The Lawrence City Commission narrowly approved granting more than $1 million in tax breaks to a mixed-use condominium project in downtown Lawrence.
At its meeting Tuesday, the commission voted, 3-2, to approve the tax incentives, with Mayor Leslie Soden and Commissioner Matthew Herbert voting against the request.
In making the decision, Vice Mayor Stuart Boley said he thinks the commission should consider the process, cost to the community and community benefit. Boley said the process has been exhaustive and transparent and the costs and benefits are favorable to the city.
“The cost to the community is the rebate of some property taxes,” Boley said. “Property taxes at the current level are very minimal. It’s been vacant for a long time, and that’s what we’ve been getting.”
Plans call for a five-story building with retail space, offices and 12 condos to be built in the 800 block of Vermont Street, where two vacant lots currently exist. The building would have an underground parking garage, and a one-bedroom condo would be permanently designated as affordable housing. The approximately 600-square-foot affordable unit is expected to sell for $95,000.
The cost benefit for the city will be 1.82, meaning that for every $1 in public incentives, $1.82 of benefit value will be returned. The city’s policy is that the cost benefit be at least 1.25.
The developer, former City Commissioner Bob Schumm, requested a 10-year, 75 percent property tax rebate through the Neighborhood Revitalization Act, as well as a sales tax exemption on construction materials. The two incentives have a combined value of $1.3 million.
Boley said that the building having owner-occupied properties is also important.
“Downtown vitality and stability will be enhanced by owner-occupied property,” Boley said. “I can’t tell you how much I like to see new owner-occupied opportunities downtown.”
The incentives request is a reconsideration of a request the commission denied in December, and has been modified in response to concerns regarding Schumm’s plan to live in one of the condos. Schumm resubmitted the request and proposed removing the personal residence from the property tax breaks, which city-contracted financial advisers said eliminated about $110,500 from the incentives amount.
Commissioner Mike Amyx said he thought the concerns had been addressed, and that the project is in line with the city’s goal of increasing infill development.
Herbert, however, listed several concerns he had with supporting such a project. Those included the city spending more than $1 million in incentives and only creating one affordable housing unit and no full-time jobs. Herbert also said he thinks it is “wholly inappropriate” for a former commissioner and mayor to request tax incentives from the city.
“In our roles as city commissioners, we are called public servants,” Herbert said. “In this capacity, we make some personal sacrifices, some familial sacrifices, some occupational sacrifices and, obviously, some financial sacrifices to be here.”
Soden said she is against the idea of increasing property taxes on residents while at the same time giving tax breaks to developers. In addition to supporting the city, Soden also noted that property tax revenue goes to support the school district.
On the other side of the debate, Commissioner Lisa Larsen said she thinks the project has several benefits. Larsen agreed that the project enhances the vitality of downtown, and also said the project is sustainable in that it adds density, calls for environmental building standards and uses existing city infrastructure. Additionally, Larsen said, it would cost the city more if the project didn’t move forward as proposed.
“It broadens our tax base,” Larsen said. “The numbers just don’t lie.”
In other business:
• Commissioners unanimously approved a $257,000 settlement agreement regarding invoices the city failed to send to the Riverfront Plaza. City staff said the settlement fully covers all payments due. The unsent invoices led to an outside audit of the city’s billing procedures, which is ongoing.
• Soden called for a moment of silence for the victims of the Lawrence and Las Vegas shootings. Soden said that the commission will be working with the new police chief to discuss public safety downtown and what more can be done to prevent such crimes.
• Soden proclaimed October as Domestic Violence Awareness Month. The proclamation states that throughout the month, the Willow Domestic Violence Center and its partners will promote awareness of domestic violence and the locally available shelters and community programs.