To some members of the Lawrence Joint Economic Development Council, proposed changes to policies governing financial incentives are seen as “limitations” hampering the city’s ability to draw businesses.

The JEDC was one of two city boards to weigh in Monday on the potential policy changes initiated by the City Commission. The additions include raising application fees for incentives, as well as require more analysis and setting a maximum for tax rebates. The Affordable Housing Advisory Board on Monday looked specifically at a provision to require residential developments receiving incentives to set aside units for low-income households.

After discussion, the JEDC decided to meet again and vote on their final recommendations to the City Commission. The AHAB voted Monday on three suggestions to commissioners. The City Commission is likely to receive all of the input in August, said Lawrence Economic Development Director Britt Crum-Cano.

While some city commissioners suggested the changes to better define their goals of creating primary jobs and increasing affordable housing stock — and get away from giving large tax breaks to apartment and hotel developments — one JEDC member said Monday the new policies would “limit tools in the toolbox.”

“Any of these limitations we’re discussing are not going to help us,” said member Jason Edmonds, a founding partner at Edmonds Duncan investment advisers. “It seems like if we set the rules and limitations in advance without knowing our prospects, you set yourself up to not even find out about the prospects.

“The purpose of our organization is to create as great a glide path to success in terms of economic development as possible, and we should caution against any addition of policy that might make us less competitive relative to another community.”

Bonnie Lowe, Lawrence chamber of commerce chief operating officer, said she was “thinking about the deals that we would lose.”

“I think the fact that we’re looking at this information as a community is already a red flag to site selectors,” Lowe said.

The council concluded the policies should include flexibility in order to recruit job creators such as manufacturing and research businesses to Lawrence.

Mayor Mike Amyx issued that caveat in January, when commissioners met about the changes. At the time, Amyx said he was concerned about applying a cap on tax abatements — proposed at 50 percent over 10 years — to manufacturing developments.

City Manager Tom Markus, who was present at Monday’s meeting, agreed the policies should accommodate those types of businesses.

“Jobs are so important to our community that flexibility has to be a key indicator in doing this,” Markus said. “To me, I’m pretty aggressive about trying to bring manufacturing and good jobs. That’s a priority for our community.”

But Markus stood firm on the need for more analysis on whether developers really need incentives to carry out their projects.

The proposed policies call for “but-for” analyses to be performed before deciding whether to award various incentives, including transportation development districts and community improvement districts. The analysis is already required for tax increment financing. The test determines whether a proposed project would not be financially possible “but for” the issuance of incentives.

Cal Karlin, chair of the Chamber’s board, said businesses knew better than the city whether they were in need of incentives.

“Why do we get to be the puppet master?” Karlin asked. “Do we run off a really good company?”

In response, Markus said: “I don’t think we’re smarter than the industry we’re dealing with. But what you’re really asking is about an incentive, which is our business. We use this methodology to determine and protect the public’s investment to make sure we’re getting something worthy of investment. That’s what it’s about.”

JEDC members also took issue with part of the affordable housing requirement. Under that provision, a minimum 35 percent of units would have to be dedicated as affordable in incentivized residential developments with 50 or more total units. For developments with four to 49 units, 10 percent must be set aside as affordable.

Chamber CEO Larry McElwain said he would agree with “a low number.”

“That’s what I’m thinking,” he said. “Not 35 at all.”

Markus conceded 35 percent “seems pretty aggressive.”

Affordable housing board

The Affordable Housing Advisory Board also thought 35 percent was high. Members suggested it be lowered; however, the board also wanted to extend the duration units were required to be affordable. As is, the provision sets a 15-year minimum.

One of the suggestions the AHAB voted Monday to send to commissioners was to require 15 percent of units be affordable in developments with 50 or more units, but to require them to be affordable for at least 30 years.

“I love the 35 percent, of course,” said member Rebecca Buford, director of Tenants to Homeowners. “But we understand compromise and reasonableness, and in an attempt to show we’re reasonable, 35 percent should be the absolute high end.”

“I talked to developers who know the crisis we’re in and have said we can all be part of that solution, but that 35 percent scares the bejesus out of them.”

Shannon Oury, director of the Lawrence-Douglas County Housing Authority, said lengthening the requirement would ease her worries about loss of affordable housing stock.

“I think 15 years is short. Thirty years is better. Forever is great. It’s best,” Oury said.

The board also recommended that once tax rebates expire, a portion of the new tax revenue to the city be put into Lawrence’s affordable housing trust fund. The tax rebates are established through tax increment financing and the neighborhood revitalization act. Current TIF districts in Lawrence are at 1200 Oread Ave. and Ninth and Hew Hampshire streets. Lawrence has three developments receiving NRA rebates and four more that have been authorized.

Lastly, the board is suggesting residential developers receive more incentives for partnering with local nonprofit housing agencies to administer the affordable units.

John Harvey, director of resource development with the Lawrence Habitat for Humanity, said it would “promote partnerships.”

“It may force developers to work together who don’t usually want to work together,” Buford said. “Once they do, it won’t be as scary. Initially, they may have to be pushed.”

The board voted 9-1 to send the recommendations to the City Commission. Tim Stultz, a member of the Lawrence Home Builders Association, voted against them. He wanted money for affordable housing initiatives to come from Lawrence’s budget, rather than be placed on developers or market-rate tenants or homeowners, he said.