Archive for Monday, February 12, 2018

Editorial: Incentive policy should stand

As long as commissioners exercise good judgment in awarding incentives, the written rules don’t need to change.

February 12, 2018

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Lawrence city commissioners should take into account developers’ tax histories in determining whether to grant tax incentives; however, it isn’t necessary to change current policy.

At present, the city’s economic incentives policy only prohibits those with “currently delinquent” taxes from being eligible. Developers who have had delinquent tax issues in the past but have been able to resolve them remain eligible for incentives on future projects.

Resolving past tax delinquencies can include the auctioning of indebted properties due to tax foreclosure, even if the auction leaves the city eating costs — the developers still qualify for incentives.

Some city leaders think that’s not right and that the incentives policy, which was overhauled last year, should be more restrictive.

“That’s how we create a society, is by having what should be a level playing field for individuals, but instead it just seems that there are all these loopholes that businesses find and take advantage of that individual citizens can’t,” Commissioner Leslie Soden said. “And it’s just not fair.”

The policy is about to be tested by a pending incentives application for a downtown grocery store and apartment project. Developer Doug Compton is likely to join the project.

Two investment groups that include Compton, Fairfield Investors LLC and Eastside Acquisitions LLC, fell behind on at least $1.73 million in property taxes and special assessments on 18 properties in eastern Lawrence. Not all the city’s costs have been recouped, but the investment groups are now current on taxes. The investment groups paid about $1.58 million in delinquent taxes in July 2017. About $680,000 remains unpaid, but those properties are no longer in the name of the investment groups and are scheduled to be auctioned in a tax foreclosure sale.

Compton notes he was just one of six partners in the properties and said he was largely responsible for addressing the tax issues.

Commissioner Lisa Larsen said tax history should be considered when a developer such as Compton applies for additional tax breaks. She said she would ask for city staff’s help to understand the full picture for all incentives requests, including whether a developer has a history of being a good taxpayer.

“You just can’t legislate every single scenario,” Larsen said. “If there is wiggle room, someone will find it. That is where the discretion of the commission is going to come into play.”

Larsen’s perspective is spot on. Further restricting the incentives policy would no doubt become an unforeseen barrier to development that could benefit the city. Policies provide them with guidance, but ultimately, commissioners were elected to exercise their best judgment on behalf of the public on city issues.

The economic development incentives policy doesn’t need to be changed — commissioners simply need to do their job.

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