a business in Lenexa (which was a cake walk when compared to Lawrence). Lawrence was one of the most restrictive towards new business cities in the country for 5 years. Ask your so-called "expert" you cut and paste about the conspiracy created by the "progressives" above. It cannot be denied.

If you need specifics, I can give you a whole list of specifics the "progressives" created. Now Lawrence has to overcome a major stigma.

Keith 4 years, 5 months ago

Since it is for the developers' use, I suspect it never makes it out of their hands.

cowboy 4 years, 5 months ago

Given the enactment of the recent tax to support the T and other municipal nonsense the city only needs to post signs at the city limits stating the following:

Our city sales taxes are high , some places are even higher , Welcome to Lawrence

nut_case 4 years, 5 months ago

Just curious - is there a way to opt out of the city trash pick-up fee? Between recycling and stuff they don't pick up anyway, I hardly have any 'trash' to set out anyway. Hate to pay even more for the privilege of setting out one bag of trash each month.

Centerville 4 years, 5 months ago

How about a sign at EVERY cash register in Kansas.
"Warning: Price will include the midwest's highest sales tax rate, thanks to the Kansas Legislature"

whyeyeoughtta 4 years, 5 months ago

“But we want to do this in a way that is positive and thanks the consumer in the process”

Gee, really? Garsh... such compassion and warmth for us Consumers.

Mary Sucha 4 years, 5 months ago

How about a sign that tells consumers where THEIR sales tax money goes -

State 6.3% Local x% Private Developers(chamber of commerce) x%

jackson5 4 years, 5 months ago

The signs should include a tally of tax dollars retained by the developer on a quarterly basis. The chamber wants businesses to thank consumers for their support on the sign. It would be helpful for everyone to know how much support in dollars was provided.

Tammy Copp-Barta 4 years, 5 months ago

I want to know if anyone knows how many of these special tax areas are owned by Doug Compton?!?!?!?!?!

julz 4 years, 5 months ago

Agree with BigPrune - why do developers need incentives? How about some incentives for me to shop at these businesses with higher tax? Coupons, discounts etc

Thanks Lady J for the list of businesses in Lawrence currently charging this special tax.

MrMister 4 years, 5 months ago

Julz, that would be a great idea. Most businesses give coupons when they first open to get more people to come in and give them a try. I found it very interesting that Smash burger just littered the city with menues that had no coupons attatched. I tried them, they are good, but I can't afford to eat there. I guess I won't be paying their tax after all.

absolutelyridiculous 4 years, 5 months ago

You have got to be kidding me! I already boycott Bauer Farms because I don't like paying for Mr. Compton's development. And I hope Hobby Lobby moves because I'll have to boycott that too.

Our city leadership has OFFICIALLY lost their collective minds.

absolutelyridiculous 4 years, 5 months ago

I can't just let this one alone:

“But we want to do this in a way that is positive and thanks the consumer in the process,” said Tom Kern, president of the Lawrence Chamber of Commerce. “That way it isn’t perceived as being some sort of scarlet letter.”

It WILL be a scarlet letter because some people will refuse to shop at these ever-so-special locations.

“We have a number of commercial centers within Lawrence that are older and could use rehabilitation, could use a facelift,” Kern said. “This is a tool we can use to incentivize a developer to do that.”

Mr. Kern...you have sold your soul to the developers...just like the city commission. You have put the last nail in the coffin at the Chamber.

Who knows a good realtor? I'm finished.

Richard Heckler 4 years, 5 months ago

"A group of Kansas City area developers is proposing $1.5 million worth of improvements to an area that includes the Hobby Lobby store, Yokohama Sushi restaurant, the former Kwik Shop convenience store and the former Subway sandwich shop.

The improvements would be backed by a 1-percent sales tax charged on purchases made in the district for the next 22 years. The special Community Improvement District tax — a new mechanism created by the state legislature — allows property owners to use the tax to make both public and private improvements. "

Do the developers PAY FOR THE IMPROVEMENTS up front? Or are we taxpayers lending them the money? Taxpayers need to know everything about this set up!

Mary Sucha 4 years, 5 months ago

The city will issue bonds for the improvements and dedicate the proceeds from the tax to pay off the bonds. So, the taxpayers of Lawrence will be on the hook if the tax proceeds do not materialize. We wouldn't want private business to have to invest anything would we?

"Privatize the profits and Socialize the debt"

chocolateplease 4 years, 5 months ago

For one thing, the Legends was a massive and new-concept (for that area) development in an area that had nothing of the kind nearby. I'm not saying it was correct to allow them a "special" tax, but you cannot compare that kind of thing with these strip mall developers in Lawrence going after this kind of money to line their own projects at taxpayer expense!

If they don't expect the investment to pay off, the developers simply shouldn't do it. If the city approves this, there's no reason why every single developer should resist the handout EVEN if they don't expect greater numbers of sales! In that case, there's NO benefit to the city, but Mr. Developer walks away with cash out of our pockets, improving their site so that when they sell or lease it to someone else, they get more for it.

skinny 4 years, 5 months ago

The sales taxes collected by the businesses need to be posted as I will not shop at a business that charges more then the going city/state sales tax.

thefactsare 4 years, 5 months ago

skinny - i'd like to know where you shop at now because i'm willing to bet that it's a place that charges an extra tax of some sort.

Don Whiteley 4 years, 5 months ago

This is about as dumb an idea as a city could dream up. First, make only certain businesses in certain areas subject to a "special" sales tax, then tell people it costs more to buy things in these businesses than in businesses in other parts of the city. That way, you can mark certain business zones and totally wipe out business in those areas of town.

jafs 4 years, 5 months ago

The businesses aren't "subject" to this tax, they are requesting it. It is not really a tax, in that it goes into the developer's pocket for private use, not the city's use.

If they don't want to notify people and be transparent about their attempt to make more money, why should we patronize their business?

I've argued against the city allowing these districts at all, but to paint them as some sort of "business-unfriendly" idea of the city's is absurd. Obvious notification is completely warranted, if the city is going to allow this nonsense at all.

love2fish_ks 4 years, 5 months ago

8.8% sales tax in lawrence and now a second section of town moving to a 9.8% sales tax. Oh my goodness.

Here's an idea that will drive massive amounts of revenue and direct customers to traditional businesses. TAX Wal-Mart an addition 2% to help pay for all the blight they cause.

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