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Archive for Monday, June 6, 2011

Town Talk: Parks and Rec office to move to South Park; talk of West Lawrence recreation center may heat up; Olive Garden proposal to get City Hall review

June 6, 2011

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News and notes from around town:

• Look for the city’s Parks and Recreation Department to have a new home next summer. City officials have confirmed that they’re planning to move the administrative offices of Parks and Recreation to the small South Park Center in summer 2012. Parks and Recreation currently has its offices in rented space at 10th and New Hampshire streets, above the Pepper Jack Grill restaurant. That lease expires soon, and city officials do not want to renew it. The South Park Center — which is the building in the western portion of South Park — hosts classes and such, but it does not have gym space or other typical recreation center type of uses. City commissioners at their meeting on Tuesday will go out for bid on a $25,000 project to extend new fiber optic cable to the building so that it can support the department’s computer needs. The project also will extend new cable to the nearby Community Building at 11th and Vermont.

• I believe the longer term plan for parks and recreation is still to have office space in a new West Lawrence recreation center. I’m beginning to hear rumblings that the idea of a West Lawrence recreation center is beginning to heat up again. If you remember, parks and recreation leaders have said city-owned property just behind Walmart at Sixth and Wakarusa would work well for a new recreation center. The project would include multiple gyms, a large exercise area and several other features. I think Kansas University basketball coach Bill Self’s foundation is close to committing some significant dollars to a recreation center/wellness center project. Self also may be willing to lend his name and time to some private fundraising for the project. But, even with Self’s significant help, the project largely would be publicly funded. The city has sales tax dollars that it once was using to pay for the city’s Indoor Aquatic Center that are now available since the indoor pool’s debt has been retired. I would expect the idea to come up during the city’s budget process this summer. It will be an interesting discussion to follow. On one hand, you have a chance to leverage public money with private money. On the other hand, the economy is still slow and the available sales tax dollars could be put to use in other parts of the city’s budget. I’ll report back when I hear more specifics about how many dollars we’re talking about.

• Indeed, city officials soon will start formally processing a request for a property tax break to help the Olive Garden locate at 27th and Iowa streets. City commissioners at their Tuesday evening meeting will receive a letter from the development group and ask staff and the city’s Public Incentives Review Committee to make a recommendation on what the city’s role should be in the project. The development company wants to use the Neighborhood Revitalization Act, which would allow the project to receive a rebate on a portion of the new property taxes generated by the development. But the letter doesn’t spell out what the Kansas City area-development company is asking for, such as has how many years it wants to receive a rebate and what percentages of the new taxes it wants rebated. But the letter did include a copy of “concept plan” that shows there would be one other tenant on the site in addition to the Olive Garden. The plan shows the Olive Garden occupying a 7,500 square foot building near the northeast corner of 27th and Iowa. But the plan also shows another 5,100 square feet of space north of the Olive Garden building. Presumably, that space also would be subject to the property tax incentive as well. The plan doesn’t hint at what type of tenant could go into that space.

• Since we started reporting on the Olive Garden deal last week, I’ve heard lots of comments, including a few from inside the development community. One thing I’ve heard is that the property tax break will do a lot more to help the development group — MD Management — than it will Olive Garden. Follow along with this logic: MD Management will use the property tax break to offer Olive Garden a lower lease rate on the project, but the lease rate won’t be below the market rate currently offered in the city. For example (and these numbers are purely made up for illustrative purposes), say that MD without the property tax break would have to charge the Olive Garden $25 per square foot in order to break even or make money on the deal. With the property tax break, they could charge $20 per square foot and still make the deal work. Under that scenario, Olive Garden would be paying a lease rate in line with what the market is charging other new entrants but less than what it would have to pay otherwise at that site. And — I’ve heard argued — Olive Garden wouldn’t have an unfair advantage over other restaurants because it would not be paying a below market-rate lease. You can decide whether that makes sense to you.

But it does seem that this deal comes down to the fact the development group purchased the 27th and Iowa site at a price that is higher than what it is worth in today’s environment. In its letter to city officials, the group acknowledges it bought the property at “the height of the real estate market,” and that it originally was planned to house a neighborhood pharmacy. I’ll be interested to see whether other developers in the community start stepping forward with sites that they can offer Olive Garden that will work without a property tax break. There certainly are several developments in town that are zoned and ready to accommodate a sit-down restaurant. I can think of four off the top of my head — Bauer Farms on the northeast corner of Sixth and Wakarusa, the Walmart outlots on the northwest corner of Sixth and Wakarsua, the Mercato development at Sixth Street and the South Lawrence Trafficway, and the Fairfield Farms development at 23rd and O’Connell.

But, of course, Olive Garden leaders know of those sites too. There’s probably a reason they are most interested in 27th and Iowa. We’ll find out soon enough whether city commissioners agree with it.

Comments

Pywacket 3 years, 6 months ago

Chad~ As an aside, do you happen to know whether Ernie Shaw is still "acting" director or did they ever get around to conferring the title of "director" on him? Fred has been retired for several years now and the last time I saw an article that quoted Ernie on something, he still had the temporary and uneasy-sounding limbo title.

Just curious! I worked for Ernie many, many years ago and he was such a wonderful boss--fair, helpful, positive--and really seemed like an on-the-ball guy. I was glad to see him moving up in the Parks & Rec ranks over the years and fully expected they would honor him with the "director" rank once Fred had retired.

boxers_or_briefs 3 years, 6 months ago

He's still the "interim" director and always will be since he doesn't live in Lawrence anymore.

Chad Lawhorn 3 years, 6 months ago

He is still the interim director. My understanding is that it is related, in part, to a city policy that requires department heads to live inside the city limits. The city manager's office also has told me that it is related to the city's desire not to add another full-time administrative position at the department, given the city's budget situation. Thanks, Chad Lawhorn Journal-World

stuart 3 years, 6 months ago

Oh, I get it now....MD management made a bad business deal and now is looking to the city to bail them out. I think bailouts are a great deal. I hope the city can help everyone that has ever been upside down in a house, a car, boats, motorcycles the list is endless! Lawrence can bail everybody out!

guesswho 3 years, 6 months ago

I don't like the idea of special tax deals, but I guess on some level I wouldn't mind it if those deals are to clean up more blighted spots rather than 'new' development.

just_another_bozo_on_this_bus 3 years, 6 months ago

Favoritism in tax policy will likely lead to more blight, not less.

just_another_bozo_on_this_bus 3 years, 6 months ago

If this tax break is approved, might as well figure on giving a similar tax break to every commercial project in town. But maybe those floodgates were opened with the break given to Treanor or to the Oread.

Regardless, this is a slippery slope that could leave the rest of taxpayers in town paying much higher taxes.

love2fish_ks 3 years, 6 months ago

Another glaring example of the glaring need to revamp the tax code. MD wants to use "Neighborhood Revitalization Act" for property at 27th and Iowa???

The city will not benefit from another resturant chain that takes away from Mom and Pop shops.

Scratching my head bald on "Neighborhood Revitalization Act" for 27th and Iowa

jafs 3 years, 6 months ago

Why exactly should we help folks who bought in at the "height" of the market?

Real estate speculation is just that - speculation.

If they're not willing to take the risks, then they shouldn't get the rewards.

Bud Stagg 3 years, 6 months ago

Oh! Oh! I made a bad business investment, where is my bailout?

I've had several people tell me since I bought my business...if you make the correct decision 50% of the time you will probably succeed. I have made plenty of bad decisions and paid for them with the opportunity to make the right ones at another time. That is business. If you need a bailout, you should get out!

Leasing it at $20 probably only means it will take longer to pay off the investment. They just don't want to take the "risk" they want the taxpayer to take it. That is not what government should do, that is why they are a developer, it's all about risk.

just_another_bozo_on_this_bus 3 years, 6 months ago

Welcome to Republican world, 21st century style, where profits are privatized, and losses are socialized. (and sadly, Democrats have settled in to playing the same game.)

guess_again 3 years, 6 months ago

I have some sympathy for Bozo's views sometimes....but then I remember he is costing our citizens $200 million or so on his small group's anti-SLT rants and lawsuits.

To his rant above, I would suggest he has "socialized" 200 million dollars of cost increases to Lawrence taxpayers...and guess what, I bet he still denies it in a post here, and calls me a racist or some other name.

just_another_bozo_on_this_bus 3 years, 6 months ago

Your logic is specious, at best. But temper tantrums such as yours are very rarely based in logic, and your desire to spend $200 million for five minutes of convenience indicates that logic is not your strong suit.

As to whether you're a racist or not, all I can say is that when it comes to respecting the property, culture and history of Native Americans and Haskell, you prefer to satisfy your very narrow personal interest. Is such blatant disrespect racist? I guess for you it's not as long as it's done in the pursuit of satisfying your childish selfishness.

Keith 3 years, 6 months ago

"On the other hand, the economy is still slow and the available sales tax dollars could be put to use in other parts of the city’s budget."

How about dropping the sales tax rate, the city is always trying to draw retail dollars. Was this sales tax increase sold to the taxpayers as having a sunset when the bonds were paid off? I can't recall. This points out why it's dumb to pass a sales tax increase, they never get rescinded once the original purpose is paid for.

LogicMan 3 years, 6 months ago

The other building: A tiny Red Lobster? We could only be so fortunate.

Dispersant 3 years, 6 months ago

Mmmmmmmmm........Days old, frozen seafood, overloaded with salt! Yum!

Carol Bowen 3 years, 6 months ago

"But it does seem that this deal comes down to the fact the development group purchased the 27th and Iowa site at a price that is higher than what it is worth in today’s environment. In its letter to city officials, the group acknowledges it bought the property at “the height of the real estate market,” and that it originally was planned to house a neighborhood pharmacy."

Tough cookies. Why would the city entertain the idea of bailing out MD while local businesses are closing their doors. We should not be bailing out speculators. And, we should not assist businesses that compete with existing businesses. Let free enterprise work.

The city commission discussion should be under what circumstance is an assist needed, and why would the city be interested? How does it impact the existing community? There just seems to be something fundamentally wrong about subsidizing competition, literally taking sides and disturbing the market balance.

Carol Bowen 3 years, 6 months ago

Should the city really add another recreation center? How does Parks and Rec serve citizens who do not play basketball?

On another note, Lawrence has a fine Parks and Recreation department. So fine, that no other recreation entity can compete. If we redirected our parks effort, is it possible we might bring in a YMCA or a YWCA?

Recreation facilities are expensive to build and expensive to run. Now, this might be an opportunity for a city assist that would actually save money.

jafs 3 years, 6 months ago

I think the point would be that it helps the developer, rather than the restaurant, if the $/sf the restaurant pays is the same as the going rate for that sort of space.

Either way, we shouldn't be helping them, since they speculated on real estate, and that includes risk and reward.

Richard Heckler 3 years, 6 months ago

MD Management is big business think about that for a moment.

I say big business loves welfare because they are always asking for big government handouts. That makes them not Free Market but instead tax dollar moochers.

Do we taxpayers owe any tax dollar favors to big business? Absolutely NOT! So why are MD Management,local big business people and some of our commissioners frequently implying that without OUR TAX DOLLARS people will tell us to go straight to hell?

If big business people cannot stand on their own and/or get financing from a bank perhaps they should get out of business.

Since when did we taxpayers tell our elected officials to risk OUR TAX DOLLARS financing big business deals?

IF our tax dollars are to be put at risk LET WE TAXPAYERS vote on the project(s).

Richard Heckler 3 years, 6 months ago

Does the Free Market except big government assistance aka tax dollar welfare?

Think about it for a moment...

The only business people strangled by the Free Market concept are the small business people aka Mom and Pop enterprises. Where are their mom and pop welfare dollars?

MD Management and Olive Garden are both big business who do not believe in the Free Market system. They have the nerve to be asking taxpayers for welfare in order that they may come in with a "leg up" so to speak over other eating establishments.

No Way Jose'!!!!

AGAIN I say big business loves welfare because they are always asking for big government handouts. That makes them not Free Market but instead tax dollar moochers.

Taxpayers cannot afford developers!

Bud Stagg 3 years, 6 months ago

Let's put it another way. Would you personally invest your money and become partners with MD in buying that property? I certainly would not have purchased that property at the top of the market. Then why should the city become partners with them?

pizzapete 3 years, 6 months ago

I figured this tax deal was probably going to enrich the developer. The city should consider levelling the playing field by letting them over build the corner without parking. The city could build a pedestrian bridge over Iowa so the patrons can park their cars in the lot across the street.

pizzapete 3 years, 6 months ago

Think about it, if they don't have to plan for parking and have the city build the pedestrian bridge, they could have a dance club in the basement, a health club on the first floor, two or three restaurants on the next floor, a law office or architecture firm on the next floor, and the next levels could be $200,000 condos for people who don't like to mow their grass but want to live closer to Iowa st. Sounds like a win, win, to me.

Richard Heckler 3 years, 6 months ago

There are two consequences that usually goes unmentioned by the local media,city hall and elected officials - regional and local profiteers are draining our pocketbooks and raising our taxes.

irvan moore 3 years, 6 months ago

what is the connection or relationship to md management that creates the conflict for mr. amyx?

Chad Lawhorn 3 years, 6 months ago

As we reported, Amyx has said he plans to abstain from the vote because one of the four pieces of property that is part of the development previously was owned by his parents. His parents sold the piece to MD. Thanks, Chad Lawhorn Journal-World

jafs 3 years, 6 months ago

I had a funny thought - if we're going to offer developers the opportunity to pay taxes on less than the market value of their investments if they don't do as well as they'd like, maybe we should charge them taxes on more than the market value if they do well.

We don't hear much about that idea from them - hmmm.

Fred Mertz 3 years, 6 months ago

Other than just spouting off here, what is the best way to engage to prevent this from happening? I am new to Lawrence and city politics here so will there be an opportunity for public comment?

I don't get too fired up about too many issues, but this one just seems wrong on so many levels that I feel compelled to do something other than share my wit, opinion and prose here.

Carol Bowen 3 years, 6 months ago

City commissioners contact information:

http://www.ci.lawrence.ks.us/commissioners

They are really very good about reading their email and responding. If the topic is on a city commission agenda, there will be time for the public to comment. Meetings are on Tuesday evenings.

Fred Mertz 3 years, 6 months ago

Thanks

Will start with an email and then go from there.

jafs 3 years, 6 months ago

Good luck.

Let us know what kind of response you get.

realityplease 3 years, 6 months ago

Does everyone realize that businesses in Kansas pay a little over twice the amount of real estate taxes based on value than residential? With that being said, giving a business a short term tax break pays for itself in the long run. The success of a business is a partnership between the landlord, the business and the city. The city commissioners realize that the payoff in giving these breaks is worth it. Plus think about the additonal taxes we will receive, in the long run, for the property being developed verses it staying as a vacant lot. Empty land is not the money maker in taxes. Developed/Improved properties are.
And these tax breaks are nothing unique to Lawrence. Overland Park does it, Topeka does it, Manhattan does it. If we want to compete for businesses to come to our town, we have to offer incentives. I believe all you naysayers should take a course in Economic Development and realize we really aren't "giving" things away if the business is successful. And sometimes this incentive is the step that needs to be made to help with the success of the building.

Fred Mertz 3 years, 6 months ago

I pulled up the act (at least I think I got the right one) and I don't think it was intended for this purpose. Granted, I just did a quick read and will have to study it more to be sure, but that is my quick assessment. Here is the link. http://lawrenceks.org/web_based_agendas_2006/08-08-06/08-08-06h/ks_neighborhood_revitalization_act.html

My quick read suggests that it was intended for an area instead of an individual business. It doesn't seem like the criteria was a developer making a bad business deal.

As I said, I just quickly skimmed it so if I am wrong simply tell me.

just_another_bozo_on_this_bus 3 years, 6 months ago

"Does everyone realize that businesses in Kansas pay a little over twice the amount of real estate taxes based on value than residential?"

Well, the governor certainly seems hell-bent on essentially eliminating the income tax on corporations and the wealthy. If the real estate taxes collected from businesses are also essentially eliminated (property taxes on machinery, etc., already have been eliminated) exactly where will tax dollars come from? What you are proposing may make sense from a strictly ideological perspective, but unless you're also intending to shut down most functions of state government, what you are proposing makes absolutely no sense.

"Empty land is not the money maker in taxes. Developed/Improved properties are. "

Not if the taxes are largely forgiven, which is what they are requesting. You can't have it both ways.

deec 3 years, 6 months ago

Interesting, a brand new user (June 1) lobbying for this corporate welfare. I wonder if he works for the same PR firm as Dave Whats-His-Face.

jafs 3 years, 6 months ago

Any evidence that previous tax breaks have been a net positive for the city?

I seem to recall a number of tax abatements that included requirements for businesses to create a certain number of jobs, at a certain wage, that the businesses failed to do, and were not held accountable for by our city commissioners, notably Sue Hack, who didn't want to be "too picky".

If the business does well, it might work out for the city, but if it doesn't, ...

Why should we be gambling on their success? That's a risk that businesses and developers should be taking, not taxpayers.

What the city can, and should provide, is well-maintained infrastructure - and perhaps a decent work force, and a customer base. That's all, and it should be enough, and in fact it used to be enough, before businesses realized they could extort more.

alm77 3 years, 6 months ago

Thank you City of Lawrence for moving the Parks and Rec offices to save some money!! :)

  • Just thought this board could use some positivity.

deec 3 years, 6 months ago

Some developer had empty space to fill from the city's coffers?

3 years, 6 months ago

Out of curiosity, how much of that savings will be eaten up by the $25,000 (from the article) required to connect it to the city fiber network?

Richard Heckler 3 years, 6 months ago

Flooded retail markets produce economic displacement NOT economic growth.

Retail operations must pay property taxes and generate sales taxes to be a successful venture for taxpayers. Flooded markets make it difficult for retail to meet its' retail sales tax projections.

If enough taxes are not generated the city cookie jars come up short so city and county hall come looking for you and me for additional tax dollar revenue.

Developing that corner is about sizeable profits for MD Mgm't and Olive Garden not about the welfare of Lawrence, Kansas.

MD Mgm't : Taxpayers are not lending institutions = go to the bank!

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Keep a very close eye on that rec center project? Why should west Lawrence have any better rec center than any other side of town. Keep a close eye on the plan that which will likely be quite extravagant. Don't get subdued by the phrase "Wellness Center". In Lawrence,Kansas that means more tax dollars than necessary will be spent.

The west side rec center sounds like a second round of PLAY in which USD 497 blew $20 million on the first round.

How many times can taxpayers live with getting duped?

John Hamm 3 years, 6 months ago

Since P&R is discussing the "West Side Rec" center again. I wish they'd answer why they let Martin Park fall into such disrepair!

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