During a brief meeting Tuesday morning, the Lawrence City Commission set a date to discuss how it wants the city to use economic development incentives — a contentious and sometimes confusing issue that has accompanied recent debates on economic development.

Commissioners will hold a study session at 3:30 p.m. on Jan. 12 at City Hall, before the 5:45 p.m. commission meeting.

Mayor Mike Amyx said the session would make clear what types of projects commissioners want to grant public incentives for. Since the current City Commission was seated in April, there’s been debate among commissioners whether projects such as The Eldridge hotel expansion and the apartments at 800 New Hampshire St. should benefit from them.

There’s been a question about whether the incentives should be used for apartment or retail projects, Amyx said.

“Let’s just get it out there, so we can give clear-cut direction on what we could consider as a commission,” Amyx said. “I want to give specific direction from this commission on how incentives may be used in the future.”

Amyx has said part of the discussion would be about transparency requirements for businesses that receive public incentives. The comment was made after auditors discovered developers of The Oread hotel filed incorrect sales tax returns in order to receive improper sales tax rebates totaling almost $430,000 from the city and county.

Businesses at the hotel, 1200 Oread Ave., are part of a special taxing district — an incentive granted by the commission in 2008 — that allows the hotel’s development group to receive a rebate on a large percentage of all local sales taxes collected at that address.

The idea for a study session about incentives came up publicly Dec. 1, when commissioners were considering granting industrial revenue bonds for the apartment project at 800 New Hampshire St.

Commissioners voted 3-2 to grant the incentive, with Commissioner Matthew Herbert and Vice Mayor Leslie Soden voting against it. The bonds will allow developers to receive a sales tax exemption on construction materials and save them approximately $317,000.

Reasons Herbert listed for his oppositions were: the project does not include much parking; the apartments are priced at market rate; and the project would not be rehabilitating a blemished area.

Bill Fleming, a Lawrence attorney representing the project’s developers, told commissioners it was “probably true we’re going to build this project” regardless of whether the commission granted industrial revenue bonds.

Under city policy, to receive industrial revenue bonds developers are not required to prove they would not move forward with a project without them.

The project met the city’s criteria for the industrial revenue bonds, Amyx and Fleming said.

“We have a written policy that says we want people to look at these kind of projects in our downtown. They’re following our process,” Amyx said at the time. “If we want a change in the public incentive policy, we need to have that discussion, separate from this. This policy has gotten us a long way and done some pretty good things in this community. If it’s time to discuss a change, let’s talk about it. Let’s clear the air.”

When candidates were campaigning last spring for the City Commission, part of their focus was how the previous commission had used tax breaks and other financial incentives.

According to a Journal-World article from the time, now-Commissioner Stuart Boley said he was concerned about the city issuing tax rebates for apartment projects. He also said he thought Lawrence residents wanted the incentives to be used to produce jobs.

When campaigning, Herbert said he was against incentives for apartment projects, too, and that the previous commission went overboard with tax incentives and negotiated them poorly. Soden said incentives needed to be “about full-time jobs, first and foremost” and that the previous commission’s tax breaks for hotels and apartments felt too much like “trickle-down economics.”

Before voting against finalizing the issuance of industrial revenue bonds for The Eldridge expansion project in October, Commissioner Lisa Larsen said she, as a citizen, had been concerned with the amount of money allocated as incentives to some businesses and not others.

“One of the things I’ve noticed since the commission was seated last April, we’ve had discussion from time to time about public incentives and how they are to be used,” Amyx said Tuesday. “It’s now time that staff and the public really have an idea of where we’re at on the use of public incentives. It’s something we talked about that was very important.”

During a report to the City Commission Dec. 15, Lawrence chamber of commerce president and CEO Larry McElwain said he wanted the Chamber to be involved in the public incentives discussion. McElwain said the incentives are “essential tools” for providing economic development.