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Kansas City grocery company signs deal to locate store in downtown Lawrence; lawsuit could still derail project

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A full-service downtown grocery store — complete with a pharmacy and a Mongolian grill — is now closer to becoming a reality than ever before. But a Douglas County court case could still deal the project a major blow.

As expected, Queen’s Price Chopper of Kansas City has signed a letter of intent to locate a Price Chopper grocery store at Seventh and New Hampshire streets, on the site of the former Borders bookstore.

A development group led by Lawrence businessmen Mike Treanor and Doug Compton have filed plans at City Hall to tear down the old Borders bookstore and replace it with a three-story building that would include the ground-floor grocery store and two levels of apartments above. The filing of formal plans — an incentive request also will be filed — marks the largest step yet in a multiyear effort to bring a grocery store to downtown. But the project is still in jeopardy of receiving a major setback from a Douglas County lawsuit.

As we reported in December, a pair of condo owners in the adjacent Hobbs Taylor Loft building have filed a lawsuit alleging that the development group is seeking to do an end run around a set of covenants that prohibit a large grocery store from being built on the Borders property. The development group disagrees. The development group filed a motion to dismiss the lawsuit. A hearing was held at the end of March, and now the parties await a decision from Douglas County District Court Judge Kay Huff. If the lawsuit isn’t dismissed, it is presumed Huff will issue an injunction that will stop work on the project. That makes the stakes of her decision high.

“If there is a ruling that says we are under an injunction, it probably will be close to a death knell,” said Bill Fleming, an attorney who represents the development group.

This drawing shows a northwest perspective of a proposed grocery store and apartment building at 700 New Hampshire St.

This drawing shows a northwest perspective of a proposed grocery store and apartment building at 700 New Hampshire St.

The injunction wouldn’t stop the development group and the two residents — Brian Russell and Brent Flanders — from settling the lawsuit, but it is unclear to me whether such a settlement is likely. As for the timing of the court’s decision, that is anyone’s guess, although it has moved fairly quickly thus far by judicial standards.

Absent the lawsuit, excitement levels are high for the project. The development will need to win several city approvals, and the developers are making no secret about the fact that they will be asking for incentives. Those will include a tax increment finance district that will rebate back large portions of property and sales taxes to the project, plus a low or no-interest loan that will help equip the new store.

But developers say the community will be getting what it long has asked for: a downtown grocery store that is big enough to serve not just the downtown but surrounding neighborhoods like North and East Lawrence.

“There will not be anything lacking from the grocery side,” said Dennis Reilly, chief financial officer for Queen’s Price Chopper. “It will be one-stop shopping.”

This drawing shows a south perspective of a proposed grocery store and apartment building at 700 New Hampshire St.

This drawing shows a south perspective of a proposed grocery store and apartment building at 700 New Hampshire St.

Here’s a look at some the of the details from the latest plans:

• The approximately 20,000 square-foot Borders building would be demolished and would be replaced with a three-story building that would have a footprint of about 40,000 square feet. The ground floor would house the grocery store.The second and third floors would house 82 apartments that would include a mix of studio, one-bedroom and two-bedroom units. Fifteen percent of the apartments would rent at rates that meet the city’s new affordability standards.

• The project would include a two-level, underground parking garage built beneath the new building. The garage would have 182 spaces. The lowest level of the garage would be gated and reserved for the use of apartment tenants. The other level — about 91 spaces — would be available for grocery store customers. In addition, the project would have about 80 above-ground parking spaces around the store. About 60 of them would be in the existing lot just south of the current building. About 15 angled parking stalls would be added on New Hampshire Street and about five angled stalls would be added on Seventh Street. All the above ground parking is anticipated to be public parking that would be managed by the city, which means it could be metered spaces or could be two-hour free parking.

• In case you are wondering how you get your grocery cart to your car in the below-ground parking garage, the store’s design includes an escalator specifically built for grocery carts. The store would have a standard escalator, and next to it is one that is designed to grasp a grocery cart.

“You can stay with your cart, but you can’t ride in the cart,” Fleming said. “At least I don’t think you can.” (We’ll see about that.)

• The store will have many of the same features as the Queen’s Price Chopper at 151st and Metcalf in Overland Park, Reilly said. That store is twice as large — at 80,000 square feet — but the Lawrence store will be designed in a way to accommodate the same basic features. At 40,000 square feet, the Lawrence Price Chopper will be similar in size to the Dillons store on Massachusetts Street.

This drawing shows a west perspective of a proposed grocery store and apartment building at 700 New Hampshire St.

This drawing shows a west perspective of a proposed grocery store and apartment building at 700 New Hampshire St.

• Among the features the store will have is a drive-thru pharmacy. The drive-thru will be on the south side of the building. The store also will have a sushi bar, a Mongolian-style Asian grill, an American grill, cold sandwiches, a coffee shop, a large indoor dining area and a patio seating area. The store also will have a floral shop, a bakery, a full meat counter and all the grocery items you would expect. Reilly said the store’s produce department is being given special attention. The store will be designed so that the produce department is visible from the street.

“Produce is a real emphasis for us,” Reilly said.

• The project will need to win multiple approvals from City Hall in order to move forward.

“The project is going to need some help,” Fleming said.

The project will have to go through the historic resources review process, since downtown is part of a historic district. The Borders building only dates back to the 1990s, but the site includes an old wall from a livery station that used to occupy the site long ago. Keeping that wall was part of a compromise reached with historic preservationists who objected to the construction of the Borders building in the 1990s.

• City Hall approval of an incentives package will be critical, Fleming said. He said the project will ask for tax increment financing, which is a mechanism that allows the development to receive a rebate on new property and sales taxes generated by the development. Fleming said the TIF is needed to help pay for an estimated $7 million worth of expenses that will be incurred to build the underground parking garage. Fleming, though, said the project is not currently expected to ask for a transportation development district tax. That’s significant because a TDD would impose a special 1 percent sales tax on the grocery store.

“We want to keep the groceries as affordable as possible,” Fleming said. “There already is a concern about how regressive sales taxes are on groceries, so we want to avoid that special tax.”

The project also is expected to ask for about a $2.25 million no-interest or low-interest loan that would be used to equip the grocery store with items such as freezers, shelving and other items needed to make the store functional. The loan would be repaid to the city as long as the grocery store hit certain sales targets.

This drawing shows a northeast perspective of a proposed grocery store and apartment building at 700 New Hampshire St.

This drawing shows a northeast perspective of a proposed grocery store and apartment building at 700 New Hampshire St.

• A key piece of federal assistance also will be needed. The project will apply for federal new market tax credits. Those tax credits will be used to help finance the project, which is expected to have a total private price tag of more than $20 million.

Those tax credits are awarded through a competitive process. If the project were not awarded the tax credits, Fleming said the project would be in jeopardy. The development group should know in about a month whether it has won any tax credits this year. Fleming believes the project stands a good chance of winning tax credits.

“I think the odds are high that we will get the credits, but it is not a simple process,” Fleming said.

He said the fact that the downtown area and surrounding neighborhoods are part of a “food desert” should go a long way in securing the tax credits. The food desert designation refers to residents needing to travel a good distance to have access to fresh food. Both the North Lawrence and East Lawrence neighborhoods have been advocating for a downtown grocery store to address the food desert issue.

If approved, this will be the sixth store for Queen’s Price Chopper. It operates stores in Overland Park, Paola, Spring Hill and Bonner Springs.

Reilly said demolishing the Borders building to allow for a larger store to be built is a key part of the plan. He said the company explored using the existing Borders building but didn’t feel comfortable that it would be large enough to act as the full-service grocery store that he believes community members want.

“This will allow us to have the full variety of offerings that will make it a destination for shoppers,” Reilly said. “You want a store that the community can be proud of, and we know the store has to have what the customer wants.”

Comments

Kevin Kelly 5 months, 1 week ago

"The loan would be repaid to the city as long as the grocery store hit certain sales targets." Time to roll the dice again...........

Richard Heckler 5 months, 1 week ago

Will this store be open all night?

"the development group is seeking to do an end run around a set of covenants"

Do covenants get any respect?

"The loan would be repaid to the city as long as the grocery store hit certain sales targets." = too damn risky. While east Lawrence may well be a food desert this store is not that far away from another grocery store to dictate success in paying back the loan. Forget it!!! Taxpayers cannot afford to absorb the loan.

One party party involved recently flipped taxpayers the bird and walked away with $180,000 tax dollars. Taxpayers cannot afford such reckless behavior from the developer or from city hall. Why did City Hall allow this rip off?

Why are taxpayers being forced to finance the parking? No way jose' !!!

Had Hobbs-Taylor residents known this was going to take place some of those dwellings might well be empty as we speak.

David Klamet 5 months, 1 week ago

What would this bring to Lawrence? 1. A grocery store downtown (Good) 2. More apartments and profits for developers with reduced risks. (???) 3. A modest number of low to moderate income jobs. (???)

What does Lawrence need instead? 1. Companies to hire skilled people for high(er) paying jobs. 2. Anything that attracts #1. Does this project do that?

Companies seeking skilled/professionals will change the nature of Lawrence. Some might prefer Lawrence as it is, (I might be in that group), but without change there will be little incentive for graduates of our university to stay here.

Either way, do we want the situation where developers get a chance to profit while reducing their risks while the city takes on risk and gains what?

Question #1: Is this the craziest proposal ever presented to the city?

If no to question 1. What is the craziest proposal?

Rosemary Morris 5 months, 1 week ago

There is no comment from David Holyroyd today!! Yes, people, he really does not pay his county taxes. He owes for the years 2013, 2014, 2015 and most likely 2016. Does this anger you? Why should we as citizens of this municipality bear the burden of Mr. Holyroyd (and others not mentioned)? I believe that Douglas County is about to start working on 2012. Sheriff's sale on the courthouse steps? I guess I am totally naive to believe that we should be responsible for our own properties. It is the fundamental debt we pay no matter if we agree on how the city is run. If you don't like it, move. Sell your property. If you can't sell it, give it away. If you have to be homeless, we will then take care of you. Until such time, pay your damn taxes.

Richard Heckler 5 months, 1 week ago

How many properties in Douglas County are the developer(s) delinquent?

They have been delinquent in other counties I do believe.

Perhaps there needs to be a mandate that declares any property delinquent on taxes establishes a lien whether it be the county of city hall as the lien holder?

WE taxpayers need all tax dollars paid to keep our tax obligations fair and reasonable.

Rosemary Morris 5 months, 1 week ago

Thank you, Richard! I do know that in Russell County three years is when a property goes to the courthouse steps. Douglas County may not have the manpower to go any faster, but five years before any processing starts seems to be much too lenient. Landlords, developers, and "people in the know" play the game to their advantage. Yes, they pay interest and penalties but have the use of their monies to leverage.

Brett McCabe 5 months, 1 week ago

A really, really, really bad proposal. A loan to buy your walk-ins?

We need redevelopment in the downtown, and the idiotic low-income housing restrictions implemented by the idiotic commissioners don't help, but this request puts a stain on all requests.

As the pro-sprawl commission continues its 1950's planning strategies, we can expect even more bad ideas in the future.

Thanks, also, to the self-important association of east lawrence for helping to foist these incredibly stupid distractions on the community. Your collective snobbery and anti-lawrence emphasis continues, unabated.

Richard Heckler 5 months, 1 week ago

What makes you think the Old East Lawrence Neighborhood Association knew anything about these reckless and insane requests?

Tony Peterson 5 months, 1 week ago

What's your beef with East Lawrence? You never turn down a chance to make some sort of disparaging comment about how stupid, or arrogant, or snobbish, or anti-Lawrence the residents residents and/or neighborhood association are. Did you have a bad childhood here or just have a fixation on hating East Lawrence? If you don't like it then just stay away and get over it. We won't miss you.

Tony Peterson 5 months, 1 week ago

Just to clarify, I also think this is a really BAD idea but it has nothing to do with it being on the edge of East Lawrence. The downtown area really needs a grocery store but this is too much trying to be shoehorned into a much too small area.

Kendall Simmons 5 months, 1 week ago

And do we need more apartments in Lawrence whose developers get subsidies???
As an aside, anyone know what the proposed rent on these apartments will be?

Jake Davis 5 months, 1 week ago

So this Compton character screws us taxpayers out of $180k in delinquent taxes and now he has the nerve to come ask us to incentivize his apartment complex disguised with a grocery store...screw you and your $2 million dollar home you live in.

I would like to see a grocery store more convenient for North Lawrencians and downtown apartment dwellers, but I do not support this irresponsible developer to help him monetize his investments at our cost!!!

David Holroyd 5 months, 1 week ago

Rosemary, here I am..BACK! You obviously do not understand how payment of back taxes works. Any back taxes incur interest, so that said...the community is earning money from me.

You see, the difference is: My property is not in foreclosure for back taxes. The local developers and attorneys have had such a situation. Not I , Ms. Rosemary.

Lesson 101. Read the laws. As for tax sales regarding some cities, they may even go 6 years.

Rosemary, more folks would pay the taxes if the valuations were in fact fair and not inflated. Next the mill levy is too high because folks like you Rosemary believe in spending as fast as the pig can slop at the trough.

Read the rules...repeat..you do not see mine in foreclosure...and on top of that you and the community get more from me.

Lawrence is really slow.............. btw, Rosemary,,you want to buy a property...I can arrange that for you...taxes included :)

Richard doesn't even understand taxes and how the system works...what's Russell county got to do with anything anyway...Rosemary..maybe Sedgewick since you may very welll be the one who sends letters with no return...the very letters that the next time will end up with a Postal Inspector!

David Holroyd 5 months, 1 week ago

Rosemary,,,please spell the name correct. It is : HOLROYD...or known to Carol Bowen as SNARKY...

Rosemary,,,relax its Good Friday and be a good girl.well maybe man, and boil an egg, decorate it and hide some jelly beans....

Always remember, the community is benefitting from my back taxes incurring interest.

Unlike, Mr. Fritzel who supposedly paid a fine for Varsity House but it was in fact a DONATION.....tax deductible..no lesss. You can thank your friendly band of commissoners for that arrangement. And the city manager...what was his name?

Did it start with a C ?

David Holroyd 5 months, 1 week ago

Richard, the county does place a lien! Inform yourself.

Kendall Simmons, surely not the one benefitting from the Big Event, but anyway...yes you do benefit..the county charges interest and you get the taxes plus interest. Inform yourself!

Very unlikely that a homeowner would let their house go into foreclosure for just back taxes. Inform yourself of the way it works. Ask any employee at the Court House treasurer's department. , again inform yourself

When back taxes are paid, it is a Big Event.

But unlike the local attorneys and developers who let the property go for $1 that is only a Big Event for them...but they will still be paying the ongoing specials...inform yourself.

Rosemary, did you get the eggs died and find the jelly beans..Share them with Richard and Kendall Simmons...make this easter a Big Event for them.

Richard Heckler 5 months, 1 week ago

"Richard, the county does place a lien!"

So when should taxpayers expect to get the $180,000 in back taxes?

Rosemary Morris 5 months, 1 week ago

David Holroyd, sorry for the misspelled name. BTW, eggs are dyed, not died.

David Holroyd 5 months, 1 week ago

Rosemary, I accept your apology for the mispelled name. It happens all of the time. My eggs died!

Richard, what $180,000 in back taxes are you talking about?

Would you elaborate?

Rosemary Morris 5 months ago

David, to answer for Richard........inform yourself.

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