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Letters to the Editor

No tax break

June 18, 2011

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To the editor:

In view of the American Eagle Outfitter debacle, the “living wage” and debate, which has lessened over the intervening years, the powers-that-be are now considering a tax abatement for a restaurant.

A few questions: Is there a shortage of eating establishments in Lawrence? Does the proposed restaurant offer much in the way of high end employment, or does it provide some employment for the transient college population that cycle through the watering holes in town? Are current businesses, including current Mediterranean restaurants, going to be required to subsidize the abatement through increased property taxes (whether paid to city or landlord)?

Lawrence has sufficient restaurants including some that serve Mediterranean fare. Hardly a justification for a tax abatement.

Comments

Abdu Omar 3 years, 6 months ago

If this were a local businessman trying to open a viable business in an area where there are few restaurants, I could agree on the tax abatement. But it is like sending money to the oil companies who are socking it to the consumer. We pay close to $4.00 a gallon and then they get subsidies beside. Sounds wrong to me. Let Olive Garden into town and let them pay their fair share of taxes, just like everyone else and keep the playing field level. They will be busy for sure as everyone likes their brand, but it isn't fair to anyone else.

Jimo 3 years, 6 months ago

  1. Would a tax deal solve a particularly difficult problem in the city, such as filling a long vacant eyesore building?
  2. Would a tax deal bring a significant number of high value (often high wage) jobs to the city?

If neither is a yes, then the answer is no.

somebodynew 3 years, 6 months ago

Qestions for LJW:

Why do the headlines keep saying Olive Garden, when it is actually MD Investments that will make the money off of this. If what MD is saying that they will charge OG "market rate", OG isn't getting the money (other than they would be charged over the market rate w/o this deal - and that just sounds stupid to do).

WHO is MD Investments (or whatever there name is)???? I guess it really doesn't matter as I don't believe we should bail them out for a bad investiment, but it would be nice to know the names of the players here. Is this some of the same crowd we are accustomed to hearing from hiding behind a new corporate name; are this out-of towners who have never asked for any other breaks here; is Mike Amyx part of this group (hence the recusing of himself) ??? Yes, I am skeptically (even tho I like Mike) that just because his parents once owned that land and sold it, that alone creates a conflict. Especially since he and Schumm can vote on every issue downtown, when they are downtown business owners. Oh well, that is another topic.

I feel these are legitimate questions we should be aware of instead of all the hype over OG and whether it is a good restaurant or not.

Fred Mertz 3 years, 6 months ago

I understand where you are coming from and mostly agree, but Olive Garden does indeed benefit from this too. Obviously this is the location they want and they will get it at market price if the developer gets the tax rebate, otherwise the developer (if you believe them) will have to charge them a higher lease rate.

jafs 3 years, 6 months ago

But why would OG agree to pay higher than market rents when they could just locate elsewhere and pay market rates?

I would expect them to simply not choose to locate there if the subsidies aren't approved.

Fred Mertz 3 years, 6 months ago

They might very well not move there and either select another location or not locate to lawrence, but it the location that they have determined best suits their needs. Thus, if they can get it at the right price because of the tax rebate then they too are benefiting.

Yes, the developer has the most to gain, but there is still an indirect albeit lesser benefit to O G in my opinion.

Think about it this way. You want a Toyota, but the price is too high so you will buy a Honda (your second choice). The dealer says wait, I think I can get a rebate and I'll pass it onto you so the price will be lower. At the rebated price you're able to buy your first choice in a car. The dealer got the rebate, but didn't you benefit too?

jafs 3 years, 6 months ago

If it's a substantially more attractive location for them, then you're probably right.

I have no idea if that's the case though.

Fred Mertz 3 years, 6 months ago

I think we could debate the dubious merits of the tax rebate for the developer all day, but one imprortant question to be answered before we delve into that discussion is if the tax rebate is legal under the act?

I have reviewed it and others have also commented that giving the developer a tax rebate under the act would not meet the standards set forth in it.

So, regardless of whether or not it is a good idea, if it is not legal then it shouldn't be done.

jhawkinsf 3 years, 6 months ago

Whether or not it's Olive Garden or MD Developers, the question is will the city be taking some of their money in the form of taxes or will they be taking some more of their money if the property is improved. But the city isn't giving them anything. They're taking.

Richard Heckler 3 years, 6 months ago

MD development bought the land to make a nice size profit. That is the same reason the sellers sold the land to the developers. All parties made an exciting $$$$$$$$ decision for themselves.

None of the parties approached the taxpayers about the sale in fact I would guess 99.95% of taxpayers knew nothing of the transaction. Therefore taxpayers assume no responsibility for insuring MD development a very sweet profit on their investment.

MD Development will make a nice profit no matter what so let them make OG a deal that OG cannot turn down.

Nothing about this real estate venture is my responsibility nor is it the responsibility of city/county government no matter how politicians spin the matter.

This entire real estate venture is the sole responsibility of MD Development not the taxpayers Preferential treatment only gives a leg up to a new establishment over like establishments. That is business unfriendly to existing establishments across the board.

jhawkinsf 3 years, 6 months ago

"Nothing about this real estate venture is my responsibility nor is it the responsibility of city/county government".
But if this venture did in fact produce a large profit, would you still say that it's none of the city/county's business? Or would you say that having made a larger profit, the government's share needs to be increased through increased taxes?

bornon7 3 years, 6 months ago

How do we find out who MD Development is? Mike Dever? Just kidding.....?

deec 3 years, 6 months ago

There's an MD Development in Manhattan, but I don't know if it is the same one.

average 3 years, 6 months ago

You have to admit that the location is pretty ugly.

Of course, that blight is the responsibility of MD Development. We're supposed to give them a taxpayer windfall to reward them for maintaining a blighted property on a major city street?

Scott Morgan 3 years, 6 months ago

Off topic a bit, but here she goes. Since moving to Lawrence many moons ago there has been a feeling, not overt, but a underlying whisper. The feeling is this is the way it should be and screw the rest of you.

Hey, we have an Italian place it should be good enough. Hey we have a route through town, I ride a bike (or T), it should be good enough. Hey, I live in a 600 sq. foot apartment without A/C this should be good enough for everybody. Hey we have a lake who cares if people with disabilities can't use it. Hey I don't have to sit for 30 minutes of precious family time on 31st so who cares.

I hope it's not this undertone. Hey, I hate my measly existence. I do not entertain out of town guests, I do not count shopping as an activity. I actually do not own property, nor pay taxes, so screw all of you who do. I will vote status quo because I like things just the way they are.

Some of us would love to ride a bike, pay no taxes, use the T, to help cut down cost of living. We can't. Some of us are very concerned about our huge drop in home value investments and count on some of this for retirement. Some of us care about people stuck in stupid a@2 traffic jams when we know the problem could be solved so easily.

Some of us love to see others succeed. Some of us love to see Lawrence grow and maintain cutting edge. Never eaten at a Olive Garden, but would love to see one on Iowa. Just for the draw and civic pride.

I would love it if a local joint bought the property and had the backing to build a new building on blighted highly visible land. Aint happening, so lets do the next best thing.

gl0ck0wn3r 3 years, 6 months ago

That's not a whisper, that's a shout. You can see it every day here.

average 3 years, 6 months ago

Get over your butthurt.

There aren't more than, guessing, 10% of us who are directly opposed to Olive Garden.

We didn't picket and protest IHOP, 2 Applebees, or any of 50 other chain restaurants in this town. Did we? Do you remember it, cause I sure don't?

However, they all came in and played by the exact same rules as every other chain and every local restaurant in the town.

Yes, the location is a blight. It should be maintained by MD Development. If we cut them a juicy check, that's rewarding being a crappy landlord.

Besides that, who is being "drawn" by a freaking OG? Anyone more than 15 miles east or west of here has one closer to them already. North and south, there just aren't that many people.

jhawkinsf 3 years, 6 months ago

If we cut them a "juicy check", I'll stand on my head and spit wooden nickels. We're talking about taking some of their money or more of their money. The city will be writing no checks, only cashing those that are sent in.

pace 3 years, 6 months ago

I am sorry that you aren't allowed to ride a bike. I hope it isn't for lack of funds to buy a bike you like. Maybe a tax break on it will enable you to buy a bike and then you could feel the civic pride. I have civic pride, it is different than yours, I don't ride a bike, I know a pedestrian, who sometimes takes a bus, but he pays a lot of taxes, so the story about the bikers who don't pay taxes makes absolutely no sense to me. Putting up tax money for a chain cafe to move into a property rather than the property owners to drop the rent to something the market will bear doesn't fill me with civic pride. I feel it when we just manage not to put some local cafe out of business by augmenting the rent of a chain cafe.

Scott Morgan 3 years, 6 months ago

pace, about everything I do, and I do a lot costs more. I physically can not ride a bike due to skeletal problems.

I look at these things pragmatically. Lawrence, great town, could be better with a wonderful state of the art building where now sits blight.

There is a big big big difference between a multi million buck tax generating Olive Garden than one of our small local joints.

Scott Morgan 3 years, 6 months ago

I should add, if by some reason a windfall bike path project came our way through voodoo tax shifts, I'd be proud and happy to support it.

kugrad 3 years, 6 months ago

If Olive Garden wants to build a restaurant, they must feel it would be profitable. Let them pay their taxes. It is folly to grant tax breaks to chain stores owned by larger conglomerates who make millions,if not billions, of dollars in a year. This is no mom and pop affair. They can easily afford the taxes and they should pay them. A lack of tax incentives will not keep them away, it is like giving them a present at the expense of everyone else.

think_about_it 3 years, 6 months ago

They are not going to charge you more to make up racist. They are just not going to charge the new improved property more than they are currently paying for a few years. Get it? Sure you do.

jayhawklawrence 3 years, 6 months ago

To support the kind of sales that Olive Garden will need you will be taking business away from the rest of the food providers. Increasing the supply with a limited demand and you have decreased revenue for somebody.

Personally, I think it is very possible that the other Italian Restaurant nearby would benefit for the same reason that Burger Kings like to be near McDonalds.

We shall see from the decision our community leaders make whether they believe in basic economics and the free market or if they prefer to ignore those rules.

We need businesses that will bring people to Lawrence to shop more but I don't think tax breaks for restaurants is very justified. Why would you want to compete with your own hometown businesses who struggle to survive anyway.

Doesn't make sense to me.

tbaker 3 years, 6 months ago

Yawn. Typical liberal...loves for government to pick winners and losers and is perpetually worried about "giving" (aka letting people keep what they earned) tax breaks to business. Perhaps the author should consider the real issue in Lawrence isn't the type and quantity of restaurants in town, like that is somehow a role for government. Wise up comrade; the real problem is unemployment. Speaking of college age transients, have you seen the unemployment rate among people in this age group? The 16-24 year old unemployment rate is over 53%. That's a post WWII record. Think about that when you fret over city government helping set favorable conditions for private sector business to grow.

In whose hands would the precious tax money do more good? My vote is with the people who earned the money in the first place and create the jobs.

jafs 3 years, 6 months ago

That's funny.

You complain about government "picking winners and losers" and then advocate for the government to help one business at the expense of others.

sulliedotcom 3 years, 6 months ago

I wouldn't be living here if there was no American Eagle. Just sayin'.

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