If the southeast corner of Ninth and New Hampshire streets is ever to become anything other than a vacant lot, it likely will take some financial incentives from the city to make it happen, city commissioners agreed Tuesday.
Commissioners at their weekly meeting cleared the way for a nearly $12 million package of incentives to be offered to developers of a proposed $43 million redevelopment at Ninth and New Hampshire that is expected to include a multistory hotel/retail building on the southeast corner and a multistory apartment/office building on the northeast corner.
Commissioners agreed to create a redevelopment district on both the southeast and northeast corners of Ninth and New Hampshire streets, which will make the area eligible to receive special tax breaks to help developers build a pair of private, below-ground parking garages to serve new development at the intersection.
In total, the incentives are expected to reach $11.8 million over an approximately 20-year period, but commissioners Tuesday stressed none of the money would have to come from the city’s current budget. Instead, all of the money will come from new taxes generated directly by the development.
“I wish this project would happen without this, but I’m confident it won’t,” said City Commissioner Mike Dever.
Commissioners approved the redevelopment district on a 4-0 vote. Commissioner Aron Cromwell was absent. Commissioners said the fact the property on the southeast corner of the intersection has sat largely vacant for the better part of 30 years led them to believe any significant development on the corner would be unlikely to happen without assistance.
Officials with the development group, which is led by Lawrence businessmen Doug Compton and Mike Treanor, said that was the case. Bill Fleming, a Lawrence attorney with the development group, said it is not economically feasible to build a project on the corner without providing parking. But because the lot is small in size, he said, parking will have to occur below ground.
“That is an expensive solution,” Fleming said.
Several more procedural votes are expected to take place before the end of this year to finalize the incentives package, but Tuesday’s vote set in motion a plan that will create:
• A tax increment financing plan to cover both the northeast and southeast corners. A TIF allows new property and sales taxes generated by the development to be rebated back to the development group to pay for qualified infrastructure expenses, which includes the private, below-ground parking garages.
• Creation of a transportation district development tax, which will allow for an extra 1 percent sales tax to be charged on purchases made inside the two new buildings.
• The use of industrial revenue bonds, which will allow the development group to avoid paying sales taxes on the purchase of building materials used to construct the buildings.
Commissioners heard nearly an a hour and a half of public comment both for and against the incentives.
“I don’t really think this is an incentive,” said Laura Routh, a Lawrence resident. “I think it is welfare.”
City commissioners, though, said a key consideration is the deal is being structured so developers will take the risk if the redevelopment does not perform as expected. The developers will be required to finance the entire project, and the developers only will be reimbursed from new tax revenues generated by the development.
If the development does not produce the revenue anticipated, the city won’t be obligated to make up the difference.
In other city news, commissioners deferred for three weeks a decision on whether to start the historic review process on whether property at 1106 R.I. should be demolished.
The three-week delay will give members of the Barland family more time to present a plan to rehabilitate or sell the property.