Downtown Lawrence grocery project loses Price Chopper tenant, but plans still moving forward

photo by: Nick Krug

The former Borders building located at the southeast corner of Seventh and New Hampshire streets is pictured Wednesday, Feb. 28, 2018. It the proposed site for downtown grocery and mixed-use building.

Plans to bring a grocery store to downtown Lawrence are still alive, but still complicated and uncertain.

A proposal to put a 40,000-square-foot grocery store on the site of the former Borders bookstore at Seventh and New Hampshire now includes plans for a four-story mixed-use building, instead of the previous three-story plan.

But the project is short on something else: a tenant for the grocery store. A previously announced deal with Queen’s Price Chopper out of Kansas City has fallen apart.

“The most accurate thing that can be said at this point is that we don’t have any deal with anybody,” Bill Fleming, an attorney for the development group, told me.

Doug Compton, who leads the development group along with Lawrence businessman Mike Treanor, confirmed that Queen’s Price Chopper is no longer considering the project. The development group in early 2017 announced it had a letter of intent from Queen’s Price Chopper to locate on the site of the former Borders bookstore. As time has passed, that deal has fallen apart.

Compton said the developers had the makings of a deal with Kansas City-based Ball’s Price Chopper, but he’s not sure that deal is going to come to fruition either, as the project continues to drag on.

“I’m not sure we are going to be able to keep him on board until we get a permit,” Compton said.

Compton said he has reached back out to Lawrence-based Checkers grocery store about locating in downtown. Checkers was the grocery store that originally was proposed to be part of the downtown project when talks began in 2014.

“This may be a situation where you dance with the one that originally brought you,” Compton said.

J.R. Lewis, an owner of Checkers, confirmed to me that he has talked with Compton about the proposal again, but said no deal has been struck.

“We have scheduled a meeting to talk about it more,” Lewis said. “We will be visiting with Treanor’s team.”

The changes leave the timeline of the project very much uncertain. But some progress is being made to move it forward. The city’s Historic Resources Commission is scheduled to consider approval of the design plans at its October meeting.

There will be new information for that group to consider. Developers are asking for permission to make the proposed mixed-use building taller. The plans have long included tearing down the existing Borders building and constructing a new building that would have a grocery store on the ground floor and apartments on the upper floors. Originally, the plans called for a three-story building. Now developers are seeking a four-story building, which would accommodate about 72 apartments plus the grocery store.

Fleming said the reason for the change is that some residents along Rhode Island street — which is just east of the site — expressed concern about how close the large building would be to the street. The plans now call for the building to be set about 20 feet off of Rhode Island Street, but developers are asking for the extra story to help make up for some of the lost space caused by that setback.

How that design change will be received by planners is uncertain.

The project, however, does seem to be in a better place on one key issue: parking. For months, city officials had expressed concern that parking in the 700 block of New Hampshire Street wasn’t adequate to handle the grocery store project. Plans always have called for an underground parking garage beneath the grocery. But city officials weren’t sure that would be enough. There had been a proposal for a public-private partnership to build a parking garage across the street from the Borders site in the current two-hour free parking lot owned by the city.

That idea is no longer moving forward, Fleming said. He said a second look at parking by a city-hired consultant seems to have city officials more comfortable that the 115 spaces in the proposed below-ground garage would be enough when combined with existing spaces in the block. The surface parking lot that exists between the Borders building and the Hobbs Taylor Loft building, for instance, will remain.

We’ll see if that comfort about parking remains as the project works its way to the City Commission. Ultimately, a vote by the City Commission is still the big issue. That vote will involve financial incentives for the project.

The project needs tax increment financing in order to proceed, both Compton and Fleming said. That is a mechanism where new property taxes and sales taxes generated by the project would be returned to the developers to help pay for the costs of the underground parking. The developers are proposing to finance the underground parking garage privately and use the tax proceeds to help pay off the loan. That structure is important because if the project doesn’t produce enough tax revenue to pay the loan, the development group would be responsible for paying the loan rather than the city.

Like much else with the project, it is uncertain whether city commissioners are ready to offer an incentive for the grocery store project. Past commissions have offered similar incentives for downtown apartment projects, but several members of this commission ran on a platform that questioned incentives.

“I can’t predict, sitting here right now, what will happen at the Borders building,” Compton told me during a recent interview. “If you would have told me when we bought that building that we would be sitting on it for more than three years and not get the support we really were looking for from the city, I would have been surprised.

“In everybody’s defense, our first grocery tenant asked for some incentives that probably were a bit of a stretch.”

The Queen’s Price Chopper deal included a request for about a $2.5 million loan that would have helped furnish the grocery store portion of the building. Such an idea has since been dropped from the incentives package request.

What will it take to get a grocery store to come to downtown, though? Fleming said it will be a significant task. He hopes to win approval on the buildings design in October and then win approval from the City Commission in early 2019 for tax increment financing. That will put the developers in a position to start aggressively shopping the project to grocery store tenants again.

“I’m in the wrong business if I’m not optimistic,” Fleming said of the chances of landing a grocery store tenant. “But I will tell you these grocery store deals are really, really hard. I’m the guy that runs the numbers, and they are really hard to make work.”

Lots of people will be watching. Downtown is at an interesting point. I interviewed Compton for about two hours recently. He had a lot to say about the state of downtown. Look for those comments next week in Town Talk.

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