City wants more parking for mixed-use downtown grocery store

Pictured is a rendering of the northwest side of a proposed downtown grocery store at 700 New Hampshire St.

As the city reviews the economic incentives request for a downtown grocery store and apartment building, one of the items in flux is how much parking the project will have and who should pay for it.

“If we don’t build in parking as a part of a project, then the burden to provide parking tends to fall back to the city,” City Manager Tom Markus told commissioners at their Tuesday work session.

While downtown zoning does not require developers to provide on-site parking, Assistant City Manager Diane Stoddard said the grocery store and apartment project needs to be looked at in context. It would be located at Seventh and New Hampshire streets on the site of the former Borders bookstore, an area that has added hundreds of apartment units in recent years.

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“We do believe that this is a corridor where there has been some pinch points related to parking,” Stoddard said. She said some businesses in the area say the new apartments have created parking issues.

The city is requesting that the grocery store development group, led by Lawrence businessman Mike Treanor, expand the project’s underground parking garage, upping the available parking spots on the property from about 160 to about 340. The 340 parking spots would cover the demand for the grocery store and the 72 apartments proposed for the project’s upper levels, and they would also replace 67 public parking spots the developers are asking the city to convert to private spots.

Treanor didn’t necessarily agree that all those spots were needed. He told the commission that urban grocery stores and apartments require less parking than suburban locations. He also said the garage would be all public parking and that apartment residents would need to purchase a yearly parking pass to use the lot.

“We know from our own experience that not everyone has a car — most have one at most,” Treanor said. “So people are walking to work; they are actually living an urban experience.”

Most of the parking spots the developer wants to convert from public to private are behind the Hobbs Taylor Lofts. The developer is relying on negotiations with Hobbs Taylor owners to enable the “non-gourmet” grocery store on the site, which goes against a Hobbs Taylor covenant, according to a city staff memo to the commission. Turning over public parking spots to Hobbs Taylor is part of a pending agreement between developers and Hobbs Taylor.

The city previously purchased the parking spaces on the Hobbs Taylor site. Stoddard said if the city agrees to turn over the spots as part of the project’s incentives request and the spots are not replaced, the city will essentially be “paying twice” for those spaces.

Bill Fleming, a Lawrence attorney representing the development group, said the issue with expanding the underground parking garage is that it adds significant costs to the project. Fleming said that increasing the size of underground parking garage as requested by the city would increase the price from $7 million to $12 million.

“Part of the challenge to the project is to the extent that we expand the amount of parking that is being requested, then we have to have more participation from the city in how we pay for that,” Fleming said.

The city has already said the project has a substantial funding gap, and several scenarios to help pay for the parking garage are being discussed. Those include a pay-as-you-go Tax Increment Financing district to reimburse both TIF property and local sales tax and a lease-purchase agreement for the parking garage.

Stoddard said the issue with the TIF is that the bulk of the sales tax revenue generated from the new grocery store would be redistributed from sales at existing grocery stores, meaning that reimbursing the developer for those sales taxes as requested would decrease the city’s revenue. Fleming said that bringing more residents downtown generates economic activity that will benefit everyone downtown.

Commissioner Mike Amyx asked Fleming if the project could instead be decreased in size, moving the apartments to other buildings being proposed for the site of the former Journal-World production facility. Fleming said they could look into the scenario, but that the apartments help defray the land costs and increase density.

Markus said he suggested the idea of a lease-purchase agreement under which the city would make payments over a period of years and eventually own the parking garage. He said city staff needed to make sure state law would allow such an agreement.

Parking is one of several issues that city staff has raised about the project’s incentives request, and commissioners agreed those concerns are valid. City staff’s recommendation is that those issues be resolved before the project’s incentives request proceeds to the city’s Public Incentives Review Committee.