You want statistics. I’ve got ‘em. KU’s football team has a better 2016 record than Oklahoma, K-State and Missouri. After 96 hours of college football on a Labor Day weekend, you will go through 192 bags of Doritos, three overheated remote controls and not nearly enough ScotchGard. I even have a couple of new statistical reports on Lawrence’s economy. Retail sales are surging while home sales are slumping.
• First, a look at retail sales. In a trend that has held steady pretty much the entire year, Lawrence continues to lead the state in sales tax growth.
Lawrence officials recently received their August sales tax check from the state, and collections were up 3.8 percent compared with the same one-month period in 2015. (A reminder: Even though the report is for August, due to a lag in reporting, the report actually measures sales activity that happened about 30 to 60 days ago.)
As usual, the more important number is the cumulative total for the year. That’s where Lawrence continues to outshine the other large retail centers in Kansas. Here’s a look:
— Lawrence: up 5.3 percent
— Olathe: up 3.9 percent
— Topeka: up 3.2 percent
— Overland Park: up 2.3 percent
— Kansas City: up 1.7 percent
— Johnson County: up 1.5 percent
— Manhattan: up 1.4 percent
— Sedgwick County: up 1.2 percent
— Salina: down 2.8 percent
— Lenexa: down 6.1 percent
The numbers are good news for more than just the city’s retailers. If the trend continues, it will be good news for the city’s budget too. The city budgeted sales tax revenues to grow by 3.7 percent for 2016, or in dollar terms, about $940,000. If the city can finish the year with a 5.3 percent increase, it’ll exceed its estimates by about $360,000. Of course, things could change quickly, especially if Lawrence has a lackluster holiday shopping season for some reason.
As for why sales tax collections are on the rise, that’s always a bit of a guessing game. City officials, though, continue to point to a few key areas. The city hasn’t yet analyzed the August sales tax distribution, but in a report on the July distribution, the city noted the sale of building supplies continues to be the biggest driver of the increase. Sales of building materials are up 27 percent compared with the same period a year ago. The biggest change in that sector has been the opening of Menards store near south Iowa Street.
The city also notes the auto industry and the grocery store industry also are doing well. Year to date, motor vehicle and parts sales are up 8 percent, while sales from food and beverage stores (not to be confused with bars and restaurants) are up 7 percent.
There is one area that has declined significantly in 2016, but consumers likely don’t mind. Sales taxes charged on utility services — think water, gas and electricity bills — are down 11 percent year to date. Rates for those services haven’t gone down, but usage evidently has. But that too could change quickly.
• The news isn’t as bright for home sales. The Lawrence Board of Realtors recently released figures for July home sales. It was a rough month.
Home sales in Lawrence fell by about 23 percent in July, compared with the same period a year ago. The weak July pushed year-to-date totals squarely into negative territory. Year to date, home sales are down 5.3 percent, for a total of 756 sales.
The reason for the downturn is beginning to sound like a broken record. (Did somebody mention records? I hear KU’s football team has a better record than K-State’s.) The supply of homes on the market is very tight, according to real estate professionals.
Carl Cline, president of the Lawrence Board of Realtors, said the lack of homes for sale is having a “significant impact” on the market. “The drop in July sales is attributable to a shortage of supply and not a drop in demand,” he said. “Segments of this market have buyers in line for just the right listing.”
The tight supply of homes has been a pretty consistent theme for the Lawrence market all year. Really, it has been building for a couple of years. In 2014, the median number of days a home sat on the market before selling was 34. In 2015 that dropped to 24 days. Thus far in 2016 it has dropped to 16 days.
Other statistics of note from the recent report include:
— Despite there being a shortage of homes on the market, the sales of newly constructed homes dipped a bit in July, falling to 11, compared with 13 in July 2015. Year to date, however, sales of new homes are up by nearly 24 percent. Lawrence builders are on pace to post their second straight year of gains.
— The number of active listings on the Lawrence market stands at 288, down from 317 at the same time in 2015 and 417 in July 2014.
— Home prices are starting to rise significantly in Lawrence. Through July, the median selling price of homes is $176,175, which is up 6.8 percent compared with the same period a year ago. If July was any indication, those numbers may rise more rapidly during the rest of the year. The median selling price for homes in July rose 13.9 percent compared with July 2015.
Sales tax collections on the rise in early part of 2015; city sharpening pencil to build $50 million sewer plant on budget
While the forklift drivers are dutifully unloading all the clearance rack Easter candy at my house, there’s a new report out that shows Lawrence shoppers did a pretty good job of keeping the cash registers ringing during the Valentine’s Day period as well.
The latest sales tax report from the Kansas Department of Revenue shows taxable sales in Lawrence from the mid-February to mid-March period were up 4.2 percent compared with the same period a year ago. The year-to-date numbers for 2015 are even more impressive. Thus far, taxable sales — most of which are retail sales but also include sales taxes on items such as your utility bills — are up 5.6 percent compared with the same period a year ago.
The 5.6 percent growth rate puts Lawrence in the top half of the large retail centers in the state. Here’s a look at how other Kansas communities fared:
— Kansas City: up 6.4 percent — Lenexa: up 7.6 percent — Manhattan: up 3.4 percent — Overland Park: down 0.3 percent — Salina: up 5.6 percent — Sedgwick County: up 3.1 percent — Topeka: up 2.1 percent
It will be an interesting year to watch retail sales in Lawrence. There’s lots of activity on south Iowa Street. This year will be the first full year for Dick’s Sporting Goods in the market, PetSmart just recently opened its store next to Dick’s at 27th and Iowa streets. As we previously reported, Ulta Beauty and the Boot Barn also are scheduled to open later this year at the 27th and Iowa street shopping center. Then, just down the road, Menards will open the largest home improvement center in the city near 31st and Iowa. There are multiple pad sites available around that store, although there haven’t been signs yet that tenants have been found for those spaces. And there also is development out west. Sprouts is opening a new grocery store just north of the Sixth and Wakarsusa interchange.
All those stores have the potential to generate significant amounts of sales tax revenue, so it will be interesting to watch whether Lawrence’s sales tax totals over the next couple of years rise significantly. There’s certainly been a debate among some about whether the new stores will add new sales to the Lawrence market or whether it will just shift existing sales around. The numbers probably won’t be definitive. (That’s a way of saying we’ll probably continue to argue about that point.)
But thus far, retail sales in Lawrence are on an impressive run. In 2014, sales tax collections grew by 4.1 percent, which was the second fastest growth rate of the eight major cities that we track. That’s despite the fact that Lawrence continues to have per capita retail spending that is significantly less than other cities. In 2014, our per capita spending was $15,857. Fellow university community Manhattan had per capita spending of $19,236, or about 20 percent greater than Lawrence’s. Maybe Lawrence never will have per capita spending reach that level since we are so close to the major shopping areas in Kansas City.
But there certainly have been arguments that Lawrence can attract more outside-the-community shoppers from places such as Franklin County and Jefferson County who may find it more convenient to run into Lawrence than to deal with the larger crowds in Kansas City. If Lawrence could just increase its per capita spending — either through purchases made by Lawrence residents or by people outside the community coming here to shop — by 1 percent, it would add about $15 million in sales to the Lawrence economy. That $15 million in sales would add about $400,000 a year in new sales tax revenues to the city and county coffers.
If Lawrence somehow could grow its per capita spending levels to equal Manhattan’s, that would amount to about another $337 million a year in retail spending in the city. That would add about another $8.6 million to the sales tax coffers of the city and the county.
In other news and notes from around town:
• When it comes to big numbers, plans for a new sewage treatment plant south of the Wakarusa River kind of take the cake at Lawrence City Hall. If you remember, bids for that project created a few too many big numbers last month. Commissioners rejected the bids after they came in about $5 million more than expected. Well, the project has been rebid, and the results have proved that the best way to get a project to come in closer to engineers' estimates is to . . . raise the engineers' estimates. Previously the sewer treatment plant had an engineers' estimate of $45.9 million. When the project was rebid, engineers increased the estimate to $51.3 million, largely because construction costs are on an upward trend right now.
New bids for the project did come in below the $51 million estimate, but are still above the $45 million to $46 million that city officials have budgeted for. Garney Construction submitted the low base bid at $47.15 million. Crossland Heavy Contractors was the only other bidder at $49.3 million.
City officials, though, are optimistic they’ll be able to make the new bid work. Unlike the last time the project was bid, the city asked for several bid alternates that will allow certain parts of the project to be deleted. By making some deletions, it appears the bulk of the project will be able to be constructed within that $45 million to $46 million range. That price range is important because anything above that would likely require sewer rate increases greater than those that already have been approved.
“The City Commission has made it clear that it wants to move ahead with this project, but it wants to move ahead within the already approved rate plan,” City Manager David Corliss said.
Staff members are looking at the possible deletions and are expected to make a recommendation to the commission in late April.
“But we have some good options now,” said Dave Wagner, the city’s director of utilities.
As far as what may be cut, some options are directly related to the technical sewage treatment operations of the plant, while others are related to office space, vehicle storage and other such ancillary functions.
City officials say the new plant is needed to help the city meet EPA treatment requirements and also to give the city the needed treatment capacity to grow in the coming decades.
Plans being developed for former Sunrise Garden Center in eastern Lawrence; sales tax numbers show local holiday spending down slightly
Plans are in the works between a new nonprofit and a private business to take over the vacant eastern Lawrence property that formerly housed the Sunrise Garden Center.
This spring will be another season that Lawrence green thumbs won’t be able to go to Sunrise Garden Center for bulbs, plants or just advice on what this green stuff is on their thumbs. If you remember, Sunrise closed its doors in late 2013, and the 3.5 acre site at 15th and New York streets has been vacant ever since.
But a new nonprofit is putting together a plan to buy the property, along with a Lawrence-based business that manufactures tofu. Melissa Freiburger is the co-founder of The Sunrise Project. She said her nonprofit has teamed up with Central Soy Foods in an effort to purchase the site. Central Soy Foods would use the site to manufacture its tofu and tempeh products, and the nonprofit would use the greenhouses and other assets to host youth programs and other events that educate about the importance of locally grown foods and other issues of sustainability. Freiburger envisions the site serving as a community greenhouse and also hosting cooking, gardening and similar workshops.
“We really just want to create a very vibrant green space in the community,” Freiburger said.
Central Soy Foods is led by longtime Lawrence businessman David Millstein. If you remember, we reported back in August that Millstein was seeking a new location for the company’s production plant. But a plan to move the operation to a rural homestead didn’t win the necessary approvals. Currently, the company — which has been around since 1978 — operates on a fairly small scale. It produces about 2,000 pounds of tofu and tempeh per week. It primarily sells its products in local grocery stores and a few chains in the Kansas City area.
Millstein told me he thought the site would work very well for the project. He’s proposing to keep the two gabled greenhouses, in part, because he considers those structures to have historical value. Millstein has been a longtime historic preservationist with several buildings in downtown Lawrence. He said he’s contemplating removing the one hoop greenhouse on the site and replacing it with a production facility. He said one other food producer in the area has expressed an interest in sharing the space. He also said he thinks there could be someone who would want to operate the greenhouses to sell micro greens or other such products to area restaurants and grocery stores.
“It has a chance to be a really symbiotic green project,” Millstein said.
The project, though, does have to win some approvals from City Hall. Millstein said he is hopeful neighbors will find the project compatible with the neighborhood.
“I think there probably would be less commotion with this project than when it was Sunrise,” said Millstein, who said the most of the time the site would have fewer than 10 employees at it.
The project also still has some financial questions. Freiburger said the nonprofit is seeking to raise $250,000 to meet its share of the purchase price of the property. The nonprofit — whose legal 501(c)3 name is Lawrence Community Food Alliance — has started a fundraising drive. Freiburger said one neighbor of the site already has pledged $25,000 to the project.
“We feel like it really can become something amazing for the neighborhood,” said Freiburger, who lives near the property. “And the longer the site sits vacant, I know there is a fear that it will become apartments or something like that.”
People can find out more information about how to donate at the group’s website, sunriseprojectks.org.
In other news and notes from around town:
• I don’t know about you, but I didn’t have much tofu in my stocking this past holiday season. (I once did ruin a good pair of shoes, though, trying to hide tofu in my stockings at a dinner party.) Regardless, there are new numbers out about retail sales in Lawrence during the holiday season, and they suggest stockings may have been a touch light this year.
The city has received its latest sales tax report from the Kansas Department of Revenue. Technically, the report is the first one for the 2015 calendar year, but since sales taxes are paid in arrears, the numbers provide a picture of sales activity during the holiday season. This report generally shows sales from about mid-November to mid-December.
The report found sales tax collections in Lawrence fell by 1.4 percent, compared with the same period a year ago. Lawrence seemed to be on the wrong side of the trend this past season. Of the other large retail markets in the state, only one other posted a decline. Here’s a look:
— Kansas City: up 1.8 percent
— Lenexa: up 2.2 percent
— Manhattan: up 2.3 percent
— Overland Park: down 3.5 percent
— Salina: up 5.1 percent
— Sedgwick County: up 0.4 percent
— Topeka: up 0.8 percent
But we don’t yet have a full picture of the holiday spending. The next report will more fully capture that last two weeks before Christmas, so perhaps here in Lawrence we were just later in getting our holiday shopping started.
As always, City Hall officials will keep a close eye on sales tax collections this year. Healthy sales tax growth is an important part of the city’s budget. It will become an even more important aspect if commissioners are serious about trying to figure out how to build a new police headquarters without increasing taxes.
Sales tax revenues in 2014 grew by a very healthy 4.1 percent. One month isn’t anything to fret about, but if Lawrence wants to match or exceed that pace in 2015, it won’t want many more reports like this most recent one.
Here I thought I was the only one who visited my banker around Valentine’s Day. I’ve found that a home equity loan is useful when you’re trying to buy a year’s worth of forgiveness.
But apparently I’m not alone because a new report from City Hall shows retail spending spiked during the mid-February through mid-March period. The city’s latest sales report shows retail spending increased by 6.3 percent during the mid-February to mid-March period, compared with the same period a year ago.
It is always risky to put too much stock into one month’s worth of numbers, but we’ll see if this is the beginning of a spring spending surge. Regardless, retail sales in Lawrence are off to a solid start in 2013. Sales tax collections through the April reporting period are up about 3.1 percent compared with the same period a year ago. (The most recent report was for the April reporting period, but because of a lag time in processing, the numbers represent sales generally made in mid-February to mid-March.)
Here’s a look at how Lawrence’s retail sales totals stack up to past years. As always, the number in parenthesis is adjusted for inflation. Take a close look at those numbers, because for the first time in awhile the adjusted numbers show that Lawrence basically has returned to the pre-recession numbers of 2008 and early 2009. In other words, perhaps we have about dug out of that hole.
2013: $456 million
2012: $442.4 million ($448.5 million)
2011: $422.3 million ($437 million)
2010: $406.2 million ($433.6 million)
2009: $421.4 million ($457.22 million)
2008: $421.1 million ($455.2 million)
As for 2013, Lawrence’s growth rate is slightly above the statewide growth rate of 2.9 percent. Here’s a look at how Lawrence’s growth rate of 3.1 percent stacked up with some of the larger communities in the state:
• Emporia: up 2.9 percent
• Hays: up 3.3 percent
• Kansas City: up 5.8 percent
• Manhattan: down 3.2 percent
• Olathe: up 3.8 percent
• Ottawa: up 5 percent
• Overland Park: up 1.5 percent
• Shawnee: up 4.5 percent
• Topeka: down 0.1 percent
That list tells me one thing: My wife has been shopping in Kansas City. Dangit. I should have kept that joke to myself. Now, I have to find my banker’s number again.