LJWorld.com weblogs Town Talk
Tofu maker seeking location in rural Douglas County; city now looking at 0.2 percent sales tax proposal; City Hall discussion of payday loan regulations
Perhaps you have noticed that you now have to take out a home equity loan to have a pot roast for dinner, and my banker asked me if Warren Buffett was my uncle or something when I brought up the possibility of a steak. The point is, beef prices have soared, but there is one Lawrence company that may benefit if consumers begin looking for an alternative.
Lawrence-based Central Soy Foods is moving to a new location in rural Douglas County to give it better space to make its tofu and tempeh products. The company has filed plans with the Lawrence-Douglas County planning office for a conditional use permit to build about a $100,000 addition onto a rural Douglas County home at 1168 East 1500 Road. The addition would serve as production space for the company that has about five part-time employees.
If you are like me — someone who carries an extra piece of meat around in your pocket just to make sure you don’t have a shortage — you may not be familiar with Central Soy Foods. But it's been around since 1978. A group led by longtime Douglas County businessman David Millstein purchased the company in 2003. It now produces weekly about 2,000 pounds of tofu and tempeh, a soy product that incorporates mushroom spores.
The company currently has production space on East 22nd Street, and Millstein said the proposed move isn’t so much about expansion as it is about having a more efficient location. Currently, the company is in a building that has a roofing company on one side and auto body shop on the other, which keeps the Central Soy staff busy maintaining the necessary sanitary standards.
But Millstein said the company already has enough equipment to more than double its production. Now, the company is just monitoring whether tofu consumption in the Lawrence and Kansas City region has room to grow.
“I think it is growing a little bit right now,” Millstein said. “It should. The price of beef is so high right now. You can get tofu for around $3 a pound or a little less.”
But Millstein said the company doesn’t have any plans to grow the geographic region it serves.
“We like what we’re doing,” Millstein said. “We like the regional aspect of it, and the freshness of it.”
The company currently sells its products in Lawrence at pretty much all the grocery stores in town, and also in the Hen House, Whole Foods, and several other chains in the Kansas City metro area.
As for our friends in the beef industry, the run-up in prices has been just short of amazing. A recent article in Beef Magazine (excuse me while I day dream of the holiday employee meal at Beef Magazine) estimated that owners were receiving an extra $585 per head for fed cattle compared to this time last year. Although that is not fun at the grocery store, Kansas is still one of the larger producers of beef cattle in the country, so you have to figure the state’s economy is getting a nice boost right now.
In other news and notes from around town:
• Don’t forget to factor in the sales tax when you are filling out that loan application for the ground round. Lawrence residents will have a hard time forgetting sales taxes over the next few months because there will be a proposed sales tax increase on the November ballot to pay for a new police headquarters building.
But as we indicated earlier this week, the proposal is changing. At their Tuesday evening meeting, commissioners will consider placing a 0.2 percent sales tax increase on the November ballot. Previously, commissioners had been considering a 0.25 percent sales tax on the ballot. The 0.2 percent increase would last for nine years, or until the police headquarters is paid for, whichever comes first. City staff also notes that a 0.25 percent sales tax rate would likely pay for the project in eight years. But based on what I’ve heard from city commissioners, they like the 0.2 percent and nine year option. They like the idea of being able to present a lower rate to voters. Indeed, that does work out mathematically to be a better deal for consumers. For example, assume the average fellow makes $20,000 a year in taxable purchases in Lawrence. That’s $160,000 in purchases over 8 years. At a 0.25 percent rate that is an extra $400 in taxes over the total eight-year period. Use the same $20,000 per year estimate, but change the rate to 0.2 percent for nine years, and the total tax increase falls to $360.
As for how Lawrence’s sales tax rate will stack up with other communities if a 0.2 percent rate increase is approved, the city’s general sales tax rate would rise to 8.9 percent. In the two places where a special taxing district exists — The Oread hotel and the retail area at northeast corner of Sixth and Wakarusa, the sales tax would be 9.9 percent. Here’s a look at how Lawrence’s general sales tax rate would compare to several other cities in the state. (Note: This assumes these other cities also don’t raise their sales tax rates.)
— Baldwin City: 8.4 percent
— Unincorporated Douglas County: 7.15 percent
— Eudora: 8.15 percent
— Kansas City: 8.775 percent
— Kansas City Legends shopping area: 9.375 percent
— Leawood: 8.5 percent
— Lenexa: 8.75 percent
— Manhattan: 8.4 percent
— Olathe: 8.875 percent
— Ottawa: 8.75 percent
— Overland Park: 8.5 percent
— Overland Park Oak Park Mall district: 9 percent
— City of Shawnee: 8.625 percent
— Tonganoxie: 8.9 percent
— Topeka: 8.8 percent
• There may be one other rate that gets attention at Lawrence City Hall: The interest rate that payday loan businesses charge their customers. Commissioner Jeremy Farmer, director of the food bank Just Food, has expressed concern that some payday lenders are having a negative impact on low-income residents. The city attorney’s office has prepared a memo on what regulations exist in the payday loan industry in the state. That memo questions whether the city would have the legal authority to create local regulations that could place a cap on the interest rates such lenders could charge. But, it may still come up for discussion at the City Commission.
In general, payday lenders can’t charge an interest rate above 15 percent, and the loan must be between 7 and 30 days. If the borrower is late in paying back the loan, the payday companies can charge 3 percent of the loan amount each month. But there are also other types of loans, “open ended credit agreements” that aren’t technically considered a payday loan by state regulations, and those don’t have an interest rate cap.
Some area cities do require payday lenders to get a local business license, but I’m not sure what additional protections that license process would create for consumers. I’ll report back if it looks like the idea is going to get a hearing before commissioners.