photo by: Mike Yoder

Lawrence City Hall, 6 E. Sixth St., Thursday, July 7, 2016

Changes to Lawrence’s policies for economic development incentives are moving forward after more than a year of review by advisory boards. At their work session Tuesday, city commissioners will review potential changes that would limit the use of incentives, as well as hear input from county leaders and city staff.

Incentives were a major topic in the most recent election, and Commissioner Leslie Soden said public dissatisfaction was widespread.

“A lot of people were really unhappy with how incentives were being used and wanted to see that very clear public benefit,” Soden said.

Commissioners Stuart Boley, Matthew Herbert and Soden, all elected last year, campaigned on the notion that previous commissioners were overusing financial incentives for economic development. Soden said she thinks the wrong type of projects were getting incentives.

“One thing that really struck me as using incentives the wrong way was when they were being used for more luxury-type housing,” Soden said, noting the $75 million HERE apartment complex as one example.

Some of the proposed changes to the incentives policy would favor projects that provide direct public benefits such as affordable housing or “primary” jobs. A “but for” provision would also require that an analysis find incentives are required in order for the project to have enough funding to move forward.

As part of their work session, commissioners will review the recommendations from two boards that have been considering the policy changes, the Joint Economic Development Council and the Public Incentives Review Committee. Input was also gathered from the Affordable Housing Advisory Board, Douglas County and city staff.

The recommendations from each group vary, and city staff made their recommendation based on the input received from the various parties. The staff’s recommended policies for projects seeking economic incentives include:

• Affordable Housing Provisions: Projects with four or more residential units must set aside a portion of those units for households making 80 percent of the Area Median Income for Douglas County, defined annually by the U.S. Department of Housing and Urban Development. Affordable units must be in place for at least 15 years and make up at least 10 percent of units for projects with four to 49 units and 15 percent for projects with 50 or more units.

• Incentives Application: Applicants seeking to receive incentives for the Neighborhood Revitalization Act must pay $250-$5,000, depending on the scale of the project. The applicant is responsible for paying all expenses incurred by the city for professional services pertaining to the project regardless of whether the project is approved. If the request proceeds, the applicant may be asked to enter into a funding agreement to cover all costs associated with processing approval for the requested public assistance.

• “But For” Requirement: Projects with four or more residential units require the “but for” test if unrelated to primary job creation or affordable housing. City may waive “but for” requirements for nonprofits seeking these incentives. City must be reimbursed by the applicant for third-party “but for” analysis. There is no “but for” requirement on tax abatements or IRB requests.

•IRB/Property Tax Abatements: The applicant must pay the city an origination fee for bonds being issued on behalf of a for-profit company, unless the project will create primary jobs or add affordable housing to the community.

•NRA: The determination of the rebate amount and duration of the NRA is at the sole discretion of the governing bodies.

Recommendations from all parties are available on the city’s website. The commission’s comments on the policy recommendations will be used to inform a second draft of the policy, which will eventually return to the commission for final approval.

City commissioners will discuss the recommendations at their work session at 5:45 p.m. Tuesday at City Hall, 6 E. Sixth St.