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.