A $2 million project to relocate a Lawrence architecture firm into a new downtown office building is worth a property tax break, a city advisory board decided Tuesday.
Leaders with Treanor Architects told the city’s Public Incentives Review Committee that it needs a series of tax rebates to justify its plans to renovate the long-vacant building at 1040 Vt. to house the firm’s 57 Lawrence employees.
“In the process of moving downtown, we will incur moving costs, and we’ll probably see our rent double,” said Bill Fleming, an attorney for Treanor. “Our sales have not doubled in recent years. This will be a significant investment for us to move downtown.”
The city’s advisory board unanimously agreed to recommend that city commissioners approve a proposal to rebate a portion of the new property taxes that will be generated by the project.
Treanor leaders are asking the city to use the Neighborhood Revitalization Act to provide a property tax rebate. Under the plan, the development would continue to pay all the property taxes currently levied on the property. But it would receive a rebate on a portion of the property taxes levied on the new improvements at the property.
The project would receive a 95 percent rebate of the new taxes from 2012-2015; 85 percent from 2016-2017; 70 percent in 2018; 50 percent in 2019; 30 percent in 2020; and 20 percent in 2021. The project would not receive any rebate following 2021.
Treanor plans to do a complete renovation to the existing building and add a second story. The city advisory board agreed with city staff that the project represented a good opportunity to revitalize a building that has been vacant for about a decade.
“This is downtown where we have tried to focus a lot of our efforts to maintain our vibrancy,” City Manager David Corliss said. “We have a chance to add almost 60 employees to downtown, and we don’t get many opportunities to do that.”
Currently the employees are housed in offices on West Sixth Street and on McDonald Drive.
Members of the Public Incentives Review Committee, though, did recommend putting in language to the city’s policy that makes it clear not every new project in downtown will qualify for the tax rebates. The committee is recommending that any project receiving the rebates show that the local governments are receiving at least $1.25 in benefits for every $1 of property tax that is rebated. The city is estimating that local governments are receiving anywhere from $2.09 to $3.71 per each dollar rebated as part of this project.
The city, the county and the school board all will have to approve the plan. The city will have the first hearing on the project at next Tuesday’s City Commission meeting.
City commissioners also will be asked to make some parking accommodations for the project. Treanor wants to be able to purchase 50 parking passes from the city that would allow employees to park in the adjacent city-owned parking lot. But currently the parking lot is for two-hour parking. The city is proposing to change the lot to a 10-hour lot. The city is hosting a public meeting at 5 p.m. today at City Hall to discuss the issue with nearby businesses.
If the project receives all its necessary approvals, Treanor hopes to start the project by May 1, Fleming said.