Screenshot from video of Lawrence City Commission meeting, Dec. 20, 2016.

When developers ask for public assistance from the city and its taxpayers, local leaders will now ask them exactly how their project will benefit the community.

On a unanimous vote, the Lawrence City Commission made sweeping changes to the city’s economic development incentive policy. The policy will require developers requesting incentives to specify the public benefit of the project as part of their application, among other new requirements.

“I think it’s really important to have at least somewhat specific guidelines that are still flexible, instead of just shouting out that there is a public benefit,” said Vice Mayor Leslie Soden. “Well, what is that public benefit, how much is the benefit, is it worth it?”

The list of possibilities includes about a dozen potential public benefits, such as affordable housing, primary job creation, in-fill development and tax base growth. While the question of whether a project would provide a public benefit often came up as part of the old incentive process, the new application will formalize the public benefit and include a performance review.

The policy changes come in the wake of public discontent over the use of economic development incentives by the city. Some incentives handed out over the past several years have been criticized for not providing enough of a public benefit.

Soden also said she supported a provision of the policy that bars applicants who owe delinquent taxes or debts to the city — whether on an individual basis or via an LLC the applicant has a stake in — from receiving incentives.

An applicant will also have to disclose all the owners in a company that applies for incentives for the city’s records. Both the tax and ownership disclosures will be made via sworn affidavit, and will have to be resubmitted annually.

“I literally want to know whose web I sit under, because it feels like a web all the time,” Soden said. “…I actually really feel like we have accomplished something with this.”

The city recently found that a local developer who was awarded millions in incentives has ties to a pair of LLCs that owe years of back taxes. In a separate incident, the city also recently filed a lawsuit against another local developer that alleges he used an incentives agreement to defraud the city.

The policy also includes a provision that requires applicants to keep records related to the incentives for three years and reserves the city’s right to audit those records.

The commission began discussing the city’s policy for economic development incentives in June 2015, and city staff, three advisory boards and Douglas County officials also provided recommendations. The nearly 50-page policy includes changes to both the application requirements and review procedures.

Among its provisions, the policy requires residential projects seeking incentives to set aside 10 to 15 percent of the units as affordable housing, outlines application fees, and for certain incentives requires a “but for” analysis that proves the project would be financially incapable of moving forward without the incentives. The policy also removes previously established guidelines that capped Neighborhood Revitalization Act incentives at a 50 percent rebate over 10 years.

Commissioner Lisa Larsen said she thought the policy struck a good balance.

“I’m glad to see the policies still contain a level of flexibility that I think is extremely important for us to be competitive with other cities across the state here, but at the same time we’ve added some measures that we hope will help us in the future making sure it’s evidence-based,” Larsen said.

At the same time, some commissioners wanted to make sure the city wasn’t creating a policy it wasn’t planning to use.

“Incentives have been likened to tools; tools aren’t any good if you just leave them in a box,” Commissioner Stuart Boley said. “We’re not going to get anything done if we’re not going to use these things.”

Boley added that the conversation was good, but that there would be no progress until the new policy was used to provide incentives for economic development in the city.

“If the community doesn’t want to do incentives, this policy is not going to help,” Boley said. “The community needs to be willing to incentivize projects that provide community benefit, and I think the development community is going to be interested in such projects. I hope that we can all make progress together.”