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City Hall

Economic development council says private fundaising crucial for development efforts

April 12, 2013


A $750,000 budget for the Lawrence Chamber of Commerce’s economic development division won the blessing of a key city-county board on Friday. But members of the new Joint Economic Development Council said a recently launched private fundraising campaign by the chamber will be critical to future economic development efforts.

“The direction you are heading right now is spot on, in terms of engaging the community with this campaign,” Mike Gaughan, a council member and Douglas County commissioner told chamber leaders Friday. “But it is crucial that you are successful with the campaign. Otherwise, we are going to have a more difficult conversation in the future.”

One possibility: a special local sales tax to pay for economic development efforts. But officials said that idea is premature.

The proposed 2014 budget for the chamber’s economic development division includes a projected $275,000 from the recently-launched three-year fundraising drive. That would be the largest private-sector contribution to the chamber’s economic development effort in recent memory. Typically, private fundraising has netted around $100,000 a year.

“But even at $275,000 or even $325,000 a year, that is still on the low end of what many other communities are generating from private fundraising,” said Brad Finkeldei, a member of the council and a member of the chamber’s board of directors.

For 2014, the Lawrence City Commission and the Douglas County Commission are each being asked to provide $218,000 in funding for the chamber’s economic development division. City and county commissioners still need to approve those amounts, but the council on Friday unanimously recommended approval of the request.

Some council members, however, questioned whether city and county financial support for economic development also is going to have to grow in the future. Council members were told that several communities — notably Topeka and Manhattan — have sales taxes that are dedicated to economic development.

Doug Gaumer, a council member and chair of the chamber’s board, said he would like Lawrence to develop some concrete economic development goals, such as increases in the average median income for families and increases in the city’s gross domestic product.

“But to be realistic about achieving those type of goals, we’re going to need more than $200,000 a year from the city and county and $275,000 from the private sector,” Gaumer said.

Previously, some city and county leaders have mentioned the idea of a new sales tax that could fund economic development initiatives. The idea has been to implement a local sales tax that would replace the sixth-tenths of a percent state sales tax that is scheduled to expire.

But council members said they aren’t confident the state will allow that sales tax to expire, and some questioned whether the public would support a new sales tax at the moment. “I think the conversation of a sales tax is entirely premature,” Gaughan said.

Any discussion of future funding for economic development needs to take into account the sizable amount of money local governments are investing in economic development efforts outside the chamber, council members said.

The city and county provide figures showing that they are budgeted to provide about $1.6 million in ongoing support for various economic development initiatives that don’t involve the chamber’s economic development division.

The biggest beneficiary is the Bioscience and Technology Business Center, based on Kansas University’s West Campus, which, is budgeted to receive about $840,000 from the city and $440,000 from Douglas County in 2013. The funding helps pay for operational and capital expenses at the the center's two business incubators.

City and county commissioners will consider the chamber’s budget requests as part of their budget deliberations this summer.


Richard Heckler 5 years, 2 months ago

I say no more tax dollars to the Chamber of Commerce. The city and county have been providing about $400,000 to the Chamber for managing economic growth which in my opinion has produced economic displacement.

Richard Heckler 5 years, 2 months ago

Does over retailing Lawrence,Kansas bring about "displaced spending" thus preventing or stalling real economic growth? Of course.

Are displaced spending and economic displacement related to each other? Identical twins.

Should Lawrence taxpayers be concerned with the impact of displaced spending/economic displacement in a community with so few available retail dollars? Certainly otherwise we experience drained wallets and increased taxes because new retail is not supporting itself nor the cost of new infrastructure billed to local residents.

I've been told that adding adding more and more retail to a community does not magically create more available retail dollars. If the community is not growing with excellent paying new industry then substantial growth in retail dollars does not occur.

Let's say,for example, if many many shoppers decide to NOT shop the new Tanger Mall and Riverfront Plaza instead chose to shop downtown Lawrence aka the central business district, the older retail community.

Would this be an example of how displaced spending aka economic displacement could fail? Yes because there simply was never enough retail dollars/customers to support all three.

If so what could be the overall impact? We know the impact.... Both failed yet the cost of maintaing all new infrastructure fell on the back of local property owners. Historically the funding of revenues generated by real estate property taxes does not pay for the services they require from a municipality. For all we know property owners may not be paying their property taxes in big empty commercial developments.

Richard Heckler 5 years, 2 months ago

If there are not enough retail dollars in Lawrence to support the over stock of Lawrence retail is Lawrence in effect shooting itself in the foot? Absolutely and this is NOT business friendly.

Is there a remedy? Absolutely. Instead of expanding the retail market Lawrence take on a new concept such as maintaining a much tighter retail market which = Fiscally Responsible Management and more sales for the existing retailers.

How much in salaries will be taken from this $750,000? Who has the experience?

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