Entries from blogs tagged with “Town Talk”
Audit results about special taxing district at The Oread expected soon; questions about Eldridge tax break; eco devo leaders seeking firms to work on Menards project
Concerns about the operation or management of The Oread hotel’s special taxing district are expected to come to light soon, I’ve learned.
If you remember, City Hall reporter Nikki Wentling reported last month that the city had hired an auditor to review the special taxing district, which has generated more than $2 million thus far for the local development group that built the hotel.
The audit by the Wichita-based firm Allen, Gibbs & Houlik has now been completed, and city officials are promising to release its results. The city hasn’t yet provided any details on the audit, but there are certainly indications that there are some significant findings.
“The position we are in now is that we are contacting all parties that were involved in the audit, and we want them to hear everything we have found and what we intend to tell the public, so that there won’t be any surprises,” Commissioner Matthew Herbert told me.
Commissioners thus far haven’t said whether concerns center on how the private businesses have used the special taxing district or whether they are related to how the city has managed the district, or whether they are some other set of concerns. They have been tight-lipped about the audit, and, in fact, the audit only came to light due to an anonymous tip that the Journal-World received about its existence.
One issue the J-W’s article last month pointed out is an oddity with one business that is listed as having a home in the district. Records from the state indicate a business called Oread Wholesale L.C. is located at 1200 Oread Ave., the address of the hotel. Information from web listings and other sources indicate Oread Wholesale L.C. is a wholesale supplier of construction materials.
But, there are no signs of a wholesale construction material supplier operating at the upscale Oread. When the J-W went to the hotel last month seeking information about Oread Wholesale, a clerk at the hotel told our reporter that Oread Wholesale was listed as the address “just to get stuff shipped in.” The clerk said there was no warehouse on site.
What makes this element interesting is that the latest annual report on file with the state of Kansas for Oread Wholesale lists Thomas Fritzel as the primary owner of the company. Fritzel is also the leader of the development group that benefits from the special taxing district at The Oread.
The way that special taxing district works is that the development group gets a rebate on a large percentage of every sales tax dollar generated at the 1200 Oread address. When you buy a meal at The Oread, a large percentage of the sales tax gets rebated back to the development group, which then is supposed to use the money to pay for infrastructure projects and the private parking garage that were built as part of the project. If a wholesale construction supplier is selling materials at that address, then Fritzel’s development group would get a rebate on the sales taxes charged on that material as well.
A couple of questions come to mind:
Are construction material sales actually happening at 1200 Oread, or is the address just being used to take advantage of the benefits of the special taxing district?
If construction materials are being sold at 1200 Oread, is that the type of business that city officials intended to provide an incentive to? It certainly wasn’t the type of business ever mentioned publicly when Fritzel was lobbying commissioners to approve the incentive. That lobbying effort was all about providing an incentive for an upscale hotel that would help the city attract more visitor dollars. We previously have tried to talk with Fritzel about this issue, but with no luck.
It is important to remember that I don’t know what the audit’s findings are. Oread Wholesale may or may not be a part of the report. Either way, it is an interesting issue.
Another interesting issue may be brewing on this front. As we previously reported, this audit began in April. City commissioners in October approved a tax break for The Eldridge Hotel. The Eldridge Hotel and the Oread development group have a lot of cross ownership. Fritzel is the leader of both groups. I confirmed with interim City Manager Diane Stoddard that commissioners were aware of the Oread audit that was underway at the time the commission was voting on The Eldridge tax break. Commissioners approved The Eldridge tax break — valued at about $460,000 — on a 3-2 vote with Commissioners Leslie Soden and Lisa Larsen voting against it.
So, to summarize: The commission knew there was an audit underway regarding questions about the use of The Oread special taxing district, but it approved a new incentive that will benefit many of the same people who are involved in the audit at The Oread. If the audit comes back and finds that Fritzel and his development group have done no wrong in the Oread taxing district, then I suppose no harm, no foul. But if the audit does raise concerns about Fritzel and that development group, I suspect the public is going to have questions about why the City Commission didn’t wait to act on the Eldridge request until the Oread audit was completed.
I asked some commissioners whether they thought about waiting. Herbert told me he did but ultimately decided against it.
“I have thought about that quite a bit,” Herbert said. “Even though there are certainly some elements of cross ownership, they are two separate entities, and I think they ought to be treated as separate on that matter.”
I asked Commissioner Stuart Boley the same question, and his answer was more confusing. When I asked him whether he had given any thought to delaying that vote, he referred me to Toni Wheeler, the city’s attorney. I told him I didn’t think Wheeler was in a good position to comment on why Boley did or didn’t vote on a particular matter. Boley said he just wasn’t in a position to answer questions about the subject. I asked him if he could explain why he wasn’t in a position to answer questions about his thought process regarding a vote he had taken, and he told me he wasn’t in a position to answer that question either.
Mayor Mike Amyx was the third vote to approve The Eldridge incentive. We’ve traded messages, and we’re scheduled to talk on Monday. I’ll report back on his thoughts.
Again, it is tough to know what is next because it is unclear what the audit has found. But I think the findings could be significant, and they could represent quite a test for the City Commission. From my view, the greatest challenge facing the City Commission currently is regaining the trust of the public. The process used to build Rock Chalk Park damaged the trust level with some residents. The resignation of Mayor Jeremy Farmer from the commission also hurt. If this audit does create questions about how this special taxing district has been used or managed, it will be a key moment for the commission as it relates to building trust with the public.
Herbert told me that the city plans to be straightforward in its findings.
“We have every intention of going public with every piece of it,” he said.
There will be some considerations the city has to take into account as it releases the information. It is against state law to release some types of private business sales tax data.
Herbert also said he thinks the information will be coming forward sooner rather than later.
“Based on the information I’ve seen, we have a very vested interest in dealing with this pretty quickly,” Herbert said.
Stoddard, the interim city manager, also told me her plan is for the city to provide a full briefing to the public on the matter.
“I would anticipate something will be forthcoming,” Stoddard said. “The city is trying to be as transparent as we can at the appropriate points in the process.”
In other news and notes from around town:
• A project that is going much smoother at City Hall is the public incentive request for Menard Inc. to build a new production and distribution plant at Lawrence VenturePark. As we’ve reported, the project has won a positive recommendation from the city’s Public Incentives Review Committee, and has won the necessary approvals from the Douglas County Commission. City Commissioners are scheduled to vote on the project’s incentive package — valued at about $2.3 million — at their Jan. 5 meeting.
Folks in the business community are looking ahead toward when the plant may be built and in operation. Officials with the Lawrence chamber of commerce and the Economic Development Corporation of Lawrence and Douglas County, have begun reaching out to local contractors on behalf of Menard Inc.
Brady Pollington, vice president of the EDC, said he’s looking to hear from any Lawrence area firms who have an interest in working with Menards on their project. That could include building contractors, earth movers, landscapers, engineers, equipment suppliers, staffing agencies, and a whole host of other businesses that may be needed to operate the facility.
Pollington said he’s gathering the names of the firms and presenting them to Menards.
“I’ve had those conversations with Menards and told them that we want to get this information out to our members and our community,” Pollington said. “Menards told me they wanted to use as much local as they can.”
Any business interested in working on the project should send its information to Pollington at email@example.com.
I probably need to spend more time reading comic books. As the "Star Wars" fever rises, some in my household are becoming frustrated that I keep confusing Count Dooku with Count Chocula. But fear not, we don’t have to be confused for long because the world of comics (yes, there are "Star Wars" comic books), board games and fantasy is becoming big business in Lawrence.
A new three-story comic and gaming store is opening in downtown Lawrence. Well, sort of. The Game Nut and Astrokitty Comics & More have merged, and an expansion project is underway at Game Nut’s longtime home at 844 Massachusetts.
Astrokitty recently vacated its longtime space at 15 E. Seventh St. when owner Joel Pfannenstiel sold Astrokitty to Game Nut. Joel, though, continues to be a part of the business. He’s helping design the expansion that will end up occupying all three floors of the Game Nut building at Ninth and Massachusetts.
“We plan to be the largest gaming store in Lawrence and really one of the largest ones in the Kansas City area,” Joel said.
The space already is occupying two of the three floors. The top floor of the building houses the comic book shop — now known as Astrokitty @ Game Nut — and it also includes the store’s action figure department. The main floor of the building continues to house the electronic video games. Work is underway to expand the shop into the basement level. It will include the board game selection, role playing games, the store’s High Score video game lounge, and a large area that can house up to 60 people who want to get together to play tabletop games.
“We want to create space where the community can meet and play,” Joel said.
The space, which is expected to be open in February, will be called The Dungeon, complete with the old stone walls of the basement that will be left exposed. Getting together to play board games or other tabletop games has become an emerging trend.
“There’s just a camaraderie and social aspect of it that you don’t really get as much with the video games,” Joel said. “We’re really going to push the aspect of community and interaction and people coming together.”
Video games, though, will remain a large part of the business. Joel said the number of people who play both video and tabletop games and read comic books is large. Television shows — everything from "Game of Thrones" to the multitude of zombie stuff — has led to greater interest in games and literature related to fantasy and other genres.
“There has been a huge upswing,” Joel said. “All this stuff that I’ve immersed myself in all my life, other people are doing it too. It is very cool.”
The Lawrence business community is certainly betting on the trend. This is the third major comic/gaming project I’ve reported on this year. Boom Comics opened an approximately 15,000 square-foot comic and gaming store earlier this year in the former Kief’s Audio Video space at 2429 Iowa St. In west Lawrence, Rolling Gnome Games — a store that focuses on a variety of board, tabletop and card games — opened at 3727 W. Sixth St.
Game Nut and Astrokitty, though, are two of the longer-term players in the Lawrence market. Both are celebrating their 10-year anniversaries this year, Joel said.
It sounds like the expansion in the industry isn’t quite done. Joel said Game Nut owner Gene Nutt is undertaking an expansion of his south Iowa Street store. Plans call for the amount of space for the south Iowa Game Nut, which is at 2540 Iowa, to approximately double. Work is likely to be completed in February, Joel said.
In other news and notes from around town:
• If I’m going to start reading lots of comic books, I’ll probably need a new house with an extra room to keep all my Count Chocula costumes. (Sorry, I’m still getting confused.) Regardless, I do have the latest figures on home sales in Lawrence.
For October, home sales in Lawrence were basically flat. (I didn’t say I had exciting figures. Why do you think I’m still making Count Chocula jokes?) Sales totaled 83 units, down from 84 in October 2014.
The numbers for the year to date are more exciting. The October numbers pushed Lawrence above the 1,000 homes sold mark for 2015. For the year, home sales in Lawrence are up 15 percent compared with 2014. Last year, the real estate market took a little dip in Lawrence, but it seems clear that 2015 will reverse that trend. Last year, home sales declined by about 0.2 percent. That was compared with a 17 percent increase in 2013 and a 28 percent increase in 2012. So, 2015 is on pace to return the market to more recent norms.
Here are some other numbers from the report put out by the Lawrence Board of Realtors:
• The number of newly constructed homes sold for the year have rebounded in 2015. New homes sales total 73, up from 60 at this time in 2014. However, sales of newly constructed homes continue to lag 2013 totals, when 86 had been sold at this time.
• The type of new home being constructed in Lawrence is slightly more expensive than in past years. The median selling price for a newly constructed home is $309,400, up about 1.5 percent from a year ago. It is up about $9,000 from 2013, when the median selling price was $300,620.
• The total dollar value of homes sold in Lawrence is up about 18 percent to $212.8 million.
• The median number of days a home sits on the market before it sells continues to fall. The median is now at 24 days, down from 33 last year and 42 in 2013.
• The number of homes on the market continues to fall, which real estate agents have said is depressing home sales in the city. The number of active listings stands at 317, down about 15 percent from last year and about 13 percent from 2013.
I also have one figure on real estate values. This one comes from the Douglas County Appraiser’s Office, instead of the Board of Realtors. The latest data from the appraiser’s office shows the average sale price for existing homes in Lawrence and Douglas County is $213,992 thus far in 2015. That’s up about 1.5 percent from a year ago. So, the real estate market is seeing some appreciation but isn’t going gangbusters, based on those numbers.
Large fitness center chain signs deal for big facility on south Iowa; more info on changes in the works at Genesis Health Club
Maybe they read about the pending explosion of fried chicken places coming to south Iowa Street and figured waistlines were sure to follow. Whatever the case, a new national fitness club chain has signed a deal for a large space along the south Iowa Street corridor.
Planet Fitness has reached a deal to lease 22,000 square feet of space in the shopping center that houses Office Depot at 25th and Iowa streets.
“We’re confident it will be a really good addition for the community,” said Greg Henson, managing partner for the Planet Fitness franchise in the Kansas City metro. “To us, Lawrence looks like a very health-conscious community. You have some great facilities there, but this will give people an option that will be very inexpensive.”
It sure seems like Planet Fitness is the type of player that could shake up the local fitness club market. The company has an aggressive pricing strategy. Its basic membership starts at $10 per month. Its premium membership is $20 per month, but it allows you to bring a guest with you as often as you would like. Both memberships also allow members to take an unlimited number of fitness classes at no additional charge. Plans call for the workout areas to be open 24 hours a day.
Henson said the Planet Fitness concept — his group owns seven of the clubs in the Kansas City metro — revolves around the idea that people don’t join fitness clubs for a combination of three reasons: 1. They feel intimidated in the workout area; 2. The costs are too high; 3. The clubs aren’t clean enough.
“I think people will be very impressed with the cleanliness, the friendliness, the judgment-free attitude, and it is cheap to join,” Henson said.
The club is expected to have more than 100 pieces of cardio equipment, plus weights, large locker rooms, an indoor tanning area and water massage tables, in addition to other amenities.
Henson has begun the process of applying for the necessary permits to renovate the space. Planet Fitness will be going into a portion of the former Discovery Furniture store. (Discovery moved its store to Johnson County, in case you have forgotten.) It will occupy the part of the building that is adjacent to Office Depot. If all goes according to plan, Henson hopes to have the club open this spring.
The Planet Fitness deal fills about half of the available space in the shopping center, said Christian Ablah, who is a commercial real estate broker for the project. Ablah said about 23,000 square feet remain, and interest from retailers in the property has been strong.
“We’re excited to have Planet Fitness, and we’re excited with the other retailers that are interested in the site,” said Ablah.
The deal is the latest sign that south Iowa Street continues to draw a lot of interest from retailers and others who want to take advantage of the high traffic volumes and the pending completion of the South Lawrence Trafficway. Henson said being on the south Iowa corridor was an easy decision for his company to make.
“To us, 23rd and Iowa is kind of a legendary intersection in Lawrence,” Henson said. “Everybody knows where that is at in Lawrence. Being near that intersection and having all the traffic and retailers on Iowa Street made it a really desirable location.”
In other news and notes from around town:
• Planet Fitness is entering the Lawrence market at an interesting time. As we previously have reported, Genesis Health Clubs— Lawrence’s largest fitness club provider — has reached a deal to convert the Jayhawk Tennis Center on Clinton Parkway into a fitness center. But now my understanding is the new Clinton Parkway facility will replace Genesis’ current facility at 23rd and Iowa streets.
Joe Oxler, regional director for Genesis, told me the plans were to close the 23rd and Iowa facility once the new Genesis club opens at the tennis center site, which is at 5200 Clinton Parkway in west Lawrence. Work on the tennis center site is expected to be completed in the first quarter of 2016.
Now, I talked with Oxler before the Planet Fitness deal was announced, so I suppose a change of strategy is possible, but I doubt it. The company already has purchased the tennis center site, and is excited about being able to offer a different type of club to Lawrence. The tennis center site will continue to have tennis offerings, but now will have a full complement of cardio, weights, three group fitness studios and other fitness club components.
Oxler said six of the 21 clubs Genesis operates in the region include tennis courts. He said club members enjoy the competition and workout that the game provides.
“We’re big supporters of tennis,” Oxler said.
Oxler said Genesis had tried on multiple occasions to buy the building they're in at 23rd and Iowa, but had been unsuccessful in striking a deal for the location. Genesis generally invests large amounts of money into the interior design of its clubs and prefers to own the real estate when making a large investment in amenities.
Oxler said the Clinton Parkway facility will allow for the company to make a major investment in amenities at the location. Genesis' other facility on Sixth Street recently completed a major renovation. Oxler said he thinks the new Clinton Parkway facility will appeal to some users of the Sixth Street facility, which should open up some capacity at the Sixth Street location.
“We think it will be a great move for us and also for KU,” Oxler said.
In case you have forgotten, KU has announced plans to build a new tennis facility at Rock Chalk Park as part of a public-private partnership with a development group led by Lawrence businessman Thomas Fritzel. Until that facility is complete, KU’s tennis team will continue to use the Clinton Parkway facility.
Cost of affordable housing project likely to be debated again; update on senior living project; Downtown Lawrence Inc. launches new gift card program
This is the season where I’m reminded that we definitely can have differences of opinion about the idea of what’s affordable. (This is also the season where I’m reminded that the First Amendment protects my right to have an opinion, but does nothing to keep me warm while sleeping in the garage.) All this is to say that a difference of opinion may be brewing again on an issue related to an affordable housing project.
I’ve seen a city memo that indicates city commissioners next week once again will consider allowing the Lawrence-Douglas County Housing Authority to purchase a six-unit apartment building at 1725 New Hampshire St., near Dillons, to convert into rent-controlled housing units.
If you remember, the City Commission was asked to approve the purchase this summer, but a majority of commissioners balked because they thought the $485,000 purchase price was too high. The county had the property appraised at about $180,000.
Commissioners asked the Housing Authority to get a private appraisal of the property done. That appraisal has been completed and it comes back with a value of $290,000, based on it being used as a residential property.
The proposed purchase price of the property, however, hasn’t changed from the $485,000 mark, and the Housing Authority still wants to buy the property.
A couple of things to keep in mind here: The Housing Authority is not seeking city tax dollars to buy the property. The authority has reserve funds that it gets either from federal programs or that it accumulates through rental income of its other properties. But, with the way the authority is structured, city commissioners have to sign off on any purchase of real estate made by the authority, even though city tax dollars aren’t involved.
A second point to keep in mind is the location of the property. It shares a property line with the Dillons store on Massachusetts Street. The apartment complex easily could be demolished, and Dillons could use the property for additional parking. Rob Farha, who leads the local group that owns the property, has told me Dillons has a strong interest in purchasing the property. Farha’s preference — it seems — is to keep the property residential, but he’s not willing to take significantly less than what Dillons may pay for the property.
So, commissioners find themselves with an interesting question: Do you allow the Housing Authority to essentially overpay to get more affordable housing units in its program? The Housing Authority has made several points about why it believes the property is worth the money.
— The property is adjacent to Babcock Place, a large apartment complex already owned by the authority. The maintenance staff at Babcock will be able to maintain the property. If the authority were to buy a similar property elsewhere in town, it may have to add a new maintenance staff member to care for it.
— Residents of the six-unit apartment complex may be able to use some of the amenities — like a computer lab — that are available at adjacent Babcock Place.
— Owning the property may allow for the Babcock Place parking lot to be reconfigured and reduce the number of Babcock residents that are currently parking on neighborhood streets.
— The apartment building’s location next to Dillons and other services would be beneficial to low-income residents that would live in the apartment building.
If allowed to purchase the property, the Housing Authority hopes to work out a deal with KVC Health Systems and the Department for Children and Families that would allow youth who are aging out of the foster care program to live in the apartments. The Housing Authority is proposing to charge rents that range from $300 to $600 a month, depending on the income levels of the tenants.
The request comes at an interesting time. The commission is hearing more about the issue of affordable housing. The faith-based group Justice Matters is still actively calling for more to be done on the issue, the city has appointed a task force on affordable housing, and talk of a demonstration project to prove what could be done with city resources is underway.
This project at six units isn’t that large, but it may serve as a bit of a test to determine what commissioners are willing to do to add more rent-controlled units to the community’s affordable housing inventory. The past commission seemed pretty willing to provide incentives or make other accommodations for affordable housing projects. The most prominent projects have been in the Warehouse Arts District, where the past commission provided more than $1.2 million worth of infrastructure improvements to assist the Poehler Lofts and the 9 Del Loft projects, which both are rent-controlled affordable housing projects. The projects also have received some property tax rebates.
Commissioners are tentatively scheduled to discuss the latest request from the Housing Authority at the Dec. 15 City Commission meeting.
In other news and notes from around town:
• Some of you have asked me about the construction work that is underway behind the United Way building. As we previously have reported, that’s also an affordable housing project.
Tenants to Homeowners is constructing 14 living units that will be rent-controlled units available seniors who meet the necessary income guidelines. When I last checked with Tenants to Homeowners a few weeks ago, the project was going well. They hoped to have six of the units ready for occupancy by about March and the other eight ready by June.
Rents will range from $545 to $795 per month, depending on the income of the tenants.
The project — which is called Cedarwood Senior Cottages — is at 25th and Cedarwood. It is being built on a 2.2 acre site that Douglas County previously owned. In addition to the cottages, the approximately $2.3 million project also will include a small community center that will host a new piece of technology that will allow for residents to meet with their physicians via broadband connections. In other words, it will be telemedicine in action.
• If I don’t start getting some holiday gifts bought, even telemedicine won’t be able to save me. Well, there is news of a new gift card program in Downtown Lawrence. Members of Downtown Lawrence Inc. have launched a new program that allows them to replace their old paper gift certificates with plastic gift cards like you find from most major retailers these days.
Sally Zogry, executive director of Downtown Lawrence Inc., said Downtown Lawrence Inc. traditionally sells more than $100,000 in gift certificates each year. But the association has been looking for a way to make the program more efficient. With the old paper certificate, when shoppers redeemed the certificate, any unused amount was returned to the shopper in dollars and cents. That meant that money may not end up getting spent in Downtown Lawrence. The new card program, much like at any other retailer — keeps the unused balance on the card, meaning that money will have to be spent at participating retailers. The cards can be redeemed at more than 100 downtown businesses, Zogry said.
Lawrence is a top 10 city when it comes to being a landing place for college students, according to a new ranking.
The financial website WalletHub has ranked Lawrence as the No. 10 small city in the country for college students. Lawrence also ranked No. 24 in the country across all city sizes, according to the study that was released today.
In a study titled Best and Worst College Cities and Towns in America, the folks at WalletHub attempted to measure which communities “promise the best combination of academic, social and economic opportunities for students.”
The study pegged Lawrence as No. 10 in the list of cities with populations of 125,000 or less. Communities had to have at least 7,500 college students as residents to qualify for the study. No. 1 on the list of small cities was Ann Arbor, Mich., home to the University of Michigan. A few college communities from the region also ranked high on the list. Iowa City — which is led by one of the three candidates for the Lawrence city manager’s position — ranked No. 3 on the list of best small cities, and Columbia, Mo., was No. 6. Lawrence was right between Athens, Ga., at No. 9 and Davis, Calif., at No. 11. Lawrence ranked ahead of regional communities such as Boulder, Colo., at No. 13, Norman, Okla., at No. 18 and Greeley, Colo., at No. 51.
It should be noted that the study isn’t comprehensive. For example, Manhattan, for some reason, wasn’t ranked. It has enough students to qualify, but I think statistics weren’t available for some of the smaller communities in order for WalletHub to rank them on all 22 metrics it used to create the study.
The report looked at factors such as average rental costs, tuition costs, number of students per 100,000 people, number of nightlife options per capita, crime rates, educational rankings for universities in the community, job growth rates, the number of graduates who move out of the community, and several other factors.
The report provided a few individual statistics for Lawrence. Here’s a look at how the community ranked in several categories compared with the 116 other small cities that made the list. A score of 1 is best, while a score of 58 ranks as average:
— No. 10 — Percentage of part-time jobs in the workforce
— No. 14 — Number of students per capita
— No. 17 — Quality of higher education
— No. 23 — Number of nightlife options per capita
— No. 24 — City accessibility, which measures public transportation, walkability and other such factors.
— No. 26 — Cost of higher education
— No. 40 — Adjusted cost of living for young people
— No. 41 — Brain drain, which measures the number of college graduates moving from the community.
As I mentioned earlier, the study also includes an overall ranking, which rates cities regardless of size. Lawrence finished No. 24 — out of 326 — in that ranking. Ann Arbor, Mich., finished No. 1 in the overall ranking. That overall ranking included several Kansas communities that have at least 7,500 students living within the city limits. Here’s a look at the ranking for several cities across the state and the region.
— No. 3 — Iowa City
— No. 8 — Austin, Texas
— No. 10 — Columbia, Mo.
— No. 11 — Champaign, Ill
— No. 14 — Madison, Wis.
— No. 26 — St. Louis, Mo.
— No. 28 — Fayetteville, Ark.
— No. 29 — Boulder, Colo.
— No. 31 — Fort Collins, Colo.
— No. 46 — Lincoln, Neb.
— No. 49 — Norman, Okla.
— No. 54 — Waco, Texas
— No. 65 — Lubbock, Texas
— No. 84 — Tulsa, Okla.
— No. 101 — Kansas City, Mo.
— No. 108 — Omaha, Neb.
— No. 114 — Springfield, Mo.
— No. 116 — Overland Park
— No. 120 — Oklahoma City
— No. 143 — Olathe
— No. 191 — Wichita
— No. 213 — Topeka
Commissioners faced with big questions, high stakes as they prepare to decide fate of south Iowa shopping center
When Lawrence city commissioners meet on Tuesday, the shopping fanatics among us are going to be asking questions of whether Lawrence soon will get an Academy Sports, an Old Navy and a host of other big retailers that appear ready to move into a new shopping center proposed for south of the SLT and Iowa Street interchange. But commissioners will be facing larger questions than those.
Commissioners are set to decide the zoning issues related to the proposed KTen Crossing project, a 250,000 square-foot retail center slated for the southeast corner of the SLT and Iowa Street interchange. I don’t want to be overly dramatic here, but whether the commission decides to kill this project or let it proceed does come with some fairly high stakes.
Last month I wrote about some new numbers that create some questions about downtown Lawrence and its future as a major retail center. Commissioners will have to keep that issue in mind. But there are plenty of other numbers out there that create questions too. It will be interesting to see if the commission views this proposed project mainly on its own, or whether it tries to answer some bigger picture questions along the way.
What are some of those bigger questions? Well, here’s a look:
• Why are Lawrence shoppers spending less now than they used to? The city’s most recent retail market study provided a lot of statistics on sales tax collections. One part of the study looked at sales tax collections adjusted for inflation. In 2014, the city’s 1 percent sales tax collected $14.4 million. When adjusted for inflation, the city in 2004 collected $14.3 million. In other words, when you take inflation out of the equation, Lawrence’s retail sales from 2004 to 2014 grew by a meager 0.6 percent.
To compound the issue, that is despite the fact that Lawrence had population growth during that time period. According to the city’s figures, there were about 9,100 additional people living in Lawrence in 2014 than in 2004, and yet, true retail sales growth was basically flat. The city’s per capita sales collections fell from $164 in 2004 to $149 in 2014.
One obvious answer could be that the Great Recession did take place during this decade in question. People did clamp down on their spending. Maybe this drop-off is similar to what every other city experienced. The city’s retail market report doesn’t provide information on whether other cities had such a drop-off.
But there are other numbers that create concern that more may be at play here than the recession. The further you look back at the numbers, the worse the picture looks. From 2000 to 2008 — a period where the economy was humming — per capita sales tax collections dropped from $178 in 2000 to $156 in 2008.
Another answer may be that Lawrence residents are just making less money, so they are spending less money. That, however, is not what’s the city’s numbers show. The retail market study lists per capita income numbers that also have been adjusted for inflation. The most recent data is for 2013. It shows income levels from 2003 to 2013 grew by 5.8 percent, after inflation. It is certainly debatable whether that is a healthy amount of income growth — it is about a half-percent a year, after inflation — but it is accurate to say that Lawrence residents had more money in their pockets.
Of course, a third answer is that more Lawrence residents are shopping out of town as the number of retail shopping outlets in the Kansas City and Topeka markets have grown at a faster pace than the number of shopping options in Lawrence. Obviously, that is the answer the development group for KTen Crossing wants the city to land on.
Just to be clear, I don’t know the answer to the question, but it sure seems like an important one for the City Commission to figure out.
• How big of a player does Lawrence want to be in the retail world? The state produces a statistic called a trade pull factor for every major city in the state. It is basically a way of comparing a community’s per capita sales tax collections with the statewide per capita sales tax collections. It is not a perfect statistic, but it is a quick way to see if you are keeping up with the Joneses.
The most recent pull factor for Lawrence shows we’re at 1.04, which means our per capita sales tax collections are 4 percent better than the statewide average. Should commissioners be happy with being 4 percent better than average? That’s clearly a judgment call.
Lawrence is the largest city in the fifth largest county in the state. Lawrence, however, is not near the top five when it comes to pull factor rankings. Of the 25 first class cities in the state — a term used to describe some of the larger cities in the state — Lawrence ranks No. 16. Lenexa leads the pack. It is 55 percent above average. Some others of note: Overland Park is 43 percent above average; Topeka 32 percent above average; Manhattan 29 percent above average; Olathe 16 percent above average; and Wichita 12 percent above average. The two cities closest to Lawrence are Emporia at 8 percent above average and Coffeyville at 2 percent above average.
This is a one-year snapshot, which is not ideal. But, I have watched these numbers over the years, and Lawrence has always struggled to rank very high on the list. Some would say there is a reason that has been the case: our geography. Lawrence struggles to rise on the list because the draw of Kansas City and Topeka shopping is always going to depress the amount of shopping that occurs in Lawrence.
At some point, city leaders need to determine how much they buy into that argument. How far above average can Lawrence be? How much can we convince Lawrence shoppers to shop locally? Developers of the proposed shopping center are arguing this development will help keep shoppers in Lawrence, and may bring in some new shoppers from outside the city, most notably from Franklin County to the south.
Again, I don’t have the answer, but it appears Lawrence needs to figure out how much it wants to compete for the retail dollars in the region.
• How do we want to tax ourselves? Cities usually get most of their money to pay for basic services through sales taxes and property taxes. Communities that rely heavily on sales taxes feel one way. Communities that rely heavily on property taxes feel a different way. Usually, communities have a strategy for what type of mix they want to have when it comes to sales and property taxes.
My perception of Lawrence city government over the last 20 years is that there had been a desire to make sales taxes a greater part of the mix in order to provide some property tax relief.
There is some evidence that was the case at one point. In 1995, the total number of dollars in the city’s general fund budget that came from sales tax collections were 38 percent. That percentage steadily grew over the years. I think the high point came around 2002 — I might be off a year or two — when 47 percent of budgeted general fund revenues came from sales tax dollars. By 2005, that number dropped to 44 percent. In the 2015 budget, it has dropped to 40 percent.
Again, I don’t know what the “right” number is for Lawrence. But I think it is important to note that our revenue strategy in the city is changing. Has it been intentional? What are the consequences of it? For instance, has our changing tax structure played a role in the affordable housing issue that community leaders are discussing? It seems that city commissioners need to figure out whether these numbers cause them any concern and, if so, whether they think increasing the supply of retail options in the city will help change those numbers? It is a big question, and a tough one.
The question that many folks are probably most interested in is whether this shopping center proposal can win three votes at the City Commission? It is uncertain. My view, for whatever that is worth is that Matthew Herbert is a strong yes and Leslie Soden is a likely no, based on comments both of them made during the campaign earlier this year.
I chatted earlier this week with Commissioner Stuart Boley. He told me he’s open to the proposal, which I think means he hasn’t made up his mind yet. He did note that he’s uncertain how much this development will end up costing the city. The development is not asking for financial incentives like tax increment financing or special taxing districts. But Boley mentioned items like the cost to extend water and sewer service to the site and road improvements.
I had City Hall reporter Nikki Wentling ask the development group about that issue while she was covering yesterday’s informational meeting about the project. The group told her that it plans to pay “its fair share” for those infrastructure costs. Often, development groups form a benefit district, where all property owners in the district that will benefit from the extension of utility services will pay a portion of the costs. The city sometimes pays a portion too, but not always.
But it is worth noting that the city has already annexed the property, which means it is in a poor position to argue that it is too costly to extend basic utility services to the site. If the city felt that way, the normal course would be to not annex the property.
Then there is Mayor Mike Amyx. I think he is struggling with an issue that several people are. Based on conversations I’ve had with him, I think he doesn’t want Lawrence to become too out of balance geographically in its retail offerings. If this project proceeds, how much more difficult will it become for a retail area to develop around the Rock Chalk Park property in northwest Lawrence? That is a question that people are struggling with. But on the flip side of that coin, people also are struggling with the fact that the property around Rock Chalk Park has been available for retail development for a number of years now, and the retailers just have not come to the table.
Amyx told me earlier this week that if his crystal ball was working better that this would be a much easier decision.
Chamber releases year-end number on new jobs; discussion about environmental issues with Menards project
You can tell we’re getting close to the end of the year because the numbers are starting to pile up. And I’m not even talking about the fact the credit card statements are now coming on oversized pieces of paper to contain all the zeros. No, groups and organizations are starting to put out their year-end statistics. The latest is a report from the Lawrence chamber of commerce touting positive job growth totals.
Leaders with The Chamber hosted a meeting for about 40 key investors in the economic development arena on Wednesday afternoon, and the headline number from that event was 484 jobs. That’s the number of Lawrence jobs that are expected to be created as part of new companies that The Chamber has helped recruit to town in the past year.
“2015 has been a fantastic year,” said Larry McElwain, president and CEO of The Chamber. “It will be a hard act to follow in 2016.”
The three companies that are accounting for the projected 484 new jobs are: USA800, the call-center company that we reported in July was moving into the I70 Business Center in North Lawrence; Integrated Animal Health, which we reported in April was moving its world headquarters to the Bioscience & Technology Business Center on KU’s West Campus; and Midwest Manufacturing. As we reported last week, the company is part of home improvement retailer Menards, and it plans to build a production plant in Lawrence’s VenturePark.
Other numbers cited by the chamber include $19.8 million in new payroll that’s expected to be created by the three companies and $28.6 million in new capital investment that will be generated by the companies.
The numbers, though, should come with a fairly significant asterisk. The Menards deal — and the 100 jobs anticipated with the plant — isn’t yet a done deal, and economic development leaders were highlighting that fact at Wednesday’s meeting.
“The announcement took place, and that is a victory, but it is not done yet,” said Brady Pollington, vice president of the Economic Development Corporation of Lawrence and Douglas County, which helped broker the deal. “We still need support from the community.”
The project, and its related financial incentives package, has thus far been well received by community leaders. Chamber officials on Wednesday did acknowledge that there likely will be some community discussion about Menards’ record on environmental compliance at other locations around the country. City Commissioner Leslie Soden briefly raised the issue at Tuesday night’s City Commission meeting, at which commissioners unanimously agreed to accept Menards’ application for a tax abatement and other incentives.
McElwain said he was pleased that Soden raised the issue. He said the environmental issues should be examined, and he predicted they won’t end up being a major issue for the project.
“We have absolutely no concern on the environmental front,” McElwain said. “We think this is a good company, and our process is very well designed to deal with any concerns that people may have.”
To back up, concerns about environmental issues related to Menards primarily are coming from some folks who have commented on this website and others about some violations in other jurisdictions that show up when you do a Google search for the company and its environmental record. I’ve asked City Hall reporter Nikki Wentling to look into the issue further to see what environmental issues have arisen elsewhere with Menards. We’ll let you know what we find.
Soden brought it up at Tuesday’s meeting because she said she had heard some concerns expressed by some residents. She felt it was important to let people know that the city will examine the issue.
“I think it would be good to let people know that we do have things in our performance agreement that would address something like that,” Soden said.
The city requires any company receiving a tax break to sign a contract that it calls a performance agreement. Among the issues in a performance agreement is a statement that the company will operate in a manner that follows applicable laws and regulations. If the company doesn’t, the city has the option of reducing or eliminating the tax abatement given to the company.
As reported on Tuesday, commissioners unanimously agreed to accept the tax abatement application from Menard Inc., which means the incentive request will now go to a city-appointed review board that makes recommendation on such matters.
While Soden brought up the environmental issue, she also made it clear that she’s looking favorably upon the potential Menards project.
“I’m really excited about this,” she said. “I think it is going to be great.”
Other information The Chamber shared at Wednesday’s event at Maceli’s included:
• As we previously have reported, General Dynamics is going through a large hiring phase at its customer service center at the East Hills Business Park. McElwain said the company is in the process of trying to hire 2,000 employees for the center, which provides customer service for a variety of government programs.
• A private fundraising campaign to raise money for economic development initiatives is on pace to raise $750,000 over a three year period. Bonnie Lowe, chief operating officer for The Chamber, said the campaign is in its second year and pledges are coming in on budget. McElwain told the crowd that planning would soon begin for creating a new capital campaign that will stretch beyond 2016. The Chamber estimated it has spent about 70 percent of the proceeds so far on increasing marketing efforts to bring new companies into the community.
• McElwain said work is beginning to identify some sites in Douglas County that would be appropriate for future industrial development. If the Menards deal is completed, that will significantly reduce the amount of property available for industrial projects.
“We’re selling roughly a third of what is available out at VenturePark for that deal,” McElwain said. “There are some of us looking at more tracts of land for expansion at a later date. We hope to have conversations with the city soon. We’re trying to take a 30,000-foot view of what is possible in Douglas County.”
As anyone who has ever tried, failed and perhaps had to use a stomach pump will tell you, there is a definite art to brewing beer. So, it makes sense that a new brewery will be located in East Lawrence’s Warehouse Arts District. But plans filed at City Hall not only show a new brewery, but also are proposing another multistory building for the district near Eighth and Pennsylvania streets.
A pair of Lawrence businessmen have filed plans to convert the old SeedCo building at 826 Pennsylvania St. into a brewery, restaurant and apartment building. The renovation plans include adding two stories to the old building, which is just south of the recently renovated Cider Gallery. Here's a look at a couple of concept designs that have been submitted to the city for consideration.
Let’s start with the beer. Longtime liquor executive Matt Williams is planning to open the Lawrence Beer Company on the ground floor of the old industrial building. Plans call for the company to have space to brew about six varieties of beer, plus operate a restaurant. In other words, it will be a full-scale brew pub, although Williams said it won’t have as extensive a menu as, say, Free State Brewery in downtown.
Williams said plans call for a lot of outdoor seating areas, a simple kitchen, and a vibe that fits in with the growing arts district, which also is home to several small startup companies that have offices in the adjacent Cider Gallery building.
“I really love all the creativity and passion that comes with a small brewery,” said Williams, who has worked for a branding company that works with breweries across the country, and before that was in the liquor distribution business. “We will be a real family-friendly place. We just want to be a good place where people of all ages can feel comfortable to come and spend some time.”
As for the beer, Williams said Lawrence Beer Company — which also will brand itself as LBC — plans to be “pretty straightforward.” That means a focus on beers that appeal to a wide segment of the market rather than highly stylized brews that are aimed at the beer geeks of the world. But Williams said the brewery does plan to include several seasonal beer varieties as part of its offerings.
Now, for the apartment part of the project. Williams is partnering with Lawrence businessman Adam Williams — they are not related — to build a mix of 14 one- and two-bedroom apartments at the site.
Lawrence-based architect Paul Werner has designed plans to add two stories onto the building, which dates back to the early 1900s. The development group is arguing that the two-story addition actually will improve the historical integrity of the Warehouse Arts District because the building once was 2.5 stories tall before a previous owner removed them. I think there was a fire that caused the removal of the upper floors, although I’m not certain. (I am certain that my experiments with brewing didn’t cause that one.)
The development group says the 14 apartments are an important component of the project. Getting more people living in and near the warehouse arts district is an important part of creating more business activity in the district.
The project will have to win multiple approvals from City Hall. But if the project does move forward, it will be just the latest sign of momentum for the district. If you are not familiar with the district, it has the Poehler Lofts building, which converted an old warehouse into rent-controlled apartments, and it has the new 9 Del Lofts project that also are rent-controlled apartments housed in a brand new multistory building near Ninth and Delaware streets.
Both those projects received significant financial incentives from City Hall. I haven’t seen a request yet for financial incentives for this project, but I also didn’t check with Williams about that specifically. I’ll let you know if I hear any plans for an incentive request for the project.
It also will be key for the development to win some support from East Lawrence residents. Some East Lawrence residents have been fighting a proposal for a small bar and bistro to be installed in a small stone building near the corner of Eighth and Pennsylvania streets. There has been concern the use could become too much of a bar.
Williams said his group already has had preliminary discussions with the East Lawrence Neighborhood Association, and is working to assure the group that it plans to run a neighborhood-friendly establishment.
“We’re not going to be a night club,” Williams said. “We’re probably looking at a closing time of 10 p.m. on weeknights and midnight on weekends.”
If the city approval process goes well, Williams said he hopes to have the project up and running by early September.
Details on new restaurant slated for Round Corner Drug building; city to settle sidewalk dining flap; update on downtown moves
One of downtown’s more iconic buildings is set to be back in business soon. As we’ve previously reported, the former Round Corner Drug building is set to become a restaurant. Now, I have more details after talking with the owners of the new establishment.
Kansas City restaurateurs Zach Marten and Bret Springs hope to have RND Corner Grille open by late next week. The duo told me the restaurant will be a classic American grill, and one of the features of the business will be the old building itself.
The Round Corner building, if you don’t know, is located at the southwest corner of Eighth and Massachusetts. The building dates back to 1866, and for most of those years it housed a drug store. When Round Corner Drug closed in 2009, it was the longest running pharmacy in the state.
Marten and Springs wanted to play up some of that history. The pair had an approximately 20-foot long mural commissioned for an inside wall of the restaurant. The mural is based off of a 1911 photo that shows Woodard Drug store on the corner and a trolley vehicle in the street.
“We really wanted to create a design that highlights the building,” Springs said. “It is such a great building and we wanted to do something that was a bit of tribute to what has been here before.”
During the remodeling process, crews actually found an old porcelain sign advertising Round Corner Drug. It will be incorporated into the building’s interior. The interior of the building has undergone some changes since it was last used as Intorno, a short-lived Italian restaurant. The duo has added a new bar in the center of the room and rearranged some other spaces.
The pair hopes to create a casual atmosphere but something more upscale than your traditional sports bar and grill. In fact, they have a specific feel in mind.
“It is a restaurant, but we also really want it to feel like a hotel lobby bar where you can feel comfortable hanging out,” Springs said.
(No word yet on whether it will be the type where you are expected to tip the bellboy for giving you a ride back to your room on the luggage cart. I’ll let you know what I find out on that.)
As for the food and drink at RND Corner Grille, the bar will have 16 taps of beer, with a heavy emphasis on craft brews. Four of the taps will be seasonal that rotate often. Classic cocktails and a selection of wines also will be offered.
I didn’t get to see the full menu, but I’m told it includes a variety of sandwiches — a dish called Grandma’s Chicken Salad Sandwich is included — but there’s also some dishes that are a bit beyond the normal grill menu. For example, the appetizer menu includes a spread of smoked trout, and several entrees feature salmon, duck and trout, in addition to more traditional offerings like chicken and beef. Salads also will be part of the menu. The restaurant has hired Danny White, a former chef from The Capital Grille, to run the food operations. Prices are expected to be about $9 to $15 for lunch and about $12 to $25 for dinner. Eventaully, the pair — which operate Coal Vine on the Country Club Plaza and Westport Ale House in Kansas City — plan to offer a weekend brunch menu too.
“We’re going to work really hard to create the right atmosphere,” said Marten, who is familiar with Lawrence through his time as an undergrad and a law student at KU. “You can have a good meal with no ambiance, but when you have a good meal with good ambiance it really makes the experience so much better.”
Look for one significant change in 2016 that will add a different feel to the restaurant. Marten said the business has won approval from the city to install tilt-up windows along the north wall of the restaurant. That means the restaurant essentially will become an open-air establishment during certain times of the year. The tilt-up windows will allow free flow between the indoor space and the sidewalk dining area on the north side — the Eighth Street side — of the building.
The group tried to win the same approvals for the eastside windows that front along Massachusetts Street, but that proposal didn’t meet the city’s design guidelines for the historic district. Other downtown restaurants also have tried unsuccessfully to bring that open-air idea to Massachusetts Street, but have been turned down. If I’m remembering correctly, RND Corner will be the first downtown restaurant to install the specialty windows and try the open-air concept. It will be interesting to watch how that works, and whether city officials get more pressure from other restaurants to allow the concept on Massachusetts Street.
In other news and notes from around town:
• While we’re on the subject of possible changes to the streetscape on Massachusetts, city commissioners tonight will settle a dispute about whether an arch should be allowed in the downtown.
No, don’t call the moving truck just yet. We’re not becoming St. Louis with its odd pizza and a baseball team that hasn’t even won the World Series since 2011. It is not that type of arch. Instead, Jazz, the new restaurant that we previously reported opened in the former Buffalo Wild Wings spot, wants to install a wrought iron arch near the entrance of its sidewalk dining area.
City planners and the city’s Historic Resources Commission have both denied the project, saying it doesn’t meet the downtown’s historic design guidelines. Officials with Jazz are appealing the decision to the City Commission.
Here’s a look at the arch when it was temporally installed in front of the downtown restaurant:
As part of the denial, the city found that the proposed arch was not compatible with the architectural building design, and “was not in character with Lawrence’s downtown.” Officials with Jazz, as part of their letter appealing the denial, said they hope the City Commission can view the arch as "the piece of art that it is.”
If commissioners approve the arch, it will be fun to watch what ideas other restaurants in downtown have for drawing more attention to their locations. The downtown restaurant world is very competitive, and operators are always looking for a way to make their properties stand out.
Commissioners meet at 5:45 p.m. today at City Hall.
• Last week I reported on a few closings or pending closures of some downtown businesses. I’ve got a little bit more information to pass along about what may be coming in a couple of the spaces that soon will be vacated.
At Foxtrot, 832 Mass, store owner Caroline Mathias told me her understanding is some sort of interior/home store is going to occupy the space. I’ve also heard that from another downtown source, but I don’t have further details on who the new retailer will be. But I’ll keep my ears open. As for Foxtrot, the shoe retailer is expected to close by the end of January.
Another business we reported on was Mass Street Sweet Shop, which has closed at 727 Massachusetts. It looked like there was some work already underway there. A downtown source told me that location is going to house one of the escape room businesses that we previously have reported on. In case you have forgotten, there are two business people in town planning on opening escape room businesses, which is an entertainment venue that revolves around putting people in a themed room and giving them elaborate puzzles and tasks to solve to unlock the door in a certain period of time. I’m not quite clear on which one of the two escape room businesses will be locating in that space, but I’ll do some more checking.
Request for tax break on downtown project to create debate; a closer look at supposed parking problem in downtown
All we’ll need on Tuesday night at City Hall are the "Solid Gold" dancers because I suspect commissioners will hear a couple of classic tunes: a debate about downtown parking and questions about whether the city is business-friendly enough.
Commissioners at their Tuesday evening meeting are set to finally hear an incentives request for the proposed remodeling of the Pachamamas building at Eighth and New Hampshire streets. As we previously have reported, a development group led by Lawrence businessmen Doug Compton and Mike Treanor have plans to add four stories onto the existing one-story restaurant building. The four new stories would house about 55 apartments, while the ground floor would continue to be used as a restaurant, although a tenant hasn’t yet been found.
I say the commission is “finally” going to hear the incentive request because this item has been sitting in the commission’s to-do box for awhile. The development group asked for the approximately $300,000 in incentives — the city is being asked to exempt the project from paying sales taxes on construction materials — in May.
The city’s Public Incentives Review Board recommended in August that the incentive request be approved, but Tuesday night will be the first time the commission deals with the issue. That delay probably is not a good sign for the development group. Commissioners have been known to delay taking action on items that they really don’t want to do.
Bill Fleming, a Lawrence attorney who is representing the development group, told me he expects an uphill battle with the commission.
The tea leaves are not hard to read on this one. In April, voters elected Leslie Soden, Stuart Boley and Matthew Herbert to seats on the commission. All three campaigned on the idea that the city had been too loose with its tax incentives, with some of them particularly noting that apartment developers don’t need any incentives to build in Lawrence.
There’s one problem, though, Fleming says. The city’s economic development policy says otherwise. He notes that the city’s policy specifically talks about providing industrial revenue bonds to residential projects. The policy lists three preferred qualities for residential projects to receive the sales tax exemption that the project is seeking: 1. An infill or redevelopment project; 2. A mixed-use project; 3. A downtown location. A City Hall staff report notes the Pachamamas project meets all three of the preferred qualities.
As you may have guessed, this is where the argument about whether the city is business friendly enough is likely to begin.
“The city expects us to follow all their processes and procedures, so we we expect the city to follow its own process and procedure,” Fleming said. “The reason you have a policy is to send a message that if you do these things, we’ll do these things in return.”
Of course, policies can change, and that may be what is set to happen on Tuesday. Fleming, however, will argue that if the city changes its policy, it shouldn’t change for projects that are already in the pipeline. Changing the rules in the middle of the game has been a longtime rallying cry for folks who believe the city isn’t business friendly enough.
It will be interesting to watch what the commission does. This particular type of incentive — an industrial revenue bond that allows construction materials to be bought sales tax free — has been used a lot. In fact, here’s a number to help you remember just how much: $9.5 million. That’s about how much sales tax the state, city and county have given up since 2010 as a result of this incentive program.
The city put together a handy list of projects that have used the IRB sales tax exemption since 2010. The projects have totaled almost $212 million. The city uses a rule of thumb that about half of a project’s costs are related to building materials. That would mean about $106 million worth of construction materials were purchased with a sales tax exemption. At the current sales tax rate of 9.05 percent, that’s about $9.5 million in sales taxes that went uncollected. (I concede that the sales tax rate has been lower than that at times during 2010 to 2015 period, but there is only so much math I will do on a Monday morning.)
Now, folks at City Hall quickly will point out that not all of that money would have ended up in city coffers. The city only gets a portion of total sales taxes collected. The local sales tax rate — the city and county combined — is 2.55 percent. That calculates to $2.7 million in sales taxes that didn’t end up in the city or county’s coffers. That’s a little more than $500,000 a year that local officials would have had available for spending, if the exemptions weren’t granted. Of course, on the other side of the ledger, the community has more than $200 million worth of new projects, which surely are creating some benefits.
A question that is tough to answer, though, is whether any of those projects would have not proceeded if they would have been forced to pay sales taxes on their construction materials. Unlike some other city incentive programs, this one doesn’t make the builder show that the project would be unfeasible without the incentive.
We’ll see what type of line this relatively new City Commission takes on Tuesday. It will be a night where we will learn something about the economic development philosophy of commissioners.
• I’m also predicting a parking debate as well. That too is related to the proposed Pachamamas renovation. Plans call for adding about 55 apartments to the building, but there are no plans to add any private parking as part of the development.
Downtown zoning regulations don’t require developers to add parking as part of their projects. The city provides thousands of public parking spaces downtown. Regardless, several downtown projects have built parking as part of their projects. This development group has built underground parking garages for the Marriott at Ninth and New Hampshire and also is building a garage as part of the multistory office/apartment building under construction at the northeast corner of Ninth and New Hampshire. It also is worth noting, however, that both projects asked for and received much larger public incentive packages to help cover the cost of constructing underground parking.
You may be asking yourself, where is everybody going to park as part of this new project? A City Hall report is indicating it shouldn’t be that big of a problem because it points out a fact that often gets overlooked: Finding a parking spot in downtown Lawrence isn’t hard, if you are willing to walk just a little bit.
And the report found the area near the proposed Pachamamas site has a particular abundance of empty public parking spaces. The report broke downtown into quadrants. The northeast quadrant — everything north and east of Ninth and Massachusetts — has an average of 157 vacant, long-term parking spaces each weekday. During the evening hours, it is even higher.
The report serves as a reminder that the city is paying for some public parking lots that barely get used. Lot No. 16, which is the parking lot right at the entrance to the Riverfront Parking garage, has an average vacancy rate of 98 percent at any time of day, the report found. The Riverfront garage itself has a lot of 10-hour parking spots that aren’t being regularly used. It has about a 45 percent vacancy rate during the daytime hours and about 87 percent vacancy rate during the evenings. That’s a multimillion dollar structure the city built. It is even emptier on the weekends with about a 90 percent vacancy rate on the 10-hour spaces. Figuring out how to get people to pay to park in those spaces — you can buy an annual parking pass from the city for all 10-hour lots — would seem to be in the interest of the city. The city is spending money every year to maintain the parking lots.
Those two parking lots provide more than enough space to handle the approximately 55 new apartments that are proposed as part of the Pachamamas remodel. But both those lots will require a little bit of walking for tenants. I’ve timed the walk. It is five to six minutes, depending on which lot you park in. It is basically a walk of about two blocks.
Don’t get me wrong. I don’t know whether this project deserves a tax incentive or not. But I find the parking issue pretty interesting. Lawrence is spending lots of money on trails, bike lanes and other infrastructure to get people to walk more and rely on vehicles less. This proposed apartment project is making a pretty big bet that there are people in Lawrence who really want that lifestyle. They’re proposing to rent apartments that don’t guarantee you a parking space, and may require you to walk five minutes to get to your vehicle.
It will be interesting to see if that is successful in the Lawrence marketplace. But first, it will be interesting to see if city leaders embrace the idea, or whether the idea of a two-block walk is too onerous.
There are some things that never change in downtown Lawrence — both Santa and my F150 getting stuck on the roof of Weaver's are a couple of items that come to mind. (Hey, sometimes you have to get creative when parking downtown.) But for the most part, downtown is full of change, particularly at the end of the year as many business leases expire. This year is no different, and here’s a look at some of the changes already starting to surface.
— M. Street Interiors will be leaving its downtown location of 825 Massachusetts St. at the end of January. The business, which sells furniture, home accessories and offers interior design services, will be moving into a vacant space at Sixth and Wakarusa in west Lawrence.
The business will continue to be called M. Street Interiors, despite it no longer being on Massachusetts. (It will be near Wakarusa, though, and the female owners of the establishment could easily blame a man for hanging the W upside down, and many people would believe it.)
“We really wanted a space where we could get everything on one floor,” said owner Donna Steinman, noting that the current store has merchandise on multiple levels. “And parking spaces for us will be great.”
The new location will have about 5,700 square feet of space, all on one level.
The new location will be in a portion of the space that used to house Googols of Fun at the shopping center on the southwest corner of Sixth and Wakarusa. For those of you who are only able to take directions in Lawrence via bars and restaurants, it is in the same shopping center as Six Mile Chop House and Salty Iguana and others.
Renovation work is underway on the space. Steinman hopes to be open in the new location by early 2016. The shop has been in downtown Lawrence for five years, and there are mixed emotions about leaving.
“I hate the idea of leaving downtown, but it is just not the right spot for us anymore,” said Natashia England, lead designer for the store.
Steinman said she thinks downtown retailers that don’t cater to college students are having a harder time in downtown Lawrence. With the pending opening of the South Lawrence Trafficway — the Bob Billings interchange opens next month and the full bypass is scheduled to open late next year — she thinks west Lawrence retail areas are going to become a more viable option for businesses like hers that attract Kansas City and Topeka shoppers.
M. Street’s current location, which is next door to The Phoenix Gallery is currently for lease. No word yet on possible tenants to take the sizable space.
• The downtown shoe retailer Foxtrot, 823 Mass., is set to close by the end of January. Store owner Caroline Mathias told me her five-year lease on the storefront is set to expire, and she wasn’t ready to sign a new lease.
“But it has been a great experience, for sure,” Mathias said.
Mathias said she doesn’t have any plans to reopen the store in another location. She said she’s still considering her options for the future.
On the subject of downtown retailing and its current health, Mathias said she hadn’t drawn any firm conclusions from her experience.
“I know for me what was helpful was always focusing on carrying unique items that you couldn’t find in the big box stores,” Mathias said.
Mathias said the store plans to start placing items on sale in December, and the store will close before the end of January, if inventory levels become depleted.
• Somehow, I think a dentist is to blame for this next one: It sure appears Mass Street Sweet Shop has closed. The business at 727 Massachusetts has its windows covered, the door is locked, and no one answers the phone. Granted, that is exactly what I do when I find myself alone in a room full of candy, but I think in this case it is a sign that the business has shut its doors. The business carried a variety of hard candies, chocolates, ice cream and other novelties. The business, according to an old article of ours, opened in late 2012. No word yet on what may occupy the space.
Development group begins lobbying for approval of south Iowa retail project; new grocery store proposed for project
Trust me, I’m used to shopping centers doing outreach efforts at this time of year. (If I had a dollar for every letter addressed to Mr. and Mrs. Lawhorn telling us the shopping center has reserved a special parking spot for our U-Haul trailer . . . ) But what’s going on in Lawrence currently is a little different. A potential shopping center has started an advertising campaign in hopes of convincing city commissioners to allow the new shopping district to open in Lawrence.
The project in question is the 250,000 square-foot shopping center proposed for the southeast corner of Iowa Street and the SLT interchange. The North Carolina-based group proposing the shopping center has changed the name of the proposed center, started a website and Facebook page to lobby for the community’s support, has started running advertisements seeking the public’s support, and has set up a community luncheon meeting for next month to talk about the project.
The project is tentatively scheduled to go before the Lawrence City Commission on Dec. 8 for a key zoning vote. If commissioners don’t approve the new zoning, the proposed shopping center can’t move forward.
So, here’s a look at some of the new developments with this project:
— The new name of the proposed shopping center is KTen Crossing. The project used to be called Southpoint. The new name plays up the proposed center’s location along the South Lawrence Trafficway, which also is Kansas Highway 10.
— The development group is floating the names of some new retailers that it is working with on the project. The Fresh Market and Off Broadway Shoe Warehouse are the two new names I’ve noticed. The Fresh Market is a high-end grocery chain that caters to food connoisseurs and others looking for fresh meat, seafood, produce and other items. The chain’s website touts its large selection of specialty coffee, deli and cheeses, bulk food section, prepared food items, a floral and gift department and, importantly, a candy department that touts a large selection of fine chocolates. (This would be good news for the car dealers in town because I would need a larger truck to pull the U-Haul trailer.) The chain has a store in Overland Park.
Off Broadway Shoe Warehouse is an interesting addition to the list. Previously, the development group had said it was working with Designer Shoe Warehouse. But that was months ago, and perhaps Designer Shoe Warehouse has moved on. Does that mean Designer Shoe Warehouse has scratched Lawrence off its list, or does it have plans to locate elsewhere in Lawrence? That has happened with at least one business the development group was working with. The group was working with Ulta Beauty, but when delays to the project emerged, it shifted gears and located in the shopping center that houses Dick’s Sporting Goods at 27th and Iowa. As for Off Broadway Shoe Warehouse, it is a Charlotte-based chain with about 75 locations across the country. Its selling point to customers is that it has 30,000 pairs of shoes to offer.
The development group on its website also touts a couple of other retailers that we already have reported are interested in the proposed shopping center: Old Navy and HomeGoods. The website isn’t touting Academy Sports, which the group previously has said is interested in the site. I talked this morning with Chris Challis, a representative of the development group, and he said Academy is still very much in the mix on the site. He said Academy hasn’t backed away from the project, but also hasn’t made a final commitment.
— Every good lobbying effort needs a statistic that you can sink your teeth into. The development group is touting this one: Approximately 40 percent of every dollar spent by Lawrence residents on fashion and home furnishings is spent outside of Lawrence. I’m assuming that number comes from a retail study the development group has conducted. I’ve done nothing to vet that number. But it is an interesting one. It seems like it is one that city commissioners should be interested in. It seems like it would be worthwhile for the commission to determine whether that number is accurate and, if so, whether it is acceptable. The City Commission has hired consultants to do a lot of different projects for the city, but it has been a long time since they have gotten some outside expertise on the city’s retail market. For example, if the 40 percent number is correct, what is a reasonable number for a community like Lawrence that is situated between two retail centers like Kansas City and Topeka? If Lawrence could drop that leakage number to 30 percent, for example, what would that equate to in new sales tax collections? Lawrence City Hall relies on sales taxes to fill the city’s coffers more than ever before. But, how much do City Hall leaders understand about measuring and assessing the city’s retail market?
— Every good lobbying effort needs a picture of what will happen if the project isn’t approved. On this project, that picture involves a truck stop. Among the verbiage on the development’s website is “find out more about the requested land use change from a truck stop to a first-class retail center at the southern doorstep to Lawrence.”
Don’t worry, you haven’t missed anything. A truck stop proposal hasn’t been filed for the property. But there is a legitimate reason to bring up the idea of a truck stop there. A few years ago, city planners did create a new map for this area that was added to Horizon 2020, the city and county’s long-range plan. That map labeled this area just south of the SLT as being suitable for auto-related commercial development. One of the possible uses in an auto-related commercial development is a truck stop. So, it is possible that if this shopping center project doesn’t proceed that some other development group could propose a truck stop for the location. The city would still hold the hammer on any future project because the property would need to be rezoned to actually accommodate a truck stop. But the development group could argue that the city is obligated to approve the rezoning because it put in its comprehensive plan that the site is suitable for auto-related commercial uses.
Of course, there are other possibilities too. Auto-related commercial development also could include a car lot, and I do know that at least one local car dealer has had an interest in that site previously. A development of new hotels that serve travelers along the SLT or adjacent U.S. Highway 59 also could be a use too. But yes, a truck stop could be in the mix.
— The development group — which is a North Carolina real estate group called Collett that has developed shopping centers across the country — is hosting a meeting at noon on Dec. 3 at the Carnegie Building at Ninth and Vermont streets. The developers plan to make a presentation and answer questions from community members about the project.
— Other numbers the development group is highlighting include: By 2019 — when the development would be fully constructed — the city of Lawrence will receive an extra $1.2 million a year in sales tax collections from this project. The development group’s retail market study is also estimating that once the project is fully constructed, the city and county will collect an additional $200,000 a year in property taxes from the development. Thus far, the development is not seeking any financial incentives such as property tax or sales tax rebates. The numbers likely will create some debate. Some members of the community will argue that those new sales tax collections will be offset by sales tax declines from other retailers in town.
It is a classic situation at City Hall. One group says one thing will happen. Another group says the opposite will happen. And the crystal ball at City Hall is still broken, the last I checked. The commission has a decision to make, and the community has to hope city commissioners have a reliable way of sorting through all this. Given the city’s reliance on sales tax revenues to fund the city’s budget, the stakes are high for the community.
Chamber announces tentative deal for $25 million, 100-job manufacturing plant on east edge of Lawrence
Lawrence may become a Menards town. The Lawrence chamber of commerce is announcing this morning that the giant home improvement retailer has plans to build a Lawrence-based manufacturing plant and distribution center that will bring 100 jobs to town.
Midwest Manufacturing, a division of Menard Inc., has reached a preliminary deal to buy 90 acres of property in Lawrence VenturePark, the new business park on the east edge of Lawrence that previously housed Farmland Industries. If the deal is finalized, Menards would become the first tenant of the new business park.
“It is an exciting opportunity,” said Brady Pollington, vice president of the Economic Development Corporation of Lawrence and Douglas County, which helped broker the deal. “The community will get 100 jobs, and people in Lawrence won’t have to drive 30 or 40 minutes to find a good job that pays a living wage.”
Menard Inc. plans to invest $25 million to build the project, which will include multiple buildings and 170,000 to 200,000 square feet of production and distribution space. Pollington said plans call for the plant to build exterior stone products, roof trusses and possibly other types of building products that are sold in Menards stores across the country.
Menards recently opened its first store in Lawrence near 31st and Iowa streets.
Pollington said all the jobs at the plant will meet the city’s living wage standards, which currently stand at $12.56 per hour plus benefits. The living wage levels rises each year because it is pegged to the federal poverty level for a family of three. The city’s living wage ordinance requires that firms that receive a property tax abatement must pay a wage that is at least 130 percent of the federal poverty level.
Menard Inc. will seek a tax abatement for the project. The company will seek a 10-year, 50 percent tax abatement for the development, Pollington said. The total value of the incentive package is about $2.1 million, with some of the money coming from the state of Kansas for workforce training assistance, Pollington said.
Importantly, though, Menard Inc. is agreeing to pay for the land and the special assessments that are attached to the land as part of the deal. Pollington said the purchase price of the land and the payment of the special assessments — which were used to fund utility and road improvements at the park — will equal about $2.1 million. The fact the city is getting paid for the land may surprise some. The city did not pay to acquire the nearly 400 acres of the former Farmland property. Instead, it took over the property in exchange for assuming the environmental clean-up responsibilities of the property. The city received a multimillion dollar trust fund from the Farmland bankruptcy trust to pay for the clean up costs.
Pollington said the City Commission is expected to receive the abatement request in early December, and it likely will take several weeks for the proposed deal to be debated at City Hall.
Check back for more on this story later today.
Fast-food chicken restaurant coming to west Sixth Street; 23rd Street chicken wing chain begins work; urgent care deal falls through
South Lawrence diners aren’t the only ones who will get to have all the fried chicken fun in this town. While there is a host of new chicken restaurants coming to south Iowa Street, plans have been filed for a new fast-food chicken restaurant on west Sixth Street as well.
If you remember, I told you a few weeks ago that I had heard speculation a fried chicken restaurant was going into the Bauer Farm development near Sixth and Wakarusa Drive. Well, plans for a new restaurant have been filed at City Hall, and a representative of the Bauer Farm development has confirmed to me that it is a chicken restaurant. The group, however, hasn’t yet been authorized to release the name of the new restaurant.
I know for many of you the news causes you to speculate it may be the Church’s Chicken chain. Church’s probably is the largest chain that doesn’t have a presence in Lawrence. As you may recall, we’ve previously reported that Popeye’s has filed plans to build a restaurant near 26th and Iowa streets in the shopping center that houses First Watch.
A source involved in the local development industry has confirmed that Church’s definitely has been looking for locations in Lawrence. But the source also told me that Popeye’s has been looking for a second location in Lawrence. So, it is really a guessing game at this point.
The project also still needs to win a key approval from City Hall. When the local group began developing the Bauer Farm project it agreed to a City Hall restriction on the number of drive-thru restaurants that would be located in the development. The development group — which is led by Lawrence businessmen Doug Compton and Mike Treanor — are seeking an increase in that drive-thru cap in order to accommodate this new restaurant. The group wants the cap raised to eight drive-thrus for the development, up from six. The plans states two of the eight would be limited to office drive-thrus, which could be for banks and such.
As for the location of the proposed restaurant, it is slated for the vacant lot just east of the Burger King restaurant.
• Perhaps some of you are having a hard time keeping up with all the chicken news in Lawrence. A quick recap includes: the Popeye’s at 26th and Iowa; a new Raising Cane’s chicken finger restaurant is slated for the spot in front of Bigg's BBQ near 25th and Iowa streets; and, of course — as evidence by the fact I no longer have a stain-free white shirt — Buffalo Wild Wings is already open at 27th and Iowa streets.
Some of you may remember, though, that I’ve occasionally mentioned that a business called WingStop is coming to the Louisiana Purchase shopping center at 23rd and Louisiana. That has been a slow moving project, though. Well, it is slow moving no more. Signs recently have been posted that say the restaurant will be open by December. Construction work is underway to remodel the space. The restaurant is going into the space just north of the Mr. Goodcents location. The last I knew, former KU basketball star Keith Langford and his family are the owners of the new franchise, which serves about a dozen different flavors of chicken wings.
Who knows, perhaps the restaurant will be open by Christmas. I can see it now: spicy wings in my stocking. (Trust me, I’ve had them in worse spots.)
• Back to Bauer Farm for a moment. We previously had reported that plans had been filed at City Hall for a new XpressWellness Urgent Care center to be built near Sixth and Folks Road. Bill Fleming, a representative of the Bauer Farm group, has confirmed to me that those plans have fallen apart. The property near Sixth and Folks Road is back on the market.
You will see some construction in the area, though. Plans to build a new apartment complex in Bauer Farm are moving ahead. Fleming said the plans now call for about 100 living units in the complex, which is a bit smaller than when we originally reported on the project back in March.
As for the loss of the urgent care center, I suspect that was driven by the fact that another urgent care center, MedExpress, beat XpressWellness to the market. MedExpress opened just down the street on the site the formerly housed the Spangles restaurant.
Or maybe there was something else at play in XpressWellness’ decision. Maybe their pharmaceutical rep — upon seeing the pending plethora of fried chicken — said there is no way it can possibly ship enough cholesterol medicine to Lawrence.
Chatter about a possible Lawrence Costco grows; a closer look at how developers hope retail grows near Rock Chalk Park
My radar is up and my wallet is locked up via log chain: I’m hearing multiple accounts that a Costco may be coming to Lawrence.
Multiple readers are telling me that employees at the Costco in Johnson County are talking about a pending announcement of a Costco store in Lawrence. I called the Costco store in Lenexa and simply asked the front desk employee whether the company is opening a store in Lawrence. She said: “I think we are, but there aren’t any dates yet.”
UPDATE: Conversations this afternoon have left me with more questions about the possibility of a Costco coming to Lawrence. There's no doubt that there is such talk among some Costco employees, but I talked with a source who has good knowledge of Costco's store opening process. That source told me Lawrence only recently has cracked the top 100 markets on Costco's expansion list. The store opens only 15 to 30 locations a year, with some of them being overseas. I'm not sure that math works out to a Costco anytime soon for Lawrence, but for Costco fans it is positive that Lawrence has started to move up the list.
So don’t take this news to the bank quite yet. I’ve seen no plans filed at City Hall for a Costco, and thus far there is no official confirmation from the giant retailer. But I wanted to pass along the speculation because it seems that the talk is becoming much more open in the Johnson County store. I’ve had several people ask me matter of factly about where Costco has decided to locate in Lawrence. I wanted to let people know that nothing has reached that stage. But I also wanted to share the scuttlebutt on the street, and this is the type that gets folks excited. About the only thing better than a Costco rumor is a sale on 35 gallons of milk.
If you didn’t get that reference, you must not be familiar with Costco, which leads me to ask: “Where did you park your spaceship?” Costco is is a major discount wholesale club, where you pay an annual membership fee to shop for items that are sold at a discount greater than what you normally would find elsewhere. Often, though, you have to buy the items in bulk. (Should I be worried that this rumor of a Costco has caused a certain someone in my family to start tuning up our forklift, and measuring how high pallets can be stacked in the spare bedroom?) Costco’s main competitor is Sam’s Club, the warehouse chain operated by Wal-Mart. Costco sells a large variety of products, including groceries, appliances, automotive supplies, tires, toys, hardware, sporting goods, jewelry, clothing, health and beauty and several other categories too.
As far as where Costco may locate in Lawrence, that would just be a guess at the moment. It would seem the two leading locations would be south Iowa Street or the undeveloped area near Rock Chalk Park in northwest Lawrence.
I’ve received no indications that Costco is in the mix for the proposed retail project just southeast of the SLT and Iowa Street interchange. That 250,000 square-foot project is up for zoning approval in December by the Lawrence City Commission.
The Rock Chalk Park site — the proposed shopping center is called Mercato — has the necessary zoning in place and has the space to accommodate a Costco store. But I chatted briefly with one of the commercial real estate agents that’s marketing the property, and I didn’t get a sense that a deal was imminent there.
“We would love to have them,” said Brandon Buckley, an agent with Kansas City-based Lane4 Property Group. “It would be a perfect anchor out there. We’ve reached out to a lot of different potential anchor tenants.”
Costco certainly has been one of them. If you look at the plans for the Mercato development it even shows a 140,000 square-foot building — which is the average size of a Costco — and the building has the signature diagonal corner that is common to Costco stores. Also note the little gas station out in the parking lot of the 140,000 square-foot building. That’s also another hallmark of Costco.
Costco would be a huge win for the Mercato development. The area has struggled to attract a single retailer since becoming zoned for commercial uses several years ago. The site has been losing out to south Iowa Street, with Menards and Dick's Sporting Goods being two of the larger examples that recently chose south Lawrence over Mercato. But if Costco were to locate at the site, it would generate the type of traffic that would likely cause other retailers to follow.
“All the nationals like to go together,” said Buckley, who said interest in Mercato has picked up as traffic volumes have increased due to the Rock Chalk Park recreation facilities now being open. “We need a catalyst like that out there.”
As the plans above show, the area is designed to house about 15 major retailers, plus there are other parcels that could house a half-dozen restaurants or other commercial developments. It could be the type of development that would shift momentum away from the south Iowa Street corridor. One of the debates that is brewing in some City Hall circles is whether Lawrence’s retail scene is becoming too reliant on south Iowa Street, much like Topeka has become reliant on Wanamaker Road.
A big question in all of this, though, is whether Costco will come to town without any financial incentives from the city. It would be an interesting debate to watch. Costco is the type of retailer that certainly would bring new sales tax dollars into the community. Depending on where it was located, it could easily draw shoppers from the Topeka area. But many on the current commission ran against the idea of incentives. Whether they would offer incentives to a chain retailer — even a large one that could draw outside dollars — is uncertain.
But, we’re starting to get ahead of ourselves here. I can’t emphasize enough that there is a lot that is uncertain at the moment. The two biggest unknowns are: We don’t know if Costco has decided to enter the market, and we don’t know where it would locate in Lawrence.
The talk by employees, however, is interesting. I think the talk is a good indication that Costco indeed is giving Lawrence a serious look. But sometimes employees don’t always have all the details correct about what’s going on within their companies. As one commercial real estate person told me, it is uncommon for store employees to know the store opening plans for their company. We’ll have to wait and see how this one plays out. I’ll keep my ears open for more details.
New report shows number of downtown Lawrence retailers on a significant decline; new numbers for citywide vacancy rate
In recent years I know downtown Lawrence has produced more of some things: more apartments, more hotels, more reasons for my wife to wear a disguise when she sees a parking control officer. But one thing it is has produced less of is one of its more important commodities: retail stores for shoppers to spend money.
The number of retail stores in downtown Lawrence is at its lowest point in years, according to a new study released by City Hall. The 2015 Retail Market Report prepared by the Lawrence-Douglas County Planning Department found that there are only 82 businesses in downtown Lawrence that actually fit into the “retail” category. That’s down from 116 in 2012 and down from a recent high of 126 in 2006.
Obviously, there are more than 82 businesses in downtown, but most of them aren’t shops or stores. The majority of them are either offices, bars and restaurants, hotels or other uses. In total, the planning department lists 310 businesses in downtown. That means retail makes up only 26 percent of the downtown business uses. Back in 2006 that percentage was 43 percent.
Thus far, the change isn’t raising a large red flag with city planners.
“My thought is that we are seeing a little bit of a shift in the retail market,” said Jeff Crick, a long-range planner that was part of the group that compiled the report. “Downtown has become more of a specialty retail market than a general retail market, and the numbers are starting to show that.”
Nonetheless, the numbers are interesting. Retail is such a major part of downtown’s identity. It has been clear the number of retail businesses in downtown has been dropping, but to see it drop by 8 percent from 2012 to 2015 is eye-opening. At one point it looked like the retail numbers might be rebounding. The 2012 report counted 116 retail businesses, which was two more than was counted in 2011.
The numbers are most interesting when you look at how much things have changed since 2006. Back in 2006, retailers were the most prominent types of businesses in downtown by quite a bit — retailers were at 43 percent while restaurants/bars and office/service businesses each were at 23 percent.
Today, offices/services businesses — think attorneys, accountants, doctors and other office users — are No. 1 on the list at 36 percent. Further, restaurants and bars are about to overtake retailers as the second largest group of businesses in downtown. There are 80 bars and restaurants in downtown compared with 82 retailers.
Here’s a look at how much things have changed since 2006:
— Retail stores: 82 in 2015, down from 126 in 2006
— Restaurants/bars: 80 in 2015, up from 68 in 2006
— Nonretail/office: 111 in 2015, up from 67 in 2006
— Hotels: four in 2015, up from two in 2006. (Jeopardy question: The four hotels in downtown Lawrence. The Eldridge, Springhill Suites by Marriott, TownPlace Suites by Marriott and . . . . The Eldridge Extended on Vermont Street. Oh, I’m sorry, you did not answer in the form of a question.)
Another interesting number to look at is how much downtown’s overall market share has declined in Lawrence. In 2009, downtown captured 14 percent of all retail sales tax dollars in Lawrence. In 2012 it grew slightly to 15 percent. But in 2015, downtown’s market share has dropped to 9.5 percent.
Here’s a look at the top five retail areas in Lawrence based on their sales tax collections:
— South Iowa Street: 40.9 percent in 2015, up from 37 percent in 2009
— West 23rd Street: 12.8 percent in 2015, down from 16.3 percent in 2009
— Downtown: 9.5 percent in 2015, down from 14.6 percent in 2009
— Sixth and Wakarusa: 9.1 percent in 2015, up from 8.9 percent in 2009
— West Sixth Street: 7.9 percent in 2015, up from 6.2 percent in 2009
What will be most interesting, though, is to see what happens next for downtown. These numbers don’t look great, but if you looked at building permit numbers for downtown, they would look pretty impressive. There’s been a lot of new investment in downtown.
But it has not been on the retail front. Take the intersection of Ninth and New Hampshire: Three new high-rise buildings totaling more than $50 million in construction either have been built or are underway at that intersection. In terms of retailers added, however, there will be a grand total of one, as it stands now. That one is City Wine Market, which is open on the ground floor of the Marriott building. Port Fonda, which also is on the ground floor of that building, is a restaurant. The Summit in the 901 building is a fitness center that counts as a service business, not a retailer. The new building under construction at the northeast corner primarily will house a bank on its ground floor, another example of a nonretail use.
But all three new buildings are creating significant new spaces for people to stay the night in downtown, either through new apartments or new hotel rooms. City leaders are betting that more people living and staying in downtown will boost retail uses in the downtown district. Certainly, the idea of a grocery store in the former, and now vacant, Borders bookstore building is still being actively pursued. That potential retailer could move the needle significantly on downtown retail sales.
The retail report did produce one other number that usually gets a lot of attention: the overall retail vacancy rate for the city. The report found that it hasn’t changed much, and is still below the regional average.
Planners calculated Lawrence has an overall commercial vacancy rate of 7.4 percent. That’s pretty much unchanged from 2010 and 2012 when the rate checked in at 7.3 percent and 7.2 percent respectively. It is up slightly from the 6.7 percent rate in 2006 when the economy was humming along at a pretty good clip. The average vacancy rate for the Midwest-Great Plains region is 8.7 percent. City planners typically have listed any vacancy rate under 8 percent as healthy.
The vacancy rate number has been used in the past as a measuring stick for whether the city ought to approve new retail areas for development. As we’ve reported, city commissioners next month are expected to vote on a rezoning for about 250,000 square feet of retail space southeast of the SLT and Iowa Street interchange.
This report likely will provide ammunition for both sides of that argument. The overall vacancy rate likely isn’t a great weapon to argue for denial of the proposal. Lawrence has added retail space over the last decade, and it seems to have had negligible impact on the overall vacancy rate in the city.
“The market is impressively stable,” Crick said of his view of the vacancy rate. “It has had really good trends since 2006.”
But the new numbers about downtown and its declining market share and retail presence likely will be part of the argument. City leaders likely are going to have to ask themselves how much they really believe some of the proposed big retailers on South Iowa Street — Academy Sports, Old Navy and Marshalls/Home Goods have been mentioned as likely tenants — will impact downtown retail. Are the changes in downtown retail all about South Iowa Street competition, or are the millions of dollars in new investment just causing downtown to morph into something different than what it used to be?
It will be an interesting debate to listen to. This may come down to a very old argument in Lawrence: How much should you protect downtown Lawrence? How much can you protect downtown Lawrence?
In other news and notes:
• Just a quick update from the Planning Commission meeting last night. Planning commissioners unanimously recommended approval for two projects we reported on yesterday: Plans to redevelop the former Sunrise Garden Center in east Lawrence and plans to convert the KU Tennis Center in west Lawrence into a new facility for Genesis health clubs. Both projects now will go to the City Commission for final approval in the next few weeks.
Talk of a fitness center usually causes me to fake a hamstring injury (mmm, ham,) but I guess it is safe to pass along this news. It sure looks like far west Lawrence is going to get a new fitness center.
As we previously reported, Genesis Health Clubs has bought the KU Tennis Center at 5200 Clinton Parkway. But it was a little unclear whether Genesis would focus just on tennis at the new location or would seek to add a fitness center to the offerings.
Well, plans now being considered by Lawrence City Hall indicate a fitness center is in the works. The Lawrence-Douglas County Planning Commission tonight will consider a plan that will allow about 11,000 square feet of new space to be added to the building.
According to the submitted plans, the building will be remodeled to include room for strength and cardio areas, fitness studios, a group fitness area, and men’s and women’s locker rooms with steam rooms.
Yes, tennis also will be a part of the facility. The plans show four indoor courts and the six outdoor courts that currently are on the site. I think there currently are five indoor courts at the facility, but it looks like one will be eliminated to make way for some of the additional amenities. The expansion of the facility, which is being designed by Lawrence-based architect Paul Werner, doesn’t call for enlarging the footprint of the building. Instead, a mezzanine level will be added to the building.
There is vacant land to the west of the property — it used to house the softball fields as part of Sport 2 Sport — but the project isn’t proposing to develop that property. City planners also are making a point to note that the property shouldn’t be developed in the future. The vacant ground is directly below the dam of Yankee Tank lake. Genesis purchased the property as part of the tennis center deal, but it has expressed no desire to develop the land. Instead, it proposes to use the area as overflow parking for the facility.
Genesis is seeking approval of a special use permit at tonight’s Planning Commission meeting, which begins at 6:30 p.m. at City Hall. If approved by the Planning Commission, the project also will have to win approval from the Lawrence City Commission before it can proceed.
I have put a call into the folks at Genesis — which has Lawrence fitness centers at 3201 Mesa Way and 2339 Iowa — to get more information, but haven’t heard back from them.
In case you have forgotten, the KU Tennis Center has become available because Kansas University is building a new state-of-the-art tennis facility at Rock Chalk Park. As we previously have reported, KU Athletics and Lawrence businessman Thomas Fritzel have entered into a deal to build a new center on the portion of Rock Chalk Park that is just south of the soccer field and track and field stadium. The new KU facility, however, will be open to the public for memberships.
In other news and notes from around town:
• The Lawrence-Douglas County Planning Commission tonight will be dealing with tofu. (Whenever I have to deal with tofu, I normally panic and blurt out that my hamstring is allergic to it.) But this is a different type of deal, I believe. The Planning Commission will be deciding whether a small tofu manufacturing plant can locate in the Barker neighborhood near 15th and Learnard.
As we previously have reported, Lawrence-based Central Soy Foods wants to use a portion of the former Sunrise Garden Center to build a facility to manufacture its tofu and tempeh. Planning commissioners at their meeting tonight will consider changing the zoning of the former nursery site from residential to light industrial.
Central Soy Foods has been around since 1978, but was bought by a group led by Lawrence businessman David Millstein in 2003. Millstein previously told me the company produces about 2,000 pounds of tofu and tempeh — a soy product that uses mushroom spores — per week. It sells the products primarily in grocery stores around the Kansas City region. The company has been looking for new production space since summer, mainly because the company’s current production facility isn’t very efficient, Millstein said.
Planning commissioners were scheduled to take action on the rezoning request at their October meeting, but they balked in order to give members of the neighborhood more time to learn about the project.
The site likely will end up housing more than just a tofu facility. A concept plan for the property shows a pair of 2,400 square-foot buildings being constructed on the site. One would be for the Central Soy Foods production plant. The other would be for Optimal Living, a company that cooks and delivers healthy meals for a variety of customers. The plan also calls for the existing greenhouses to remain. As we previously have reported, a nonprofit called the Sunrise Project hopes to use a portion of the site for demonstration gardens and other projects that demonstrate the importance of locally grown foods and issues of sustainability.
Millstein also has been working with other smaller companies that could use the greenhouse and growing space. That could be everything from vegetable producers to more specialty growers. A company called Seeds from Italy, a Lawrence-based company that imports the Franchi Seeds of Italian vegetable, herb and flower seeds, has expressed an interest in having a small facility at the site.
Several neighbors of the site have written letters of support for the project. They like the idea of agriculturally based businesses at the location better than they like the idea of a dense housing development on the approximately three-acre site. But neighbors have expressed concern about the types of uses that could be built on industrially zoned property, if the agriculture ventures fail.
Planning staff members are recommending that a special provision be added to the property to alleviate some of those concerns. The condition would require any future developments to have their site plans approved by the City Commission. Normally, site plan approvals are handled administratively. The City Commission approval will guarantee that neighbors have a public forum to voice any concerns over future development of the property. But it doesn’t really provide any assurances that certain types of industrial uses won’t be allowed on the property. Site plan approvals aren’t about saying no to certain types of uses — zoning dictates that — but rather is about ensuring that technical details like access points, landscaping, lighting and such are handled appropriately.
Planning commissioners at their meeting tonight will make a recommendation on whether to change the zoning from residential to the city’s limited industrial category. City commissioners, though, will have the final say on the zoning issue. The matter likely will come to the commission in the next couple of weeks.
Signs of change at south Iowa Street movie theater; update on tenant for old Round Corner Drug space; west Lawrence restaurant closes
Some news and notes from around town:
• Movie theater liquor: It looks like it is coming to Lawrence’s largest cinema chain. The Regal theater chain on south Iowa Street has filed for a city drinking establishment license. I don’t get out to the movies a tremendous amount, but I don’t believe liquor has been one of the concession stand options. If the license is approved by city commissioners — all indications are that it will be approved — it is the type of license that allows for both beer and cocktails to be served. I have no word yet from Regal, though, what its plans are for the Lawrence theater. Obviously, there are numerous theaters in the area that serve alcohol. I may be mistaken, but I think Lawrence’s Liberty Hall currently serves beer as a concession option. Some of the theaters in Kansas City serve full meals and have extensive cocktail offerings. I know this because I recently signed the paperwork on the home equity loan that I used to pay off that night at the movies. There certainly has been a lot of discussion over the years about a need for the Regal movie theater to upgrade its offerings. It will be interesting to see whether this is a sign of other improvements to come. I’ll reach out to the Regal folks to see if I can learn more.
• Movie theater liquor may change the equation on whether I can afford both movie and a dinner on date night. (Questions: Will the movie theater serve the cocktails in the same cups they serve the soda? And just how much will an 84 ounce Tom Collins cost?). But, on the off chance that both still fit in the budget, it looks like there will be a new downtown dining option soon.
I’ve been telling you for awhile now a restaurant is going in the old Round Corner Drug location at 801 Mass. Figuring out exactly what restaurant, though, has been challenging. We’ve got a new clue, though. City officials have received a drinking establishment license for a new business called RND Corner Grille.
I’ve previously reported that the person behind the venture is Zach Marten, the Kansas City restaurant guy who is one of the operators of Coal Vines Pizza in the Country Club Plaza. According to the paperwork related to this drinking establishment license, Marten and business partner Bret Springs — who also is a partner in the Coal Vines business — are indeed the operators of Lawrence’s RND Corner Grille.
I’ve reached out to Marten in the past with no luck. But I’ll do so again to see if he is ready to start sharing some details about his new business. It has been a slow-moving venture up to this point. The group filed a site plan with the city in June 2014 to occupy the building, and we’re just now reaching the end game.
It will be interesting to see what concept the group pursues here in Lawrence. It has experience in more than just the pizza game. The duo also is behind the Westport Ale House, which serves a lot of beer and has a menu full of hamburgers, sandwiches, nachos, wings and other such creations.
• There is one less dining option in Lawrence: The west Lawrence sports bar and grill Legends has closed at Bob Billings and Wakarusa Drive. Matt Llewellyn, owner of the popular 23rd Street Brewery, was lead owner of Legends. He said Legends just never did attract the volume of business that was expected.
“It just didn’t work,” Llewellyn told me. “I’m pleased and very thankful for the guests that we had, but I just didn’t have enough of them.”
The location has proved difficult for a number of restaurants. Among some of the restaurants that have tried and failed there are Tanner’s Sports Bar & Grill, Zig & Mac's, Bambinos, and I know I’m forgetting some others.
Llewellyn partnered with longtime sports personality David Lawrence — the Jayhawk football color commentator — on the restaurant. It had a lot of KU memorabilia, and the restaurant had a strong relationship with several other KU personalities. There was even part of the menu that was created by KU basketball strength and conditioning coach Andrea Hudy.
It will be interesting to see whether the location improves any once the new Bob Billings interchange on the South Lawrence Trafficway opens. The interchange, which is scheduled to open later this month, is expected to increase traffic volumes along Bob Billings Parkway. The interchange really will cause Bob Billings to become a new western gateway for the city of Lawrence, and particularly for anyone wanting an easy route to the KU campus.
Llewellyn said the business tried to hold out until that opening, but said the business could not continue operating at current levels.
Llewellyn, though, said the troubles at Legends have not created any problems for 23rd Street Brewery. He said business remains strong at that microbrewery and restaurant.
“Business is still super over there,” Llewellyn said.
No word yet on what may come of the space at Bob Billings and Wakarusa. Llewellyn said there has been some interest from other types of businesses to sublease the space, but no deals have been signed.
• For those of us who must always know that there is a 24-hour supply of bacon nearby, take a deep breath. Perkins — the 24-hour restaurant at 23rd and Ousdahl — has not closed down. The restaurant has been closed a few days, but it is for remodeling and updating. A worker last evening told me the restaurant is scheduled to reopen today. No word yet on what the renovation involved, but it looked like a pretty significant amount of interior work. I’ll report back if I hear of anything interesting.
Incentives to attract retailers and other matters up for debate in Horizon 2020; Lawrence job growth outpaces state’s; update on south Iowa development
The Lawrence City Commission is back to conducting it normal business, which means that drug stores around the city are once again stocking NoDoz. I’ve sat through enough City Commission meetings that I can make jokes like that. Indeed, there are some topics at City Hall that average residents may have a hard time getting excited about.
An update to the city and county’s comprehensive plan is likely one of them, but that doesn’t mean you shouldn’t pay attention. Tinkering with that document can have long term implications about how the city and the county go about managing growth, which is a frequent topic that people are eager to argue about.
City commissioners at their Tuesday evening meeting will consider accepting a report from a joint committee that has been meeting for months on how the comprehensive plan — Horizon 2020 — should be changed. If commissioners agree to accept the report, then a more formal process for changing Horizon 2020 will begin. This report from the committee will serve as the guiding document for the changes to come.
Look for City Hall reporter Nikki Wentling to provide you a more detailed account on all of this prior to Tuesday’s meeting. The report lists a host of issues prime for updating. They range from strategies on economic development to how tall future buildings ought to be in downtown. It will be interesting to watch where the battles flare up.
One area that caught my attention after a quick read of the document is in the area titled “plan for the size and location of retail development.” The report listed just one “action step” under that category: Study incentives that would be desirable to encourage and foster redevelopment in existing commercial/retail areas within the city of Lawrence and unincorporated Douglas County.”
Now, the report doesn’t go into detail of what it means by incentives, but certainly financial incentives for retail development have been controversial. I remember when the Olive Garden tried to build a restaurant at 27th and Iowa street on a piece of retail property that had sat vacant for quite awhile. The idea of providing an incentive to Olive Garden ended up getting shot down by the City Commission at that time. A large argument from opponents was that it was unfair to provide an incentive to one Italian restaurant when there are other Italian restaurants in town that don’t receive an incentive.
A question going forward is: What retailer could come to town that wouldn’t compete in at least some way with an existing retailer in Lawrence? Or perhaps, we’re over that debate. The city provides incentives to hotels, despite there being other hotels in town, to a drug store, and to multiple restaurants. Those incentives have come in the form of special taxing districts where developers are allowed to use a portion of the tax receipts to pay for parking and infrastructure.
I think another interesting issue to keep an eye on is whether city officials will determine an incentive needs to be offered to attract retailers to the area around Rock Chalk Park in northwest Lawrence. The property is already zoned for retail development, but it just hasn’t attracted any yet. The recreation center and the KU facilities have not yet been enough of an enticement for retailers to locate on the property. How long will commissioners go before they get more aggressive in trying to create a retail center at that location? The city provided about $22 million in funds to make the Rock Chalk Park project a reality, and I’m pretty sure they were hoping one of the payoffs would be a robust retail area. Keep that in mind as the city discusses the future of retail incentives.
Commissioners, however, are going to get a chance to talk about a major retail issue well before they figure out any of this comprehensive plan stuff out. As we previously have reported, a zoning request for a new 250,000-square-foot retail development at the southeast corner of the SLT and Iowa Street is awaiting a hearing from the City Commission. It already has been recommended for approval by the Planning Commission. The retail development isn’t asking for any incentives, and the development group said interest has been strong from major retailers to locate on the South Iowa Street corridor.
The City Commission is tentatively scheduled to hear the rezoning request at its Dec. 8 meeting, but that date is subject to change. On issues like this, commissioners have been known to take as much time as I take with a bowl of all-you-can-eat breadsticks.
And who knows, maybe the North Carolina-based development group will want a delay too. As I look at the situation, it is not at all clear that the development has the necessary votes on the City Commission to win approval.
One thing that is scheduled to happen before that Dec. 8 meeting is that the City Commission is scheduled to receive the 2015 Retail Market Report from the city’s planning staff. That is a report where planners attempt to estimate the retail vacancy rate in the city, and measure several other pieces of data designed to give a snapshot of the health of the retail market. That report could be ammunition in the debate for either side, depending on what it says.
In other news and notes from around town:
• Let’s take a look at the latest job numbers for Lawrence and other Kansas communities. According to the latest figures from the U.S. Bureau of Labor Statistics, job growth totals in Lawrence are quite a bit better than those in other parts of the state.
Lawrence had 1,400 more jobs in September 2015 than it did in September 2014, according to data from the Bureau of Labor Statistics’ monthly metropolitan area employment report. Lawrence’s growth rate checked in at 2.6 percent for the year. That put Lawrence at No. 2 of the four Kansas metro areas that the BLS tracks.
Importantly, Lawrence’s growth rate was better than Kansas’ overall growth rate of 0.6 percent.
Here’s a look at how Lawrence’s employment growth rate stacked up to some other communities in the state and region:
— Manhattan: up 2.7 percent
— Lawrence: up 2.6 percent
— Topeka: up 0.4 percent
— Wichita: up 0.3 percent
— Kansas City, Mo.-Kan.: up 1.5 percent
— Columbia, Mo.: up 1.2 percent
— St. Joseph, Mo.: down 1.6 percent
— Ames, Iowa: up 0.9 percent
— Iowa City: up 1.1 percent
In terms of how the state stacks up, here’s a look at the growth rates — from September 2014 to September 2015 — of our neighbors:
— Colorado: up 1.7 percent
— Kansas: up 0.6 percent
— Missouri: up 0.9 percent
— Nebraska: up 0.6 percent
— Oklahoma: up 0.1 percent
These numbers are subject to revision next month. The BLS released revised numbers for August, which showed slower growth rates for Lawrence. The revised numbers showed Lawrence had a growth rate of 1 percent from August 2014 to August 2015. That was better than the statewide growth rate of 0.4 percent. Lawrence’s totals were stronger than Topeka’s (up 0.5 percent) and Wichita’s (down 0.1 percent) but lagged Manhattan’s (up 3.2 percent.)
• If you have been on south Iowa Street recently, you may have noticed demolition work has begun near 26th and Iowa streets, where the Lawrence Workforce Center once was housed. I had someone this weekend ask me what was going into that location. I looked at him incredulously and threw a wet wipe at him.
As I reported in early September, plans have been filed at City Hall that list Popeyes fried chicken as the the tenant for that site. Demolition work will clear the way for a new building and drive-thru to be constructed right near the northeast corner of 26th and Iowa.
Look for other construction work on the adjacent shopping center — Tower Plaza — as well. The plans filed with the city indicate that a new facade is coming for the shopping center.
If you are looking for a job, don’t worry, the workforce center is still around. As we previously have reported, it moved to the new Peaslee Tech vocational education building near 31st and Haskell.
• A housekeeping matter: Town Talk will be absent for the next few days while I work on another project. That project may or may not involve a very large bucket of fried chicken. Assuming I don’t run out of wet wipes, look for Town Talk to return late this week.
Lawrence’s former mayor has left a mess behind. Yes, I know, that is not exactly breaking news at this point. But I’m talking about a literal mess, as in a pile of trash strewn about the front yard of his former home.
Journal-World photographer Nick Krug took these photos a few days ago at Jeremy Farmer’s former residence at 1135 Randall Road after some neighbors had called us to complain about the mess.
In case you have forgotten, Farmer resigned his post as mayor of Lawrence in August after he resigned his job as the executive director of a local food bank where it was discovered he failed to pay more than $50,000 in payroll taxes. The food bank’s board later alleged that Farmer overpaid himself by more than $52,000 over a two-year period, and deceived the Just Food board on multiple financial matters. We all await whether Farmer will face criminal charges in the matter.
Farmer’s whereabouts have been unclear since his resignation, and he hasn’t returned phone calls. Looking at county property records for 1135 Randall, I reached out to the owner of the property. The man who answered the phone didn’t want to give his name but did say he was the landlord for the property. He told me Farmer moved out of the property on Oct. 31. The man said it was Farmer who left the trash in the yard, and he was disappointed when he saw the mess. The man called city sanitation crews, who picked up the trash, he said.
The man said Farmer didn’t say where he is living these days. Farmer didn't return a call for comment.
Certainly this isn’t the first time a mess has been left by a Lawrence renter leaving town. But I did find it noteworthy, in part, because Farmer once was an elected official who railed against such things. It would be hard for me to count the number of times Farmer climbed atop his soapbox to lecture about how we all needed to be better neighbors and about how we all needed to do more to build a community.
Hopefully, the soapbox is in that pile somewhere.
As for other updates on Farmer’s situation, we are kind of in wait-and-see mode. Charges haven’t been filed yet. As we’ve previously reported, it doesn’t sound like the type of case that local prosecutors are planning to deal with. Instead, my understanding is that federal investigators have taken the lead.
I don’t have great detail on the matter, but there could be numerous federal agencies that could be interested, with the IRS likely being near the top of the list. People who are familiar with such matters tell me federal investigations take their time. I think it could be months yet before we know whether criminal charges will be filed in the matter.
But there likely will be other opportunities for updates before then. As we previously have reported, the Just Food board has ordered an audit. My understanding is that audit is still in process. But when it is completed, we’ll seek to get a copy and report on its results.
The community has rallied around Just Food, and helped the nonprofit complete a fundraising drive to pay off its debt to taxing authorities. But, I think there is strong interest in the community about getting to the bottom of what happened at the organization. That interest likely will become stronger if Just Food seeks city or county funding in the future to help it keep its doors open.