Archive for Tuesday, June 24, 2014

Committee fails to make recommendation on tax incentives for high-end apartments near Memorial Stadium

June 24, 2014


A city advisory committee Tuesday made no recommendation on tax incentives for the developers of a proposed $75 million apartment and retail development across the street from Kansas University's Memorial Stadium.

The development company — Chicago-based Here Kansas, LLC — wanted rebates in property and sales taxes that would have totaled $6.4 million over 12 years.

The committee staff recommended a $5.6 million incentive package over 10 years because the benefits to the city and county were less than required under guidelines of the Neighborhood Revitalization Act program.

A motion to approve the larger proposal before the Public Incentives Review Committee failed on a tie 4-4 vote. Earlier the staff proposal was also defeated.

So the next stop for the tax rebate question will be before the full City Commission. A date had not been set on when that would happen.

James Heffernan, a principal with HERE Kansas, LLC, pushed for the larger incentive project, saying that the project could be jeopardized without it.

"Giving us a haircut right now is a terminal problem," he said. He also said he felt the staff analysis underestimated the economic impact of the project, which would replace a deteriorating apartment complex with 237 high-dollar apartments.

A four-bedroom apartment would rent for more than $2,800 per month, while a one-bedroom would go for nearly $1,200 per month. Plus, the retail development, featuring restaurants, would pump in sales taxes to the local economy, Heffernan argued.

Several members of the committee agreed with Heffernan, saying that after the rebate period was over, all taxing units would receive much more in tax revenue than they currently do for the property.

But other members of the committee said they didn't want to deviate from the guidelines of the incentive program.

In the 4-4 tie, Jeremy Farmer, Bradley Burnside, Brian Iverson and Linda Jalenak voted for the higher rebate, while Shannon Kimball, Mike Gaughan, Mike Amyx, and Dennis "Boog" Highberger voted against it. Highberger said he couldn't support subsidizing such expensive rental property.

Earlier, Kimball and Gaughan supported the lower rebate, but they were out-voted by the rest of the committee.


Bob Forer 3 years, 5 months ago

If it is not financially viable without a taxpayer handout, then it shouldn't be built.

Charles McPheeters 3 years, 5 months ago

Someone explain why the taxpayer should help on a project like this?

Sarah Humbert 3 years, 5 months ago

$1200 for a one bedroom apartment? You can rent a 3 bedroom house for less than that! Who do the expect to live in these high-dollar apartments, anyway?

Wayne Kerr 3 years, 5 months ago

Seriously, $1,200 a month for a one bedroom apartment? This isn't Chicago guys. Even Compton, our biggest landlord, isn't foolish enough to try and charge that kind of money. Heck, that's more than the mortgage payment on my three bedroom house. All the city commissioners who voted in favor of this nonsense need to be voted off our little island.

Wayne Kerr 3 years, 5 months ago

$1,200 a month is $14,400 a year, so a student would have to make around $50,000 a year for the rent to equal 30% of their income. We have very few people and even fewer students making that much money in Lawrence and I would guess they mostly don't rent one bedroom apartments. Who were these guys thinking they were going to rent to, the King of Spain?

Steve Jacob 3 years, 5 months ago

That $1,200 a month room will be KU basketball players rooms after the NCAA loses the O'Bannon trial next week.

Dorothy Hoyt-Reed 3 years, 5 months ago

If they are going to charge that ungodly amount for rent, then why do they need tax relief? It sounds like they are going to make a nice profit. And they aren't even local. I may not care for some of the things Compton has done, but at least he is local.

Kendall Simmons 3 years, 5 months ago

Jeremy Farmer has certainly turned out to be a real disappointment. He, of all people, ought to have a clue. But, no. Instead he keeps voting to spend money we don't have on things we don't need...or at least certainly don't need to spend taxpayer money on. What on earth is he thinking???

I mean, the 2014 HUD Fair Market Rent for Lawrence is $601 for a 1-bedroom unit. For a 4-bedroom unit? It's $1,253 - or only $53 more than these Chicago folks think they're going to be able to rent a 1-bedroom apartment for in Lawrence. And these new apartments are located where Berkeley Flats currently are. Are these people NUTS???

And keep in mind that this isn't empty land that's being built on. Berkeley Flats is already there. It already has tenants. And the complex already pays property taxes. So we won't just be giving "rebates" to build this new complex...but we will also LOSE the property tax income from Berkeley Flats for 12 years. (Oh, and Berkeley Flats provides affordable we LOSE that, too. Lucky us.)

Oh...and this company offered that elderly woman $600,000 for her property. That's more than one entire year of tax abatement from us. If they can afford to do that, they don't need an abatement. (Of course, that $600,000 was more than 1 year's worth of abatement, so perhaps they were counting on us Lawrence taxpayers to buy that property...which is why they were so generous???)

Bob Forer 3 years, 5 months ago

I disagree, Kendall. Jeremy does have a clue. He was a handpicked candidate of the wealthy developers and now he it paying them back for helping him get elected.

The guy is just another opportunist.

Richard Heckler 3 years, 5 months ago

Meanwhile the city commission goes on handing out local corporate welfare that will never get paid back to other new retail and residential.

Where are the consumers and dollars? Not in this community.

Taxpayers it is up to you to guarantee the profits on the reckless ventures.

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