News and notes from around town:
• Are those breadsticks I smell? I’m not sure, but there are signs that plans for an Olive Garden at 27th and Iowa streets may be re-emerging. We reported in July that several sources had told us that a plan to locate an Olive Garden at the northeast corner of 27th and Iowa streets may move forward even without a package of proposed property tax rebates. Now, we can report that officials with Kansas City-based MD Management have filed plans for a rezoning and a preliminary plat at the intersection. The filings would be among the first steps needed for an Olive Garden to locate on the site, but the plans don’t mention any specific tenants. If you remember, MD Management previously had asked for tax rebates as part of the Neighborhood Revitalization Act to make the site more financially feasible for Olive Garden and other tenants. (The development will include two smaller buildings for other restaurants or retailers that have not been identified.) The city’s Public Incentives Review Committee recommended denial of the request. Technically, the incentive proposal never has had a hearing by the Lawrence City Commission, but the PIRC denial kind of put the writing on the wall. Both Mayor Aron Cromwell and City Commissioner Bob Schumm are on PIRC, and both voted against the incentives — saying they would create an unlevel playing field for other restaurants and that they were uncertain how much new money the restaurant would bring into the community. Either Cromwell or Schumm would have to change their minds on the subject for the incentive proposal to have a chance at the City Commission level. That’s because City Commissioner Mike Amyx has said he won’t vote on the issue, because his mother owns property in that area that would be bought by the development group if the deal moves forward. There are no signs that either Cromwell or Schumm have changed their minds about the property tax rebates. Instead, what sources told me in July is that the development group was looking at applying for some federal tax credits that could help make the project pencil out. A local attorney for the development group did not return a phone call seeking comment late Wednesday afternoon. The rezoning and plat are scheduled to be heard by the Lawrence-Douglas County Planning Commission in November.
• One project we don’t have to keep guessing about anymore is Jos. A. Bank’s entry into Downtown Lawrence. The menswear retailer has installed its signs proclaiming that a Jos. A. Bank factory store will open at the northwest corner of the intersection at the former Talbots location. Jos. A. Bank plans to open on Sept. 30. I got that piece of information from the highest levels within Jos. A. Bank. After weeks of telling you about Jos. A. Bank, a company official recently put me in contact with the president and CEO of the entire retail chain, Neal Black. He told me that the company has had its sights on Lawrence for a number of years, but always determined that the community was too small for a traditional Jos. A. Bank store. That’s still true, he said. But the company believes its factory stores may work in smaller markets. It is testing the concept in Lawrence and few other smaller markets. Black said that unlike the traditional Jos. A. Bank locations, the factory stores won’t use the strategy of putting certain items on sale to attract customers. Instead, the factory stores use an everyday low price type of strategy. The factory stores do carry some close-out items from Jos. A. Bank’s traditional stores, but he said the majority of merchandise at the site will be a special line of clothing made for the factory stores. Black said that line is made with the same quality as the company’s standard line, but often uses less “luxurious fabrics.”
But don’t kid yourself, there’s luxury to be had. As I mentioned the last time I wrote about the store, its factory locations have been advertising a blue seersucker suit for less than $120. If that doesn’t say luxury, I don’t know what does. And yes, I did chicken out. I went in with a plan of asking the president of the company what type of tie would go well with blue seersucker. Instead, I asked him how business has been holding up through the recession. He said sales have been strong and the company may be picking up market share as a result of the downturn.
“We’re offering a lot for the dollar and that is why we are winning right now,” Black said.
In fact, the company has had a hard time finding enough available space in outlet malls to locate their factory stores. That’s, in part, why the company is pursuing the strategy of placing factory stores in areas like Downtown Lawrence. Black believes the store has a chance to become a destination type of retailer for Downtown Lawrence.
“It will have a full assortment of menswear products,” Black said. “We tell people everything from formal wear to underwear.”
• Every time you turn around these days, you’re hearing how now is a great time to buy a house with interest rates often in the high 3 percent range. If that is so, what would you think if interest rates were below 2 percent? Well, they are, if you are the city of Lawrence. The city earlier this week completed its latest bond and note sale to fund projects — everything from library design to street work — that has been previously approved. The city received an interest rate of about 1.9 percent on $4.2 million worth of bonds that have a 12-year term. The city received an interest rate of 0.39 percent on about $14 million worth of short-term notes. (Think of them like construction financing. It is money to get a project started and then once costs are more firmly established, the debt is converted into a longer-term loan.) Ed Mullins, the city’s finance director, said he doesn’t remember ever receiving rates any lower than these in his more than two decades in the business. It will be interesting to see if the low cots of borrowing is brought up as reason why the city ought to pursue a new recreation center in West Lawrence.
• One of the reasons the city was able to get the rates that it did is because Moody’s, the Wall Street ratings agency, recently re-affirmed the city’s credit rating. The city continues to have an Aa1 rating, which is the second-highest bond rating a community can achieve. Representatives from Moody’s toured the city, in addition to scouring its books. City Manager David Corliss said the city’s fund balances — basically its version of a savings account — was highlighted as a reason the community maintained its high bond rating. The city’s general fund balance account — which stands at about $12 million — has become a topic of discussion as city commissioners have considered dipping into it to fund projects that they have not been able to fit into the budget without raising taxes. Corliss has urged caution on that front.
As part of its recent borrowing, the city also has taken a look at its total debt. The city has several guidelines on how much debt it can comfortably issue. At the moment it is below all of those guidelines, but there are a couple that are close to being met or exceeded. In particular, one guideline suggest that the city not allow its general obligation debt levels to rise above $1,100 for every man, woman and child in the city. So where are we at now? With this latest round of borrowing, every man, woman and child is now responsible for $1,015 worth of debt. (This is kind of like the news I get from my wife after she returns home from the mall.) Based on the latest population numbers from the Census, every $1 million in debt adds about $11.40 to that per capita total. So with the magic of math, that means the city could add another $7.4 million to its debt total and still stay within the guidelines.
But that brings up a question. The city has committed to an $18 million expansion at the Lawrence Public Library. That will be funded with general obligation debt. Now, the city is paying off debt all the time, so the numbers are a moving target. But I’m not sure the city will pay off so much debt that it will be able to add that $18 million onto its total and still stay below this self-imposed guideline. It is something I will try to find out more about and let you know. Now, if I can just muster up the courage to ask my wife about what new debt she has planned.