To the editor:
The hotel proposed at 900 N.H. has become controversial. At a recent meeting, the developers indicated that they plan to request tax-increment financing (TIF) for the project. With TIF funding, the city provides funding for development projects, in effect “betting” that tax revenues will increase sufficiently that the city can recover its investment later.
Consider an example. Washburn-Lane Parkway Renovation LLC was granted $5 million in TIF funding in 2006 to create apartments, town homes and retail space in the College Hill district of Topeka. However, only slight increases in tax revenues resulted, so Topeka is not recovering its money. The town homes are empty, the apartments 60-70 percent occupied and retail space mostly empty. The developers are not even paying their property taxes: $130,196.77 unpaid at last report (Topeka Capital-Journal, Oct. 28, 2010). Lawrence’s own Douglas Compton is among the developers.
The proposed Lawrence development includes a hotel, apartments, restaurant and retail space. Compton and colleagues are confident that it will increase tax revenues enough to merit TIF financing. And if not, as in Topeka? The city would eat the losses. Translation: If Compton’s development fails, the people of Lawrence pay for it. No TIF financing has as yet been requested, but the developers indicated that they would. Compton indicated that he was investing $6.5 million of the $18 million needed; clearly, the developers plan to draw much of the rest from TIF. As per Lawrence city resolution 6789, the developers will argue that this project is viable only with TIF funding. The final straw … Lawrence residents will end up paying for it.