Lawrence and Douglas County

Lawrence and Douglas county

Lawrence City Commission to review incentives request for downtown grocery store

A rendering shows a proposed grocery store and apartment building at 700 New Hampshire St.

A rendering shows a proposed grocery store and apartment building at 700 New Hampshire St.

August 11, 2017

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At its meeting Tuesday, the Lawrence City Commission will gets its first look at a multimillion-dollar incentives request from developers of a downtown grocery store and apartment project.

As part of the incentives application, a development group led by Lawrence businessman Mike Treanor is requesting a special financing district, bond agreement and a $2.25 million loan from the city to help complete the project.

The commission is only voting whether to accept the application Tuesday. City officials said the decision to receive the application does not obligate the city to proceed, but would authorize the city to go forward with the required studies related to the incentives.

“It’s just receiving it and then if the commission wishes to go ahead and put the project through the formal processes,” Assistant City Manager Diane Stoddard said. "And there are a number of steps with that."

The $26 million project would be located at Seventh and New Hampshire streets on the site of the former Borders bookstore. The plan is to tear down the old bookstore and replace it with a three-story building with an underground parking garage. The ground floor of the building would house a Price Chopper grocery store and a pharmacy, and the upper two floors would house 73 apartments, according to the incentives application. Community benefits indicated on the incentives application include infill development, walkability, job creation and increased access to fresh food.

In accordance with the city’s incentives policy, 13 apartments would be designated as affordable housing units. The apartments would be priced according to the Fair Market Rent model for the area and remain under those parameters for at least the length of the incentives agreement.

For incentives, Treanor Investments is requesting an $8.3 million, 20-year tax increment financing district, which would allow the development to receive a rebate on new property and sales taxes generated by the development. It is also requesting Industrial Revenue Bonds, a type of special financing that would allow the project to buy construction materials sales tax-free. Lastly, developers are requesting a $2.25 million interest-free or low interest loan for tenant finish of the grocery store.

Stoddard said loan requests as part of incentives applications don’t happen very frequently. In a memo to the City Commission regarding the incentives application, city staff asks commissioners to provide any “overall direction” related to the application. Stoddard said the loan request will be one thing the City Commission will need to weigh in on.

“They might provide general direction, like we really aren’t interested in a loan of that amount,” Stoddard said. “And they may provide other general direction related to the project that we can then take under advisement as we work with the developer.”

Stoddard said the incentives application will require the city to complete several studies, the cost of which are paid by the developer. She said city policy and state law require a feasibility study and a “but for” analysis for TIF districts. The feasibility study looks at the overall feasibility of a project given the revenue and expenditures, and the but for analysis determines if the incentives are necessary for the project to proceed.

Another requirement of the application is that those involved with the project do not have delinquent taxes or debts to the city. That requirement may come into play because the application states that Lawrence businessman Doug Compton “will likely join as co-developer once he has complied with city policy.”

Compton has ties to a pair of LLCs that at one point owed years of back taxes on several undeveloped parcels across from Lawrence VenturePark. The majority of those parcels have now been sold to a handful of entities, and several of the largest past-due amounts are no longer showing as delinquent on the Douglas County website. The ownership status of all 18 of the parcels and the amount of remaining unpaid taxes wasn’t immediately clear.

Stoddard said the city would research whether all those involved with the project have paid all their city and state tax obligations.

The City Commission will convene at 5:45 p.m. Tuesday at City Hall, 6 E. Sixth St.

Comments

Richard Heckler 4 months ago

Very interesting. Increasing taxes, rates and fees while at the same time handing out tax dollars to developers who can't seem to make money without tax dollar handouts from taxpayers who cannot afford the handouts.

Bob Smith 4 months ago

Kate Taylor is another lousy, rotten spammer.

Al Deathe 4 months ago

Since when have the taxpayers become a bank and giving no interest loans to developers? If projects like this can't come up with financing on their own they shouldn't expect the taxpayers to participate.

Deborah Snyder 4 months ago

The Simple Standard of Deduction (would this project succeed on its own merits) would indicate that past efforts to establish an independent food market in the downtown and North Lawrence area haven't worked out. So, all of Lawrence is being asked to subsidize a designer version, with yet more expensive (subsidized) apartments, all because ... Why?

How is it that we give Price Chopper a $2.25 Million Dollar low-interest loan (as if they're doing us such a huge favor) to trick out the publicly-financed space?

Our own homegrown grocer, Checkers, whose owner and manager helped all of our PTOs and PTAs, gave time and product for the food pantry... somehow, their proposal didn't appeal to the developer or the neighbors... but this application does?

If Price Chopper wants into the Lawrence market (pun not intended) then they can find it the same way Dillons, Hy-Vee, Checkers, The Merc and the now extinct IGA's did. If the metrics prove that there's a consumer base to exploit/develop, any of those stores would already be there.

Claims of a "food desert" don't justify this kind of financial taxpayer subsidy, let alone going through yet another costly boondoggle with Mr. Compton. A food market needs to succeed on its own merits, rather than a TIF scenario. All those food market businesses have

Deborah Snyder 4 months ago

...declined to move into this part of Lawrence, and BTW, because their long-term financial calculations show unsustainable losses in operations and competitive pricing. Physical access to these two parts of town has no commercial infrastructure support. And more often then not, most groceries need support boutiques and specialty shops to succeed... which isn't possible in that location.

With the sucker punch of the actual mill levies frim the school district, I'm not looking kindly on a city-borne risk subsidizing an unsustainable, independently unsuccessful proposition targeting a limited consumer base that already shops elsewhere for its food.

Kevin Kelly 4 months ago

Any incentives given should terminate and taxes paid if the grocery store closes. Grocery store is excuse to get more handouts towards building more apartments.

Dorothy Hoyt-Reed 4 months ago

But all these executives and developers will say "We hate socialism". This is nothing but corporate socialism. Yes, there is a grocery needed in that area, preferably right across the bridge. But at what cost? So rich people can get richer? Maybe our existing grocery stores should step up their delivery options. Then maybe the developers would have to risk their own money, instead of ours.

Clara Westphal 4 months ago

I remember in a face to face meeting with Commissioner Herbert before his first term telling me with a straight face that he would vote against tax incentives for these types of projects.

Richard Heckler 4 months ago

"I have said this before, but America is still over-stored," Macy's long-time Chairman and CEO Terry Lundgren told TheStreet in an interview Wednesday evening. "My guess is that some rationalization of retail space needs to occur, and I think we were at the forefront of acknowledging that," Lundgren continued, adding that while the online business for Macy's is "booming" it hasn't been enough to offset weak traffic to physical stores.

The numbers support Lundgren's claims of the U.S. continuing to be over-stored.

There is 23.5 square feet of retail space per person in the U.S., drastically higher compared with the 16.4 square feet in Canada and 11.1 square feet in Australia, the next two highest -- according to the International Council of Shopping Centers. The abundance of stores has retailers battling each other with rampant discounts to try and drive business but with little to show for it.

Green Street Advisers recently estimated that the nation's department stores averaged a paltry $165 in sales per square foot last year, a 24% decline since 2006. For department stores to boost sales per square foot, which is vital in driving profits due to the high rents an anchor store such as Macy's pays,

Green Street proposed a mind-blowing measure: The department store sector needs to slash about 800 locations in the U.S, or one-fifth of all anchor space in U.S. malls, in order to reach the productivity levels they had a decade ago.

Real estate information firm CoStar gives a more drastic assessment, noting that about 1 billion square feet of retail space will be "rationalized" in the coming years through store closures and conversions to other uses.

Richard Heckler 4 months ago

The carnage in retail hasn't been this bad since an anarchist bombed Chicago's Haymarket Square in 1886.

In January, Liz Claiborne said it would shutter 54 Sigrid Olsen stores. Ann Taylor announced that 117 of its 921 stores would be closed.

Talbots axed the Talbots Men's and Talbots Kids concepts and 22 Talbots stores.

Even Starbucks has scaled back its yearlong saturation-bombing campaign.

Meanwhile.....

Judith Levine suggests that superannuated Sears and Kmarts could be turned into municipal swimming pools or community buildings.

Some empty strip malls could be repurposed into warehouses for online retailers.

I'll bet a few rogue Freegans are already planning to monetize all the junk their colleagues collect by opening secondhand stores.

Hmmmmmmmm

Richard Heckler 4 months ago

Will a Price Chopper produce a negative impact on existing grocery stores? Absolutely.

Can Price Chopper steal enough customers away from Dillons at 6th and Lawrence, Mass Street Dillons and Checkers in order to survive on the long term?

My speculation says no.

There are 3 grocery locations at 6th and Wakarusa. Not a good scenario. Think reduced staffing.

Convenience is a costly endeavor. And not necessarily healthy for economic growth.

A neighborhood medical clinic would probably be successful.

Nick Naidenov 4 months ago

Where are our incentive packages for staying in Lawrence and tolerating theft through tax increases?

David Holroyd 4 months ago

A food desert in an area of expensive apartments and parking for jeeps, bmws! A joke !

Louis Kannen 4 months ago

In referencing Kate Taylor's above observation, "The impact hurled people into the air. Those left standing scattered, screaming and running for safety in different directions." , am I correct in assuming this occurred when the development group led by Mike Treanor, submitted their incentives application request to the City Commissioners...??

Dorothy Hoyt-Reed 4 months ago

Wow, this thread is becoming pretty surreal. First this Kate person posts spam and then a comment about the murder yesterday? Does she spam to buy drugs. Using the computer while high is not a good thing.

David Holroyd 4 months ago

And the commission hasn't started on the roof for the Mausoleum. And now the very real possibility of a 2.5 million dollar loan. They should be ashamed each of them and no less led by MrMarkus!!! chad can you find out about the revenue from the parking Meters on Indiana and mississpi. You know, the ones Stuart Boley has money going to affordable housing. OR was it lie ?

Richard Heckler 4 months ago

1) Low Income Project Team (1996) ‘areas of relative exclusion where people experience physical and economic barriers to accessing healthy food’.

2) The Independent (11 June 1997) ‘food deserts were those areas of inner cities where cheap nutritious food is virtually unobtainable. Car-less residents, unable to reach out-of-town supermarkets, depend on the corner shop where prices are high, products are processed and fresh fruit and vegetables are poor or non-existent’.

3) The Observer (13 September 1998) ‘many poor housing estates were left as food deserts by the closure of local food shops’ and that in the few local food shops left, prices were up to 60% more than in the supermarkets.

4) The Guardian II (17 March 1999) ‘on the poorer estates of Coventry, low cost, good quality, food is not available to the poorest. These people ‘either have to shop at expensive local stores or pay for transport and lug small children for miles and back with shopping’.

Richard Heckler 4 months ago

Philadelphia grocer Jeff Brown has opened supermarkets in neighborhoods written off as food deserts. He hires from the neighborhood, adds specialty items the neighbors like and puts health clinics and community meeting rooms inside his stores. His stores make money.

Food Oasis innovators focus on what they can do, not what they can't.

In Chicago, community activists came up with Fresh Moves, a grocery on wheels.

In California, Oakland's People's Grocery created a mobile market and a farm-to-table distribution business serving low-income families. It's now launching a grocery store.

In Maryland, Baltimore's virtual supermarket allows residents to order healthy food and pick up their deliveries at neighborhood libraries, schools and senior housing sites.

Richard Heckler 4 months ago

The term “food desert” isn’t without its own problems. First, and perhaps most importantly, this neighborhood-based concept doesn’t reflect how people actually live: many shoppers travel beyond the store closest to home, and this includes low-income and limited-mobility households.

By drawing lines around an area (typically using administrative boundaries, like Census tracts), we’re dramatically abstracting the notion of access.

Another issue is that the desert metaphor adopts a deficit orientation. It’s possible that a neighborhood has a thriving urban garden system, or a robust network of curbside produce vendors, but no supermarket. By naming a place a food desert, we might overlook or obscure important community food assets.

Nevertheless, as a planning researcher, I find some utility in the term. Many low-income households want to shop at supermarkets, just as higher-income people.

Alternative models, such as farmers’ markets, cooperative groceries, and urban agriculture may all play a role (or, more likely, many roles) in terms of food access, mental and physical wellness, and community development. Yet they are hardly a replacement for the supermarket model that most American households use without issue.

The food desert concept can focus attention, and more importantly political, social, and economic capital, to one type of community development.

Indeed, supermarkets are major vehicle of the industrial food system; in many cases, they are also what low-income communities ask for. This is worth much further exploration, but I offer it here to suggest that these dynamics aren’t straightforward or simple.

When a new supermarket opens, do smaller stores close? This is often the fear, and sometimes the case. If so, what is the impact of these closures, both in terms of economic and social outcomes?

This isn’t the first time planners have advocated for supermarkets as elements of downtown revitalization. What lessons have we learned (or should we learn) from history?

What are some of the “false positives” that result from the food desert definition? For instance, where are places we call food deserts, but, in fact, are not? Is this because a network of smaller stores effectively fills in?

Alternatively, what about “false negatives?” Are there areas with supermarkets that are still poorly served? Is the quality of a neighborhood supermarket so bad that nobody considers it a viable option?

Or, more provocative: how much does access matter when shoppers are poor (i.e., isn’t this just a poverty issue)?

http://plan4health.us/defining-food-deserts/

Richard Heckler 4 months ago

This new grocery store area houses a generous population of students who often eat out in addition to doing some home cooking.

How is the not necessarily convenient intersection of 7th and New Hampshire going to manage traffic with the new apartments and a grocery store? This might become one of those intersections to avoid.

Will this new grocery store actually eliminate the perceived "Food Desert"? NO

Why does planning allow so many grocery stores in some areas kind of like a flood?

Mass Street Dillon's, Checkers, 23rd Street Dillon's and Natural Grocers are grouped together. The 6th and Lawrence Dillon's will also impact a new "downtown" grocery store.

Then comes the group 6th and Lawrence Dillon's, 6th Street Hyvee, 6th and Wakarusa Dillon's, 6th and Wakrusa Wal-mart and 6th and Wakrusa Sprouts.

In essence these two groups in such close proximity to each other not only created food deserts but also economic displacement. Why did this happen?

Carol Bowen 4 months ago

And, what jobs? How well does Price Chopper pay? Benefits?

Ralph Reed 4 months ago

North Lawrence is growing and is still a food desert.

It will be several years before the fighting over the apartment complex / grocery / pharmacy / etc will be done, at which point another piece of the Great Wall of Compton will be built.

Why can't part of the Tanger Mall be repurposed or a next grocery built in the lot to the south of the Mall? North Lawrence would then no longer be a food desert.

Richard Heckler 4 months ago

Lawrence is a small town yet has 15 grocery stores. 9 of which are like next door to each other. 5 are in the northwest corner and 4 in the southeast corner. Can we say no planning whatsoever? I say contact the owners of Tanger Mall and ask them to use their money to create space for a grocery store. Then provide a grocery store with owner provided incentives = new concept.

"Bill Fleming, an attorney who represents the development group, told the commission that the loan is needed to make the project work.

“There’s a lot of things that we’re trying to do to make the numbers work too, but at the end of the day the grocery store has to make a reasonable return on their money,” Fleming said. “Otherwise they’re not going to be interested in doing the project.”

When developers say they cannot make money on a project without the reckless spending of our tax dollars to guarantee them a profit the answer to that situation is " hey developer don't build it"

For the past 25 years Lawrence has been over building residential and retail based on what might happen = speculation. Lawrence is not that big. Lawrence has been building and blowing tax dollars as if Lawrence has a tax base of the Kansas City metro.

Excellent paying jobs have taken a back seat to over building residential and retail. This must be supply side wreckanomics.

Want to improve the lifestyles for all of Lawrence in every neighborhood? Dedicate millions of tax dollars annually to the Walkable Community and Compete Streets Project. Yes put the taxpayers tax dollars in the tax payers neighborhoods. Thank you.

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