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Archive for Wednesday, January 4, 2012

City gives preliminary approval of incentives for new Ninth and New Hampshire building

January 4, 2012

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A deal is a deal, even if it is a few years late.

At least that’s how a majority of Lawrence city commissioners felt Tuesday evening as they gave preliminary approval to make $280,000 in payments to a Lawrence development group that is building a seven-story apartment and office building at the southwest corner of Ninth and New Hampshire streets.

On a 4-1 vote, commissioners agreed to make 10 annual payments of $28,000 to reimburse a development group led by Lawrence businessman Doug Compton for various public improvements — everything from street lights to sidewalks — that were made as part of the apartment/office project.

The incentive request has been lingering at City Hall for more than a year, and it came with a complication: Developers didn’t ask for the incentive until after they already had started construction on the project. That brought questions from the public about why the incentive should be offered.

On Tuesday, city commissioners acknowledged the unusual timing made the request politically difficult.

“Obviously, this would be a lot easier discussion if we were talking about a drawing on a wall, and the question was whether we wanted this project to happen,” City Commissioner Bob Schumm said. “The question then would be whether it is worth $28,000 a year to get a $10 million building? I think that would be a pretty easy decision.”

Not for everyone. Commissioners did hear opposition from a taxpayer advocate who said the deal wasn’t fiscally responsible and from neighbors who currently are fighting another Compton-led project to build a multistory hotel on the southeast corner of Ninth and New Hampshire.

“Right now in this state, and potentially in this country, we’re massively cutting our support for the poor and the elderly, but we’re being asked to provide social support for the rich,” said Town Peterson, who lives east of the project.

Ultimately, commissioners said they were comfortable providing the incentive because they believe a previous City Commission already had set the expectation that new development in the 900 block of New Hampshire would receive public assistance.

In 2000, city commissioners created a Tax Increment Finance District for much of the 900 block of New Hampshire Street. The district entitled the city for the next 20 years to collect much of the county’s and school district’s share of property taxes on any new developments in the district.

The agreement called for the city to use those tax collections to pay for public infrastructure. A $7 million public parking garage was the largest piece of infrastructure, but the city also took out about $900,000 worth of debt to reimburse developers for public infrastructure related to future projects in the block.

But the city expected those projects to be completed by 2005. The fact that this project didn’t come forward until 2010 created a concern for city staff members. After 2005, the city believed future development may not be coming for the block and used the $900,000 to make debt payments on the parking garage.

Commissioners, though, said the city can still afford to provide the incentive because the new building will add about $265,000 a year in taxes to the city’s coffers.

City Commissioner Mike Amyx voted against the incentive because he said city taxpayers already have had to pay more for the parking garage than was anticipated. New taxes from private development were expected to pay for about half of the $7 million garage. The taxes from new development, however, have paid less than $100,000 a year on the project, city officials estimated.

“It is hard for me to say we’re going to grant this request knowing that we’re still going to have to come up with money to pay for the parking garage,” Amyx said.

Commissioners will finalize the incentive deal in the coming weeks when staff members produce a formal agreement for developers to sign.

Comments

budman 2 years, 11 months ago

I don't really care for the tax incentives but the building does look pretty good. It molds into the older architecture of downtown a lot better than other recent developments like whats across from freestate and liberty hall.

Bob Forer 2 years, 11 months ago

to the spineless fools who pollute the Lawrence City Commission: Every .last one of you lost my vote for re-election.

Bob Forer 2 years, 11 months ago

I was referring to the four who voted in favor. My bad, as I didn't make that very clear in my post. As for Mike, I will vigorously campaign for his re-election.

someguy 2 years, 11 months ago

Finally, we have elected officials who are willing to do what's right for the rich. I think it is ridiculous to expect developers to invest their own money when public money is available.

CLARKKENT 2 years, 11 months ago

THEY MUST ALL BE REPUBLICANS!!!!!!!!![SMILE]

texburgh 2 years, 11 months ago

Compton once again bilking the city for help on his projects that will make him millions of dollars. I have no desire to pay Compton with my tax dollars so he can increase his fortune. This is welfare for the rich. If he wants to build, then the associated costs should be born by him, not me, not any other taxpayer in Lawrence. And who's going to be paying the taxes that Compton isn't paying? That's right - you and me.

jafs 2 years, 11 months ago

What an obviously horrible idea this was.

20 years of lost county and school district tax revenue, new taxes that were expected to generate $3.5 million generating about $1 million instead, the city stuck making massive debt payments on the garage, and a time frame expected to end in 2005 being extended until 2011.

You'd think they might notice all of these problems, and not create any more TIF's in the future, but that would make too much sense.

jayhawkinsf 2 years, 11 months ago

The 3.5 million vs. 1 million is only accurate if you assume the project would be built even if the incentives were not there. But what would the numbers be if the project did not go forward, if the developers took their 10 million and did something else with it, somewhere else. Add in the fact that plumbers, carpenters, electricians would not get hired. And where would they have spent their wages? At local restaurants, clothing stores, etc? Those restaurants could then add on a new cook or bus person who also would have a little extra cash in their pocket, cash that when spent will be taxed. And of course there's the issue of jobs created by the project once it is finished. I have no problem if you say you are philosophically opposed to incentives. But when you throw out numbers that probably don't add up because they are only the tip of the iceberg, that's misleading.

jafs 2 years, 11 months ago

That's not true at all.

From the story:

"New taxes from private development were expected to pay for about half of the $7 million garage (ie. $3.5 million). The taxes from new development, however, have paid less than $100,000 a year on the project" (ie. about $1 million)

As I've said numerous times, these sorts of predictions are inherently unreliable, and shouldn't be used to justify these sorts of projects.

just_another_bozo_on_this_bus 2 years, 11 months ago

"The 3.5 million vs. 1 million is only accurate if you assume the project would be built even if the incentives were not there."

This project was, in fact, completed before incentives were approved.

So, what was your point again?

MISTERTibbs 2 years, 11 months ago

You all are reading that incorrectly. The 7/3.5/1 is in relation to the TIF district as a whole and what has already been generated by the buildings in the district prior to this new structure. I don't believe any of those other structures would have been built without the TIF.

Yes, Compton was betting on the come before he finalized his request, but a quarter million is pretty small price to pay for the investment especially when it comes at a rate of 10%/year.

true_patriot 2 years, 11 months ago

This comment was removed by the site staff for violation of the usage agreement.

Sunny Parker 2 years, 11 months ago

Geee Do you think maybe this project will create jobs for people who actually want to work? I do!

just_another_bozo_on_this_bus 2 years, 11 months ago

Who's going to pay for the damage that the construction did to the streets in this area?

Cant_have_it_both_ways 2 years, 11 months ago

“The question then would be whether it is worth $28,000 a year to get a $10 million building? I think that would be a pretty easy decision.” ++++++++++++++++++++++ Developers need to build to stay in business. They should have to pay all their own costs. My money says Compton would have built this building without the taxpayers money. I wonder how thick the envelope was that was handed to the commissioners?

pizzapete 2 years, 11 months ago

What would it have cost a private individual to build a parking garage with 150 new spaces to accomodate their building? What kind of money is saved by instead renting the space from the city at $500 a year per parking spot? After saving all that money saved, they're still asking for another $250,000 back from us?

pizzapete 2 years, 11 months ago

Now that this building has increased the demand for parking the price of the spaces should go up accordingly. Or better still, the develper should add another 2 floors to the garage to meet the added need for parking in the area.

lucky_guy 2 years, 11 months ago

The 250K is money to keep the building from mysteriously burning down.

JustNoticed 2 years, 11 months ago

Right, because Compton definitely knows a guy.

Sunny Parker 2 years, 11 months ago

Maybe you libs can skip on down there and get a job!

big_john 2 years, 11 months ago

Anyone ever consider recall of the commission.

George_Braziller 2 years, 11 months ago

What's your obsession with John Stavros? He built the J.C. Penney store downtown but ran some questionable activities in the basement. I know a man who used to "participate" in some of the gaming activities there.

optimist 2 years, 11 months ago

“Right now in this state, and potentially in this country, we’re massively cutting our support for the poor and the elderly, but we’re being asked to provide social support for the rich,”

Why is it that when someone becomes elderly they automatically become a ward of the government, or the poor should get some kind of special consideration? I don't know Doug Compton from Adam so consequently I don't know his motives or his character. However I do know that he is bringing development to a community that has a reputation for being difficult to develop in. I do know that the Union has a gripe with him as evidenced by those camped across from his project on the other corner of 9th & New Hampshire every day.

The community at large will benefit from the improvements that his project is paying to install (i.e. street lights and other infrastructure). The cities reimbursement is contingent on his paying his property taxes. The amount the city will pay is short of the actual costs never mind the fact that the city is paying over a decade which is tantamount to a loan at no interest as the developer will carry that debt on his books for a decade and making nothing on it much like giving the city a low interest loan.

The other reason the city should follow through on this deal is that it is my understanding the city made a commitment albeit the project is later than planned. But the point here is that the delay had much to do with the economy and frankly I think it would be unwise to hold that against a developer that is willing to move forward with this project in the current economic climate. He's creating real sustainable jobs like we need small business people to do.

Carol Bowen 2 years, 11 months ago

The city commissioners volunteered for a very demanding and time-consuming job. The input they receive is not single source. Their perspective is different from each of us. We only know one perspective -our own, with or without information. Whether anyone agrees with them or not, we should respect their efforts. In Lawrence, we are fortunate to have a choice of candidates. By the way, is anyone interested in running for city commission next time around?

P.s. I agree with Mike Amyx on this issue.

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