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Archive for Sunday, August 21, 2011

Downtown Lawrence property values, taxes both made significant gains over past decade

August 21, 2011

Related document

Downtown Mass. database ( .PDF )

Downtown owners discussion

The Journal-World held a roundtable with a group of downtown property owners earlier this summer. They discussed the changing face of downtown. Read their comments in this related story.

OK, so maybe we’re not great at geometry, because undoubtedly Lawrence’s public square is not a square at all.

Massachusetts Street — specifically, six straight-as-an-arrow blocks as it runs through downtown — has long been the city’s gathering place.

Sidewalk diners, a rooftop Santa, streetside flower planters, out-of-town license plates in search of that elusive parking space. Then there are the people. Honk for hemp, a guitar-picker with an overturned hat, a parade of grocery cart-pushers, a moped-riding go-fer whom everyone calls Toad.

It is easy to forget that Massachusetts Street isn’t just a public carnival. It’s also a real estate development. Those 19th century buildings that line the streets all have owners, all pay taxes and many have had a long list of tenants come and go.

The Journal-World has gathered a host of data about Massachusetts Street and how it has changed over the last decade.

Check out this database of building owners and property values around downtown Lawrence. After you've looked at the map, scroll down a little further for some interesting facts about downtown and its changes.

Google Map

Interactive map of downtown business property values

Take a look at property values, ownership information, tenant listings and other data for every Massachusetts Street property from Sixth to 11th streets.

What’s it worth

• $81.2 million is how much Massachusetts Street is worth in 2011, according to the tax values on file at the Douglas County Courthouse. Over the last 10 years, the value of Massachusetts Street from Sixth to 11th has grown by $32.5 million.

• $437,600 is the median value of a building on Massachusetts Street. In 2001, the median value was $273,400. That equates to a 60 percent increase, or about 6 percent per year for the last decade.

• $13,520 is how much that average-valued commercial building would pay in property taxes in 2011, based on current tax rates. That means whatever merchants are in that building need to sell at least $1,126 worth of stuff each month just to pay the property taxes.

In 2001, the average-priced commercial building in downtown paid $623 in property taxes each month. That’s an increase of 80.7 percent for the decade. That rate of increase was nearly 3 times the rate of inflation, which was 28 percent for the decade, according to the U.S. Bureau of Labor Statistics.

• Any guesses on the highest-valued building along Massachusetts Street? Perhaps the iconic Eldridge Hotel? No. Then, the U.S. Bank Tower that tops the downtown skyline? No. When it comes to value, think newer. The building that houses The Gap, of all things, has the distinction of being the highest-valued building in downtown. The building at 643 Mass. also is home to Chicos, Deciphera Pharmaceuticals on its upper floors, and a host of offices including those for Gene Fritzel Construction. The property, owned by a group led by the Fritzel family, is valued at $5.1 million.

Here’s a look at the top 5 valued properties along Massachusetts Street:

  1. 643 Mass. $5.1 million
  2. 911 Mass., which includes Chipotle, Fed Ex, Safee’s and various offices: $3.1 million.
  3. 701 Mass., The Eldridge Hotel: $3.0 million
  4. 900 Mass., the U.S. Bank Tower: $2.7 million
  5. 645 and 647 Mass., which include Claire’s, Coldstone Creamery, Starbucks, and Winfield House: $2.5 million.

Note: The Journal-World’s corporate offices and printing plant have frontage along Massachusetts Street. It was not included in this database because its address is 609 N.H., and it does not take access off Massachusetts Street. It has a 2011 appraised value of $3.0 million.

• What about the other end of the scale, you ask? Here are the five lowest-valued buildings along Massachusetts Street:

  1. 1033 Mass., Rex’s Stadium Barbershop: $170,200
  2. 812 Mass., The Juice Stop: $181,600
  3. 944 Mass., The Red Lyon Tavern: $194,000
  4. 1014 Mass., Sylas & Maddy’s: $195,300
  5. 737 Mass., Made: $197,700

Going up, up, up

• The average increase in value for a Mass. Street property was 6 percent a year, or 60 percent for the decade. But there were many properties that saw a lot larger increase than that. Many were the site of new developments. Here’s a look at the five largest percentage increases in value over the decade:

  1. 945 and 947 Mass., which include Ingredient restaurant and multiple apartments: 299.4 percent.
  2. 712 and 714 Mass., which include House Parts, a vacant space that is set to become a Mexican restaurant, and multiple apartments: 286 percent.
  3. 936 Mass., The Toy Store: 246.5 percent
  4. 1011 Mass., The Pita Pit: 224.9 percent
  5. 802 Mass., Sunflower Outdoor & Bike: 224.6 percent

• The five properties that had the lowest increase in value over the decade:

  1. 724 Mass., the vacant space that formerly housed Jo Shmo’s restaurant: negative 5.0 percent
  2. 907 Mass., The Mad Greek restaurant: 17.4 percent
  3. 701 Mass., The Eldridge Hotel: 18.8 percent
  4. 840 Mass., Antiques Bazaars II: 26.6 percent
  5. 623 Mass., M&M Office Supply: 28.6 percent

Who owns Mass. Street?

• When it comes to people, Lawrence businessman and apartment magnate Doug Compton is the top owner of Mass. Street property. Compton either individually or as part of a group owns at least 12 Massachusetts Street properties, according to ownership and corporate records from the Douglas County Courthouse and the Kansas Secretary of State’s office.

But Compton is not alone in having a heavy stake in Mass. Street. Others who own significant amounts of property — again, either individually or through a partnership — include:

— George and Judy Paley, who started out as retailers with the old Natural Way store, 9 properties.

— Various members of the Fritzel family own four properties, including three of the five Mass. Street properties that have values of more than $2 million.

— Longtime downtown retailer Rod Ernst, of Ernst & Son Hardware, owns four properties.

— The local Park & Jean Hetzel III Trust also owns four buildings.

• Let’s take a little trip back to 2001. According to listings in the Polk Directory, here are some businesses that were on Mass Street in 2001 but aren’t any longer: The Toy Moon; Eddie Bauer; Fields; Silver Works and More; The Topiary Tree; Alley Cat Records; The Bay Leaf; Southwest & More; Paradise Cafe; Brown Bear Brewing Co.; G. Willikers; Maurices; Aces & Eights Warped Sports; Carlson Wagonlit Travel; Round Corner Drug; The Casbah; McQueen Jewelers; Lotus Vegetarian Restaurant; Randall’s Formal Wear; The Bike Shop; Border Line; Natural Way; Kief’s Music; Eastons; Lady Campbell’s; Penny Annie’s; Bo-Van Gift Shop; The Hawk’s Loft; Backwoods Equipment; Sugartown Traders; Blue Heron; Grammer; Everything But Ice; New York Burrito; Mass Street Deli; Low Rider Mexican Café; Connex International; Hopkins Sheet Metal; Jersey’s Bar & Grill.

Ah, the memories — one Mass. Street commodity you can never put a price on.

Comments

lunacydetector 2 years, 7 months ago

the u.s bank tower is only valued at $2.7 million. how do they swing such a low valuation? how does the county justify that monstrosity so low? it is by far the largest building downtown and the replacement cost alone is 5 times the appraised value. will mr. compton's big building be valued similar to the u.s. bank building next door? that applies to comparing a like property. i'd love to hear the excuse. please mr. reporter.

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Carol Bowen 2 years, 7 months ago

"At LJWorld.com, you’ll find a database and map that lists every Massachusetts Street address from Sixth to 11th streets."

Again, LJW limits the news in the newspaper. Who will read all those ads if readers get their news online? This seems counterproductive.

Chad?

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Steve Jacob 2 years, 7 months ago

Does show why we are losing retail downtown. You can't markup "stuff" too high, but food and drinks, you can mark way up.

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1983Hawk 2 years, 7 months ago

Bozo is correct on all counts

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just_another_bozo_on_this_bus 2 years, 7 months ago

Interesting discussion on taxes, individuals vs. business.

But where we find ourselves today is that taxes that were once collected on business personal property were eliminated, along with many other business taxes along the way since the mid-nineties.

The net result is a rather sizable deficit that's been partially mitigated by an increase in sales taxes and real estate property taxes, which disproportionally affects the lower 80 percentile (income wise) of the state's residents.

Probably the main reason that personal property of individuals isn't taxed is two-fold-- it'd be an enforcement nightmare, and the wealthiest of individuals, who also tend to own businesses, would be particularly hard hit by it-- and they can afford lobbyists and campaign contributions to make sure that doesn't happen.

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1983Hawk 2 years, 7 months ago

So since you are all about tax equity, no doubt you will advocate for repeal of the business aircraft property tax exemption. Planes owned by individuals are taxable, but business aircraft are not. See how fun it is to selectively discuss the tax code?

As for the larger point, I'm still not sure you addressed why it was best for local control to be removed from business personal property tax exemption decisions; or whether this or any other tax break businesses ask for ever pans out the way they say it does. No, looking back, it seems that you in fact refused to address either point. Speaking of all these business computers and equipment you keep kvetching about, you do realize that many of them are exempt from sales tax, too, right (and have been prop tax exempt since 06), whereas individuals have to pay sales tax on many of these items. But you're all about "equity", eh?

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Sigmund 2 years, 7 months ago

Why should personal property of businesses be taxed, but not personal property of individuals? Surely they both should be treated equally to avoid all this confusion? BTW, I too can not find any special exemption for businesses for ATV's, boats, etc. Everything I find is that they are taxed to businesses and individuals when they are registered and licensed. Maybe that is a urban myth?

I think you would have more credibility if you wanted the personal property like computers, furniture, etc of both individuals and businesses taxed. That way the government can use both revenue streams to create that economic growth you think the state would provide if they just had extra tax dollars. I am sure you also want to pay your fair share to get the economy booming again.

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1983Hawk 2 years, 7 months ago

Motor vehicles, including trucks, are taxable to businesses. All other personal property, including boats, ATVs and aircraft are exempt. Aircraft has been exempt for business use for decades. All other commercial and industrial machinery and equipment property, including boats and ATVs was exempted in 2006. Sorry for not having the specific statute committed to memory. Any luck on finding studies about how the Kansas economy was to grow faster than the rest of the nation's in 2006-08 as a result of that exemption, which was the primary claim of the corporate welfare statists?

Locals already had the power to take business property, both real and personal, off tax rolls with IRBs or article 11, section 13 eco devo exemptions after doing cost/benefit analyses. So if business felt unfairly taxed relative to individuals, they could make the "job creation" case to local officials. But the state came in and unilaterally took ALL business personal property off tax rolls with nothing more than vague assurances from Chamber. So much for local control. I ask again: where was all the job growth? Surely Koch-funded PACs must have some data hot out of the microwave for us, hmm?

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Sigmund 2 years, 7 months ago

1983Hawk (anonymous) says… "All business personal property is exempt statutorily. It's somewhere around KSA 79-201. Boats, ATVs, and business aircraft, too."

Statute 79-201: Property exempt from taxation; religious, educational, literary, scientific, benevolent, alumni association, veterans' organization or charitable purposes; parsonages; community service organizations providing humanitarian services; electric generating property using renewable technology; landfill gas and production property.

I don't think that is quite right. Pretty sure every motor vehicle, boat, ATV is taxed to everyone when registered and licensed.

I get that you want the personal property of businesses taxed but not the personal property of individuals. I just don't see any justification one way or another why either individuals and businesses should not both be taxed or neither should be taxed on personal property, other than you hate or are jealous of people who are in business. Businesses just pass on those taxes to consumers raising the costs of the products.

Anyway I assume if revenues to government is your primary concern then you want both individuals and businesses taxed equally on their personal property with neither getting any exemptions.

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1983Hawk 2 years, 7 months ago

All business personal property is exempt statutorily. It's somewhere around KSA 79-201. Boats, ATVs, and business aircraft, too.

Time to get off of our knees in front of the business boys. This huge tax break was handed out in 2006 to "stimulate" the economy. Where's the evidence jobs were created, even in the 2-years before the global meltdown? How much if any of the tax savings was reinvested in local economy to boost jobs and wages for homeowners paying higher mill levies because yet another business horse had been unhitched from wagon? Please provide links to all of this information. My original point is that a business may have been paying 8k in 2001 real estate taxes and 2k in equipment/machinery for a total of 10k. And maybe in 2011, they are paying 10k real and zero personal. But article leaves impression of "omg, they had a 25 pct prop tax hike." False.

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Sigmund 2 years, 7 months ago

1983Hawk (anonymous) says… "The only remaining inequity is that certain personal property of individuals, boats and ATVs, is still taxable."

I could find no personal property tax exception for businesses for boats and ATV's. I believe they are taxed when they register/license them just like everyone else. Could you provide a link?

Otherwise I get that you want the personal property of businesses taxed but not the personal property of individuals. In other words, businesses should pay taxes on their furniture, computers, desks, stereo equipment, refrigerators and the like, but individuals should not. Dan Hughs should be taxed on the computers at Sunflower Bike but not his computer at home. Besides causing Sunflower to raise their prices to their customers (including increased sales taxes to his customers) what is your justification. Out of fairness wouldn't you want everyone to pay their fair share and tax everyone's stereo's, computers, TV's, refrigerators, furniture, etc?

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1983Hawk 2 years, 7 months ago

Businesses have not paid personal property taxes on any equipment acquired on and after 7/1/2006. The only remaining inequity is that certain personal property of individuals, boats and ATVs, is still taxable. Repealing the business exemption would be the best way of addressing it, since police and fire protection are given for their personal property. This would have the added advantage of broadening the tax base and reducing mill levies on both commercial and residential real estate.

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Sigmund 2 years, 7 months ago

1983Hawk (anonymous) says… "All of which shifts the tax burden, especially the property tax burden, that much more on to residential property. For the record, Kansas used to tax certain household personal property, especially jewelry, until 1965. Kansas still taxes boats and ATVs, which receive police and fire protection just like exempt business equipment."

Not really. Both business and residential pay real property taxes as well as personal property taxes on vehicles (at the time of vehicle registration). As I understand your comments (could you provide a link I could bookmark?) only businesses pay personal property taxes on chairs, desks, computers, TV's, bicycles, stereo equipment, etc, etc (which are passed on to their customers in the form of higher prices, and with higher prices in higher sales taxes their customers pay). To make things fair do you advocate eliminating those personal property taxes on businesses or expanding those taxes to individuals?

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1983Hawk 2 years, 7 months ago

Kansas abandoned our inventory tax in the 80s, and most states also have joined in the race to the bottom in giving business whatever tax breaks they want. All of which shifts the tax burden, especially the property tax burden, that much more on to residential property. For the record, Kansas used to tax certain household personal property, especially jewelry, until 1965. Kansas still taxes boats and ATVs, which receive police and fire protection just like exempt business equipment.

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Sigmund 2 years, 7 months ago

Related document: Downtown Mass. database ( .PDF ) Source: Douglas County appraiser’s office, Kansas Secretary of State http://media.lawrence.com/news/documents/2011/08/20/DowntownMassAddII.pdf

Nice piece of research Chad, but usually a "database" doesn't come in pdf format. Could you tell us if the Douglas County appraiser office and the Kansas Secretary of State provided their information as a pdf, spreadsheet, or database format(s)? Could make those documents available also?

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Sigmund 2 years, 7 months ago

1983Hawk (anonymous) says… "U don't remember correctly. Since 1989, inventories have been exempt; and equipment and machinery was taxed under a special sweetheart depreciation formula concocted by business with an assessment rate of only 20 and later 25 percent of it's pretend value."

Thanks for the info, do you have a link I can bookmark? The vast majority of states don't have inventory taxes, but why should a business pay a tax on their personal property when individuals do not? To make it fair would you advocate expanding your personal property tax to include not only your car but your bikes, your computers, your TV's? Why or why not?

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1983Hawk 2 years, 7 months ago

U don't remember correctly. Since 1989, inventories have been exempt; and equipment and machinery was taxed under a special sweetheart depreciation formula concocted by business with an assessment rate of only 20 and later 25 percent of it's pretend value. This was from 1989 thru 2006, when all new business property has been totally exempt. Was gonna stimulate the economy and create jobs, dontcha know.

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Sigmund 2 years, 7 months ago

1983Hawk (anonymous) says… "And how much in property taxes did they pay on business equipment and machinery in '01 (a lot) vs '11 (none), thanks to huge exemption Chamber got from legislature."

Why should any business in Kansas pay a personal property tax or a inventory tax? At the end of the day they don't pay them, you and other customers pay them as a higher cost of goods and services. If you are an individual, your personal home furnishings are not subject to personal property tax. Only businesses pay a personal property tax on their equipment, such as desks, chairs, stoves, refrigerators, computers, etc. http://www.douglas-county.com/depts/ap/docs/pdf/ap_ppaf_business.pdf

Why should a business pay a tax on those items when individuals do not? To make it fair would you advocate expanding your personal property tax to include not only your car but your bikes, your computers, your TV's? If I remember correctly when these items are new their valuation and tax to business are as much a 80% of their original costs and decline only slowly year after year.

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Keith Richards 2 years, 7 months ago

How did the Eldridge only increase in value 19% over a decade? They had extensive renovations, and the property is huge.

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pizzapete 2 years, 7 months ago

To better understand our downtown real estate bubble I'd like to see the increase in values and rents from the early 80's and 90's up to today. Sure a few developers have over paid for buildings downtown in the last ten years but what where the prices 20 or even 30 years ago before the super greed took over?

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lunacydetector 2 years, 8 months ago

the u.s bank building tower is only valued at $2.7 million????? how do they swing such a low valuation? how does the county appraiser justify that monstrosity so low? it is by far the largest building downtown.

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1983Hawk 2 years, 8 months ago

And how much in property taxes did they pay on business equipment and machinery in '01 (a lot) vs '11 (none), thanks to huge exemption Chamber got from legislature. This is why levies were driven up on all real estate, residential as well as commercial, but feel free to ignore the corporate welfare and focus myopically on a subset statistic - commercial real estate only - that makes it appear heavy hitters have taken it in shorts. U get this idea from Fixed News?

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Richard Heckler 2 years, 8 months ago

Seems to me a business would need to gross $100,000 per month to afford all of the overhead which can be extensive.

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macon47 2 years, 8 months ago

chad, it is hard for me to understand , why you keep deleting my posts??

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Rancho 2 years, 8 months ago

If they paid $1,126 for the goods they sold and marked it up 30% for a profit of $337, then they would have to sell $3751 to pay the tax. The original cost of goods would be used to buy more of the stuff they just sold. Shall we move on to rent, insurance etc?

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macon47 2 years, 8 months ago

actually to earn 1126 bucks at a 30% gm, they would have to sell 3755 dollars per month (or 125 dollars per day) just to pay the taxes the other goes to cost of good sold, and i didnt get a degree from ku

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just_another_bozo_on_this_bus 2 years, 8 months ago

"$13,520 is how much that average-valued commercial building would pay in property taxes in 2011, based on current tax rates. That means whatever merchants are in that building need to sell at least $1,126 worth of stuff each month just to pay the property taxes."

They'd still have to pay for the goods they sell. So assuming a 30% markup, they probably need to sell more like $1500 a month.

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Richard Heckler 2 years, 8 months ago

How many of those values are inflated? What is true market value?

Property values all across the USA have taken serious hits as a result of the Bush/Cheney fiasco and 11-17 million are looking for good paying full time work?

Yes I am questioning the accuracy of those property values. After all the market values of homes are more than likely less than what is owed. Sometimes quite significantly.

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irvan moore 2 years, 8 months ago

could you please name any city commissioners who own property downtown and what the values of those might be?

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