Trio of Lawrence commissioners say they want to get tougher on economic incentives

A new trio of commissioners are interested in new, tougher standards on when the city provides financial incentives to hotels, apartment complexes, retail developments and projects that don’t produce large numbers of full-time jobs.

The three commissioners who were elected in April — Stuart Boley, Matthew Herbert and Leslie Soden — said at a Tuesday afternoon study session they wanted to consider significant changes to how the city provides property tax and sales tax rebates to a variety of projects.

“A lot of this is trickle-down economics, and I’m not interested in that,” Soden said. “Let’s talk to (Gov. Sam) Brownback about trickle-down economics to see how that is working out.”

Soden said she was pleased with how the city is granting traditional tax abatements to industrially-based companies that are producing significant numbers of full-time jobs that pay living wages with benefits. But she said the city too frequently has provided property tax or sales tax rebates to projects like hotels, apartments and other projects that are more about producing new real estate development than new jobs.

“People do not like how it looks because, rightly so, it looks like people are not paying their fair share of taxes, and it looks political on top of that,” Soden said.

Most of those projects have involved the use of the Neighborhood Revitalization Act, tax increment financing, transportation development districts or industrial revenue bonds.

Boley said he wanted the city to re-examine many of the policies that govern those incentive programs. He said those incentives have not been overly effective in generating new jobs, especially compared to traditional tax abatements given to industrial companies.

“The community sees this as a jobs issue,” Boley said. “If we are going to give an abatement, we get jobs. When we do the NRAs, I don’t see the jobs.”

City officials don’t traditionally track jobs created by the Neighborhood Revitalization Act program. But they noted the program’s purpose has been more geared toward revitalization of downtrodden properties rather than job creation.

Mayor Jeremy Farmer said many of those projects have intangible benefits that don’t necessarily show up in job totals or other financial figures. He said the city needs to figure out a better way of communicating those intangible benefits to the public.

Soden, though, said she’s not sure the city should be offering economic incentives based on items that are so difficult to measure. She said she would be leery of using NRAs, TIFs, TDDS and industrial revenue bonds during her term.

Boley said he still wanted to keep those options on the table, but wanted to look at policy changes that rein in the size of tax rebates offered and also better analyze the costs and benefits of a project.

Herbert said he wanted to keep the incentive programs available as an option for development projects, but said the city needs to “raise the bar” on what is required to win an incentive. He also said the city needs to start charging significant fees to developers looking to apply for incentives.

In other news, commissioners at their study session:

• Tentatively agreed to seek consultants for an approximately $75,000 study that will examine the city’s housing market. Commissioners said that would be a good first step in determining the scope of the community’s affordable housing problem.

A non-profit religious organization, Justice Matters, has advocated for the city to create an affordable housing trust fund to begin addressing affordable housing issues in the city. Commissioners have not yet committed to creating that trust fund. Commissioners didn’t address whether they would wait to deal with the trust fund issue until after the housing report has been completed. The housing report likely will take six to eight months to complete.

Since commissioners were discussing the issue in a study session, they could take no formal action on ordering the study. The issue is expected to be placed on a future City Commission agenda to direct staff to find an appropriate consultant. The city would pay for the study with money that has been left over from a previously formed housing trust fund that has been inactive since 2005.