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Archive for Wednesday, June 1, 2011

Olive Garden considering building restaurant on South Iowa Street

Chain interested in Lawrence, but only if financial incentives approved

An empty lot at 27th and Iowa streets could be the new home of an Olive Garden in Lawrence.

An empty lot at 27th and Iowa streets could be the new home of an Olive Garden in Lawrence.

June 1, 2011

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The home of the never-ending pasta bowl soon may provide the next chapter in what seemingly has become Lawrence’s never-ending debate:

How much should City Hall do to lure businesses to town?

Development and City Hall leaders confirmed Wednesday that officials with the Olive Garden Italian Restaurant are considering a South Iowa Street site for a restaurant but said a property tax break will be needed to get the deal done.

The national chain is in discussions with Mission-based MD Management about a site at the northeast corner of 27th and Iowa streets, a vacant corner that once housed a Mazzio’s pizza shop and a Chinese restaurant.

“They are very interested in the site,” said Matt Gough, a Lawrence attorney who is representing MD Management.

But Gough said the project won’t get done unless city, county and school district officials agree to allow some of the property taxes generated by the development to be used to help pay for improvements at the site.

“It is absolutely essential,” Gough said of the provision.

Neighborhood Revitalization Act

MD Management officials are expected to request that the city use the Neighborhood Revitalization Act to spur the development. City commissioners recently agreed to use the Neighborhood Revitalization Act to entice Lawrence-based Treanor Architects to move its headquarters downtown.

The act functions like a tax abatement, but not quite. Unlike a tax abatement, the development would pay 100 percent of its property taxes each year. But it then would receive a rebate on a portion of those property taxes. The act, however, stipulates that not all of the property taxes can be rebated back to the development. Specifically, local governments must receive at least as much in property taxes from the site as they did before the project occurred.

Divisive issue

Details about how large of a rebate or for how many years the development group would seek a rebate haven’t been set. But the issue already was creating divisions.

Doug Holiday — an owner of Biggs BBQ and the president of an organization that markets locally owned restaurants — said the more than 20 restaurants in the Lawrence Originals group are against the idea of a tax break for the development.

“If they want to do it, let them do it on their own dime, not on the backs of taxpayers,” Holiday said. “If you start giving tax incentives to chain restaurants, there won’t be any local restaurants. Lawrence would become like Olathe, where it is hard to find a locally owned restaurant.”

City commissioners also are likely to be divided on the issue. City Commissioner Mike Dever said he is open to hearing more about the proposal. He said the request for a tax break has come about likely because the development group overpaid for the piece of property. Now it needs the tax break in order to offer the property at a lease rate that is in line with the market. Dever said he can understand why the public may be hesitant to grant such a request, but he also said the city has to be concerned about whether Olive Garden would seek to build in another location that would be less desirable from a planning standpoint.

“Do we want to force them to the outskirts of the city where land costs may be less right now?” Dever asked. “Or do we want to try to encourage infill development and the revitalization of what should be an important intersection in our community?”

If approved, the restaurant is expected to employ about 75 full- and part-time workers and generate about $5 million in annual sales. Based on current tax rates, the city and county would collect about $125,000 in sales taxes off of those sales, although existing restaurant owners argue the sales would come at the expense of their businesses.

City Commissioner Bob Schumm said he’ll be hard pressed to support a tax break for the project. Schumm — who is a downtown restaurant owner and also is a member of the Lawrence Originals group — said the Iowa Street corridor has been developing fine without tax subsidies. He pointed to the recently completed project to convert the former Food-4-Less grocery into a furniture store and the new Freddy’s Frozen Custard at 23rd and Iowa.

“Logic tells you that site is very likely to get developed all by itself,” Schumm said. “I just don’t see a need to subsidize a national restaurant chain in Lawrence, Kansas. The market certainly is not underserved.”

Broader discussion

The City Commission also likely will be operating short-handed on the issue. City Commissioner Mike Amyx said he plans to recuse himself from the discussion. One of the four lots that is part of the development proposal was owned by his parents before they sold it to MD Management. But Amyx said he does want the commission to have a broader discussion on what the city’s role should be in trying to spur retail development.

“Let’s just call it like it is,” Amyx said. “This is the first time we are starting to look at incentives for retail. In the past we have looked at tax abatements and such for industrial development and big job producers. But this issue of incentives for retail creates a new set of questions.”

Comments

Richard Heckler 2 years, 10 months ago

What in the hell?

No the public school community CANNOT afford more reckless tax dollar decisions from USD 497!

Lawrence needs every business to pay their taxes!

All tax dollar incentives should come from the development industry,real estate industry and the property owners. NOT residential property owners!!!

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Richard Heckler 2 years, 10 months ago

AGAIN!

Forget the tax dollar give away!!

Who does Mission MD Management think they are? These folks are tax dollar moochers.

They like the additional one cent sales tax district idea as well aka back door politics.

I say let MD Management provide the tax incentives from their pockets NOT MINE.

MD Management could say ask $10,000 for the property or ask $500 a month on a lease agreement. MD Management = wrong management.

There are too many eating establishments in Lawrence,Kansas as we speak aka a flooded market.

Let the real estate industry take the hits NOT the taxpayers!!!

The answer is NO WAY Jose'.

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Richard Heckler 2 years, 10 months ago

Forget the tax dollar give away!!

Who does Mission MD Management think they are? These folks are tax dollar moochers.

They like the additional one cent sales tax district idea as well aka back door politics.

I say let MD Management provide the tax incentives from their pockets NOT MINE.

MD Management could say ask $10,000 for the property or ask $500 a month on a lease agreement. MD Management = wrong management.

There are too many eating establishments in Lawrence,Kansas as we speak aka a flooded market.

Let the real estate industry take the hits NOT the taxpayers!!!

The answer is NO WAY Jose'.

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Carol Bowen 2 years, 10 months ago

That corner is prime retail space ready to build. No need for a zoning variance. How does that qualify for neighborhood revitalization?

Everyone talks about attracting people to Lawrence. Why would anyone come for more of the same? Over the years, we assisted so many retail chains, that our local businesses have not been able to survive. If Olive Garden wants to build in Lawrence, fine. That does not mean the city should be involved.

Lawrence's claim to fame is its local businesses. If we support business, it should be the locals. At the very least, we could support them by not assisting their competition. Free enterprise is way out of whack. The landowner should be on his own, too.

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overplayedhistory 2 years, 10 months ago

Can tax incentives work to generate desirable economic elements in your town? Yes Does giving them to a restaurant chain achieve that goal? not really Does giving them to an engineering firm? Probably in most cases If there are enough jobs from such firms, then Olive garden would need no incentive.

There is a fine line between encouraging economic development and acting like a crack whore, wanting more low paying jobs, that are supported by students, dependent on mommy and daddy's degrading economic status.

(Suburbia - Good jobs) years => Ghetto

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Scott Morgan 2 years, 10 months ago

Well, for me at least all this discussion means a trip to OP and Bo Lings for some quality Asian food.

BTW..........whomever suggested Red Lobster serves inferior food ought to think next time they dine in a Lawrence Asian restruant on the verge of going under. The Kaw reference may actually be more true than you think.

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beatrice 2 years, 10 months ago

Should homeowners be given a lower property tax as incentive if they hold a garage sale?

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dragonfly0221 2 years, 10 months ago

Why doesn't the city keep their money and build an indoor park? They could employ peolpe to build it, maintain it and rent it out to private parties?

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2002 2 years, 10 months ago

Financial incentives? Don't be stupid Lawrence. If there is a market, then the food will pay incentive. If there isn't a market then they will die. Don't wast incentive money on restaurants, spend it on real jobs.

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Ron Holzwarth 2 years, 10 months ago

I'm all for a property tax break on one condition, and that is upon showing proper identification as a Lawrence resident, you get 25% off because you paid for part of the restaurant's business expenses.

And, that would need to be permanent.

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beaujackson 2 years, 10 months ago

Lawrence city commissioners can save taxpayers $18,000.000.00 by canceling the poorly planned library expansion and parking fiasco.

This boondoggle will be outdated before it's completed by I-Pads & Kindles, etc..

Rent a couple of empty buildings in West & South Lawrence for Satellite libraries and save $15,000,000.00.

PS - Say NO to tax breaks for any chain restaurant.

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bigt 2 years, 10 months ago

That is the reason I drive to Olathe to eat out because of all the places that are in town are either Pizza , mexican or crappy bbq. They need a good italian resteraunt in town. We pay for everything elsein this town what is the difference now.

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Barry Watts 2 years, 10 months ago

We have to stop giving money to those corporate thugs... after all, they are just going to go out and hire people who don't have jobs!

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alor 2 years, 10 months ago

I'm tired of driving past that corner and seeing empty lots and businesses closed. It's time for something to go in there. Olive Garden? Okay. Of course, you know you won't be able to get a table for a couple of years, but that's okay too.

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Sherry Warren 2 years, 10 months ago

Ugh. Please no more uninspired sysco food on the south side. And for some reason many people are perfectly happy with mediocre food as long as there is tons of it.

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InfamousAngel 2 years, 10 months ago

A) I'd rather have Cheddars! Please come to the West side =) B) This stupid fear of "the big business taking out little business" is retarded. I mean really. This town is nearing 100k people, its growing at a fairly decent rate. The close-minded people here need to open up and realize that all business is good business. People that like places like Olive Garden often go out of town and spend their money in Topeka and KC. Why not have it spent here? I've tried quite a few of these so called unique mom and pop restaurants. Some are good and the rest are the reason I drive out of town and spend my money there. C) I really don't get the argument of "Chain restaurants will be the end of local ones". I've lived in many different towns in many different states and guess what! There's plenty of both. The only reason they would fear the chain places is because they know they really aren't all that good. I guarantee I'd still go to Genovese and Tellers. D) Whats wrong with Olathe? Personally I'd like it if Lawrence was a lot more like OP. At least then I would have to drive 45 mins all the time to get to places I like....

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Armen Kurdian 2 years, 10 months ago

In certain situations, tax incentives are a good idea. But in a city that is stuffed with all kinds of restaurants and places to eat, to give tax breaks to a third-rate restaurant chain that wouldn't know good Italian food if it hit them in the face, that's just nuts. BTW, I'm a huge free market guy and hate taxes. OG does not need a tax break. Lawrence doesn't need OG.

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blindrabbit 2 years, 10 months ago

Surefire winners for Lawrence; if I was no so old, I'd give em a try! An authentic Chicken House, a la Strouds, Brookfield, Mary's or Annie's. Also, a good real diner a la East and West coasts and many other college towns. Nuff said!

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geekin_topekan 2 years, 10 months ago

Tax pass for the King of all Burritos!

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blindrabbit 2 years, 10 months ago

Forget The Olive Garden! Lawrence is probably too small, but what about a Buca di Beppo! More realistic Italian food and good fun!!

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nativeson 2 years, 10 months ago

Mr. Schumm continues to take a position that is somewhat ironic given the benefits his business received in downtown Lawrence. His establishment benefits from public funding for parking, landscaping and sidewalk maintenance all funded from the City of Lawrence.

The corner of 27th and Iowa has been an eyesoar for decades. The request wil require property taxes to continue being paid at their current level, but to have a portion abated for a time period on the value added to the property. If the City is serious about infill development to help retail update in areas outside of downtown, they need to consider this request closely.

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handley 2 years, 10 months ago

The question is how many other chain restaurants has Lawrence given tax breaks to. I don't know why tax payers should give large corporations tax breaks we don't get any.Anything that comes up we have to pay thru the nose for.

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irvan moore 2 years, 10 months ago

i am against the tax abatement but i think mr. schumm is incorrect about the market not being underserved. we need a place with good plain real food. not mexican, not asian, not burgers or ribs, not sub sandwiches, Furrs type or some simillar buffett type would be great.

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George Lippencott 2 years, 10 months ago

Many generalities.

Anybody got any real rational that new jobs will be created as opposed to job transfers.

Any good reason to give this group more money and not all the other restaurants (businesses) struggling in Lawrence already. How about we not tax businesses and really hammer the rest of us.

Where does this stop? Having started down the path now everybody with a notion of a job wants a subsidy. Natural consequence of assuming that government is directly responsible for jobs as opposed to responsible to create a climate attractive to jobs.

It is amazing how people who believe in government as the solution can be seduced into giving money to the very entity that in another blog they are arguing is immoral and degenerate.

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Clark Coan 2 years, 10 months ago

Unfortunately, the the quality of the food in Lawrence restaurants is mediocre compared with those in Chicago. However, the food here is 100% better than what it was 25 years ago.

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beatrice 2 years, 10 months ago

Making money from paying customers should be all the financial incentive needed, and certainly the only incentive given.

Unless they move the Olive Garden to an under-populated section of rural Kansas. Then, they get a tax break. Brownback said so.

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overplayedhistory 2 years, 10 months ago

715 The burger stand Thia Siam That Italian place in the Phillips 66 Wa Yokohama Zen Zero India palace Anglers Aladin's or what ever it is called now The Mediterranean grocery and Deli
Tellers Pachamamas Tortas Jalisco la Parria
Johnny's, Rudy's and Keno's pizza (yes Keno's has good pizza again) Free state Brewery Wheatfields King Buffet (yeah I said it) Cafe Beautiful Flory's Sausage biscuit at farmers market An equal number of other places that don't suck. There is a need for Ethiopian food. Now to quote Doug From Weeds " now tell me that does not kick your olive garden's spinach artichoke dip's arse" I mean what the H@!! do you want from a town this size. Middle aged or not you can not beat it for a population this small. The twenty years I have been here it has only gotten better and continues to do so Feel free to add some that I have left out. Love to try it out

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fanofKU 2 years, 10 months ago

Olive Garden would be a great restaurant for Lawrence. Right now we are surrounded by some very good sports bars, but music is so loud you can't carry on a conversation. And their are more Asian restaurants than I care to count. As middle age and older, there are very few restaurants in Lawrence. We keep wondering why Lawrence business is going to Topeka or Kansas City, give us a few more options.

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Kontum1972 2 years, 10 months ago

popeyes and olive garden...what about ......sweetpea?

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omnedon 2 years, 10 months ago

“Logic tells you that site is very likely to get developed all by itself,”

I worked for a restaurant, National chain - not locally owned - sorry, that looked at this site 10 years ago as a new location while the Mazzio's building was still there. They decided against pursuing it at that time, and it has remained undeveloped since. It's not going to develop all by itself, but granting a tax abatement, rebate or whatever should not be necessary for a national chain who has much deeper pockets than a local business. That being said, what is it really going to take to get it developed? Wishful thinking just aint gonna cut it.

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overplayedhistory 2 years, 10 months ago

Rated one of nine best small towns for food in America. Whether it is true or not lets work that angle for more Jobs, It is already working and we are not required to give out blow ^%$^$

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Kontum1972 2 years, 10 months ago

mmm...popeyes would be awesome

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nugget 2 years, 10 months ago

Ah, yes. That old corporate trick. Build next to the local guys (Paisano's ... whose food I don't care for either, but at least the money stays in state) and run them out of business. Just what this town needs, another cookie cutter fast food chain. Won't be eating there.

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WilburM 2 years, 10 months ago

Give them twice the tax breaks that Paisano's and Genovese got. No, make that 10 times the tax breaks. They'll come then, right?

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true_patriot 2 years, 10 months ago

NO MORE CORPORATE WELFARE.

We are in a budget crisis. We have to put a moratorium on these never-ending requests for corporate welfare. Even with this particular variation on incentives, now is not a good time to be giving away our tax dollars to a corporate chain which siphons money out of the local economy. If we are going to do private sector welfare, let's offer it a locally owned business and then only if it makes sound business and fiscal judgement.

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srbutl 2 years, 10 months ago

Hello, my name is Steve Butland, my wife Debra and I own and operate Paisano's Ristorante at 25th & Iowa in Lawrence. First, I apologize to any individuals who have commented about a poor experience at our restaurant, and hope you give us the opportunity to redeem ourselves. Paisano's has been in Lawrence since 1994, we have been loyal to Lawrence, but more importantly, Lawrence has been loyal to us. Our interest in this development, in the spirit of transparency, is obvious. If Olive Garden is to build in Lawrence so be it...thats what free enterprise is all about....but lets not bail out a develper, who bought property right before the real estate bubble burst, and now wants to recoup those expenses, on the back of many small business owners. Don't put us in the ring with Goliath, tie one arm behind our back, and expect a fair fight...let Olive Garden build in Lawrence without tax abatements, I think they can afford it.

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Sara Garlick 2 years, 10 months ago

This town doesn't need more restaurants.

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Erin Graham 2 years, 10 months ago

TWO blocks from Paisano's???? I've been hoping for an Olive Garden in Lawrence for a LONG time.. but not so close to Paisano's. (Even though Paisano's is closer to italian-italian... and OG is pseudo-italian) Put it in a different part of town.

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oletimer 2 years, 10 months ago

I can't wait to see how the city and the whiners will screw this up like all the other business ventures that have been turned down in Lawrence. Lawrence states they want business, but then do everything in their power to send them packing. You can't have it both ways.

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LivedinLawrence4Life 2 years, 10 months ago

I'm all for it only if they give the same break to every Lawrence building owner who remodels in the future.

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gccs14r 2 years, 10 months ago

QuikTrip would fit in that location. They wouldn't need a tax break, either.

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LadyJ 2 years, 10 months ago

They are not asking for just tax breaks from the city, but also the school district, and to that I say definitely no. Olive Garden wants their new restaurant at the expense of kids education. How can we close schools then turn around and tell businesses they don't have to pay taxes rightfully owed to the school district. I will be seriously disappointed in our newly elected school board members if they ok this deal. Mt Oread Hotel should never have been given a pass on school taxes, let's not repeat this mistake. Does Olive Garden really want to come off as anti-children? Maybe it is a conspiracy to keep kids uneducated so they can hire them cheap when they can't get better jobs. They should hope this doesn't hit nation news websites. I can see it now "Olive Garden hates kids"

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ljwhirled 2 years, 10 months ago

Don't take this the wrong way, but I don't think the quality of the jobs should be an issue.

Unemployment by education FY 2010 1.9% Ph.D. 2.4% Professional Degree 4.0% Master's Degree 5.4% Bachelor's Degree 7.0% Associate Degree 10.3% High School Diploma 14.9% High School Drop Out Source National Bureau of Labor Statistics: http://www.bls.gov/emp/ep_chart_001.htm

The uneducated have been disproportionately effected by the economic downturn. As we talk about economic development, lets keep in mind that many of the unemployed have little or no job skills. Wait staff, cooks, dish washers and hostesses need jobs too.

Instead of providing a targeted tax break to a single business, how about an incremental property tax holiday for all businesses in the community?

1/2 of the incremental property tax increase generated by any improvements done in 2011-2012 to a Lawrence business would be paid back to the business owner for 10 years.

This way all businesses in Lawrence have an incentive to invest in improvements this year. The City gets 1/2 of the new tax revenue generated by the improvements and the developer gets 1/2. The break would apply to ALL businesses.

Something like that might get the business community building this year, increase revenues for the City and save businesses on the property tax portion of their expansion.

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LadyJ 2 years, 10 months ago

Um, I'm looking to move to Lawrence and buying an old house that needs fixing up.How about if I buy it and have it fixed it up, and the property tax stays the same for 20 yrs. In exchange I will provide jobs for a lot of people to work on it and keep it clean. I will spend money in Lawrence thus increasing your sales tax numbers not to mention the money that the people I hire will spend here. It will certainly revitalize the neighborhood. If I cannot get this deal I will not buy a house in your town.

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average 2 years, 10 months ago

Grant this one and there won't be a single new thing in this town; greenfield, infill, or rehab; that won't put their little extorting mitts out for the exact same deal. And, under the logic of the deal (jerbs!), they'll deserve it. And in 20 years, Olive Garden will want to move and demand the same deal at a new location.

This is what we've come to. Any town that doesn't give away the farm time and time and time again for big corporations is labeled 'business-unfriendly'. Personally, I'd rather be called 'unfriendly' than be another on-our-knees corporate-begging town like ten thousand others.

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jrswift 2 years, 10 months ago

Yeah, could care less. Better Italian restaurants already in this town. Just a "nice" place for the usual suspects to go have a meal. I'm with the guy that says "Hooters." At least the scenery might be good.

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oneeye_wilbur 2 years, 10 months ago

But the bigger question is: Will it make a good chinese restaurant or another mexican restaurant when it closes? What about Genovese, will they complain? After all, this city commission is all about Protecting! downtown.

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alfie 2 years, 10 months ago

WHAT"S next?? The grocery store at 23 and Naismith, or where the Burger King is going to Bauer Farm.

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deec 2 years, 10 months ago

It doesn't seem difficult to me. They anticipate revenue of 5 million/year. If they want that 5 million, they can pay their own development costs and full taxes on the improved property. Why should taxpayers subsidize low-paying jobs and corporate profits?

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Steve Jacob 2 years, 10 months ago

"Let's save the the tax breaks for companies that bring in real jobs"

It's 2011, not 2007. Any job is needed in this town. I don't like giving tax breaks to chains, but do we want that spot to be empty for years more? And I am sure hundreds of Lawrence residents drive to Topeka/KC just to eat at O.G. during the year, do we want to keep them in town?

Just saying, tough issue, pick your poison.

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clovis_sangrail 2 years, 10 months ago

The article states "If approved, the restaurant is expected to employ about 75 full- and part-time workers . . . "

That would be three jobs that pay a decent salary (manager, assistant manager, and chef) and 72 jobs that are either minimum wage or tipped employees.

Let's save the the tax breaks for companies that bring in real jobs.

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just_another_bozo_on_this_bus 2 years, 10 months ago

“Do we want to force them to the outskirts of the city where land costs may be less right now?” Dever asked. “Or do we want to try to encourage infill development and the revitalization of what should be an important intersection in our community?”

You're a commissioner, Dever. If you don't want development at the outskirts of the city, it's your job to say "no." It's not your job to give tax breaks to a bland restaurant that will give them a competitive advantage over all the other similarly bland restaurants.

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The_Original_Bob 2 years, 10 months ago

Never. If I wanted bland, boring Italian food, I'd just goto Fazzios. And if people are in favor of tax breaks to eat bread sticks, well, then, um, this nation may be a little more messed up than I have ignored.

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grammaddy 2 years, 10 months ago

No tax breaks for national chains. That's just crazy.

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notanota 2 years, 10 months ago

If it's "absolutely essential" that they get to charge a sneaky tax to finance their own development, it's absolutely essential that I frequent the Italian places we already have in this city.

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aha 2 years, 10 months ago

i'd eat there every frickin' day. :)

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Norma Jeane Baker 2 years, 10 months ago

Or, the city, county and school district could say 'no' and continue to have an eyesore vacant lot and no new jobs. They would collect absolutely zero sales tax dollars by saying 'no', as well.

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LJ Whirled 2 years, 10 months ago

It is absolutely NUTS to consider giving a big tax break to a giant corporation to have them come in with their generic chain restaurant to hammer away at the locally-owned restaurants who will have to pitch in on the property taxes Darden won't have to pay.

NUTS!

Are you kidding? This is something Lawrence would even think of doing?

Sheesh!

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RogueThrill 2 years, 10 months ago

The ultimate in white trash cuisine.

Next up, Furrs.

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deec 2 years, 10 months ago

If they are going to make 5 mil a year, they can pay for their own development!

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Lene 2 years, 10 months ago

Great! Hope it all works out!

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Dolph4 2 years, 10 months ago

Awesome!! I love the breadsticks. This is definitely a positive for fine dining in Lawrence.

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