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Incentives request for 5-story downtown condo project moves forward

This file photo from June 6, 2016, shows the lot in the 800 block of Vermont Street where Lawrence resident and former city commissioner Bob Schumm wants to build Vermont Place, which would consist of condominiums and office space.

This file photo from June 6, 2016, shows the lot in the 800 block of Vermont Street where Lawrence resident and former city commissioner Bob Schumm wants to build Vermont Place, which would consist of condominiums and office space.

September 14, 2017

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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.

Comments

David Holroyd 2 months, 1 week ago

So what will the valuation be for taxes ...?

Brett McCabe 2 months, 1 week ago

I truly don't get Leslie Soden or how anyone went into a voting booth and thought that this would be a good choice. The project broadens our tax base, helps build walkability, helps build downtown vibrancy and even meets the the commission's pretend interest in creating affordable housing. So, yeah, vote against it. We certainly don't want an improved property tax base.

This commission seems to think that money for services will just appear, no one will have to compromise and East Lawrence will forever be bathed in sunshine and fairy dust. Wake up! It's the real world, with real costs, real people and a need for leaders who can seek out real solutions.

Bob Summers 2 months, 1 week ago

Why would you "get" Leslie Soden? She is a Liberal. It is impossible to come to conclusions as they do.

Calvin Anders 2 months, 1 week ago

Brett, maybe she doesn't believe the city should subsidize the gentrification of our downtown. I'm not arguing that Schumm's pet project should be kept from moving forward, but why should tax payers help finance this move to continue to transform our downtown into a place only the wealthy can afford to live? This obsession with growing the tax base is unpleasant. If Lawrence's downtown will inevitably become littered with high dollar condos and high margin national chain stores crowding out independent shops and shops that cater to a broad socioeconomic base, so be it. But the city doesn't need to encourage it with huge tax rebates. This is simple good old boy corruption at it's core. And voters should remind our elected officials that turning downtown into a playland for the rich is not an agenda supported by the majority of voters.

David Klamet 2 months, 1 week ago

This is all vague at best, smoke and mirrors more likely.

A cost-benefit number is just a guess.

Schumm would still live there, just not get a property tax break, but still get his penthouse with the remainder subsidized by the city?

Affordable? That doesn't mean what they seem to think it means. At least not by any reasonable definition.

The Farmland Industries debacle should have been more than enough to convince anyone that the city should get out of the real estate business. This is just another real estate investment by the city with no direct benefit and dubious potential benefit.

Incentives to attract new business (i.e. those that HIRE people) seem to be an unfortunate and risky necessity. The benefits of this project, however, are unclear (actually, they're simply wild-*ssed speculation).

David Holroyd 2 months, 1 week ago

Oh, it's a great siite. Schumm can live on the top and look at a parking lots and the crappy behinds of the buildings in the 800 block of Mass or look north to a tower and a parking garage and to the south and roof tops and to the west a parking lot of the bank..

I can think of a lot better places to have a penthouse...in other cities. He can wander around downtown and ponder why he ever got rid of the Bull and the Boar......

Laura Green 2 months, 1 week ago

Maybe people who are already wealthy should fund their own development projects that make them wealthier?

For example, why should Tonganoxie pay over a million for sewers for Tyson, a multi-billion dollar company? That makes no sense to me.

Richard Heckler 2 months, 1 week ago

Considering Tysons damn near killed Table Rock lake then taxpayers were forced to clean it up. Polluters be damned!!!!

Richard Heckler 2 months, 1 week ago

When will Lawrence,Kansas taxpayers ever break even on the multitudes of corporate welfare taxpayers have been forced to cover? How many corporate welfare receivers have left town when the welfare expired? Or perhaps requested more?

There is no hard evidence to support corporate welfare that I can discover.

Why aren't taxpayers allowed to vote on tax incentives they want to or don't want to support?

I am of the opinion that taxpayers don't necessarily believe voting for a candidate that they are necessarily supporting laissez faire corporate welfare.

Yes I believe Mr Schumm should not be getting in my wallet for his for profit venture. His profit should be a result of excellent management skills NOT tax dollar welfare.

BTW who makes up for the loss of these sweet deals? In spite of what explanation may come our way NOT collecting the taxes is a loss.

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