A tax break for a mixed-use condominium project along Vermont Street in downtown Lawrence has received preliminary approval.
At its meeting Thursday, the Public Incentives Review Committee voted to recommend the project for approval. That recommendation will now go to the City Commission for consideration.
Economic Development Coordinator Britt Crum-Cano said city staff is recommending approval of the incentives because the project supports several city goals, including infill development, downtown vibrancy and affordable housing.
“In general, staff is favorable to this project for a variety of reasons, because it does support several goals that I think we’re trying to achieve as a community,” Crum-Cano said.
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 one of the condos would be permanently designated as affordable housing.
The developer, former City Commissioner Bob Schumm, is requesting a 10-year, 75 percent property tax rebate through the Neighborhood Revitalization Act, as well as a sales tax exemption on construction materials. Together, the two incentives have a combined value of $1.3 million.
The incentives request is a reconsideration of a request the City Commission denied in December. The request has been modified in response to concerns from some commissioners regarding Schumm’s plan to live in one of the condos. Schumm resubmitted the request and proposed removing the personal residence from the NRA rebate.
Financial advisers have now factored that aspect out of the property tax rebates. Tom Jackson, of National Development Council, told PIRC that exempting any unit that Schumm occupies from the property tax rebate calculation amounts to about $87,000 over the 10-year rebate period.
Jackson said other modifications to the project were also analyzed — such as taking out the underground parking or a floor of residential housing — but ultimately decided against because they did not improve the financial feasibility of the project.
“In fact, it continued to get less feasible from an economic standpoint,” Jackson said. “So it wasn’t a light decision just to bring back something that had already been voted down without at least investigating some of those other possibilities at the request of some of the commissioners.”
Schumm indicated another reason for resubmitting the request is that the city has since adopted a new policy that specifies affordable housing requirements. Schumm also told PIRC members that without the incentives requested it doesn’t make economic sense for him to proceed with the project.
The cost benefit for the city would be 1.78, meaning that for every $1 in public incentives, $1.78 of benefit value would be returned. The city’s policy is that the cost benefit be at least 1.25. Ultimately, Jackson said the analysis showed that the incentives were justified and the returns for the developer were reasonable.
“And I don’t find any undue enrichment of the developer given the assumptions of this analysis,” Jackson said.
PIRC voted last year to recommend the incentives request for approval, and with minimal discussion, voted, 7-1, Thursday to recommend the new request. PIRC member Mayor Leslie Soden, who voted against the request when it came before the City Commission last year, was the opposing vote Thursday. She did not elaborate on the reason for her opposition, but previously she has stated that the project did not provide enough community benefit to receive incentives.
The City Commission was originally scheduled to review the incentives request next week, but Crum-Cano said that discussion will likely be continued to the commission’s Oct. 3 meeting.