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Archive for Thursday, July 26, 2012

Backroom deal

July 26, 2012

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To the editor:

Apparently, the City Commission believes that it is a good idea to give away $12 million in tax revenue to one of the largest developers in town. They have chosen, on your behalf, taxpayers, to enrich the private coffers of local tycoon Doug Compton, et. al., at the expense of community needs.

This commission and staff have shamelessly promoted the Ninth and New Hampshire project in spite of the fact that its overall economic value has been questioned by many, many people. Further, this project has been bitterly opposed by the adjacent historic neighborhood. They will suffer most in the encroaching shadow of this misguided project.

Tax incentives like the ones just given to Compton and Treanor represent a direct drain on public resources. We are forgoing decades of tax revenue to subsidize a hotel that is neither needed nor wanted. The incentives granted add insult to injury. Indeed, the pandering observed at City Hall this season has been breathtaking.

We don’t need a new hotel or a new parking garage. What we need are city leaders brave enough to reject backroom sweetheart deals and, instead, protect community resources while exercising some semblance of fiscal sanity.

Comments

Fred Mertz 2 years, 5 months ago

Just remember when it comes time to vote.

Thomas Kurata 2 years, 5 months ago

Very well stated, Laura. This is all corporate welfare.

Recall that the Bauer Farm and The Oread Hotel are so-called Tranportation Development Districts, or TDD, which were approved by the city commissioners a few years ago. I discovered a couple of years ago that the Bauer Farm is a TDD after my wife and daughter made a purchase at CVS at 6th and Wakarusa. The sales tax was 9.85%, not 8.85%, on the sales receipt. After I contacted the Journal-World about this in early 2010, reporter Chad Lawhorn ran a story on the Bauer Farm to help expose what a TDD is and what it means for local consumers. The city commission at the time the TDD was being established did a very poor job of explaining this to the public, though commissioner Dever scrambled to cover his rear end by saying that the TDD had been brought up during a city commission meeting in the past.

Tax Increment Financing, or TIF, is another creative financing scheme which will be used in the 9th and New Hampshiire project, as I understand.

In either case, businesses that operate within a TDD or TIF have to charge an additional sales tax to patrons. The amount can be 1% or greater. The Bauer Farm and The Oread charge an additional 1%. This additional tax gets recycled back to the developers, apparently as a reimbursement to the developers for so-called infrastructure costs.

I would like to see the records of how much sales tax is being collected from Bauer Farm stores and The Oread, and how much is being recycled back to Compton, et. al.

I recall Mayor Schumm publicly stating at least two times during his city commission campaign in 2010 that he thought the additional sales taxes involved with a TDD or TIF were sneaky. I can only wonder if he still feels the same way. Commissioner Amyx rightly suggested that all businesses located within TDD or TIF districts should let customers know they are being charged an additional sales tax. Whether or not that got passed as a new ordinance, I don't know at this time.

I refuse to patronize any businesses located on the Bauer Farm or The Oread because I don't believe in providing corporate welfare for Compton, et.al. While Compton, et. al. have skillfully played the TDD and TIF schemes with the city, I don't agree with these schemes because in spite of being legal, taxpayers in the end get screwed. I will never patronize the future development at 9th and New Hampshire. Unfortunately, it is schemes like TDD and TIF that are helping drive the cost of living up in Lawrence.

Abdu Omar 2 years, 5 months ago

Being new here, could someone tell me where Bauer Farm is located? Thanks.

paulveer 2 years, 5 months ago

Laura, Thank you for your comments and activism. Same commission who's using the same tactics to ramrod unneeded massively expensive trash dept. overhaul with a sham task force, sham public comment sessions, and sham commission meeting discussion. As stated above, VOTE!

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