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.