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.
Surely I’m not alone in rummaging through the closet to find those stylish floral print shirts, knee-length shorts, black socks and flip-flops.
Yes, if nothing else, I’m day-dreaming of heading south.
Well, south as in south of the Wakarusa River, may be a direction to keep an eye on in future months. Plans have been filed at the Lawrence-Douglas County Planning Office for a new commercial development south of the Wakarusa River.
Douglas County property owner Michael Flory has filed plans to rezone 29 acres of property at the southwest corner of U.S. Highway 59 and Leary Road (or North 1100, for those of you who don’t know the Learys) to commercial from agricultural.
For those of you still needing some help with the geography, North 1100 Road is about a mile south of the Wakarusa River. The road basically intersects with U.S. 59 at the point where the highway used to switch from four lanes down to two lanes.
Thus far, the development plans aren’t grand, but they are notable. Flory said he envisions the property developing in phases. The first phase would be a unique type of storage unit development. Flory said he has acquired plans to build storage units that look like typical suburban houses. The portion of the storage units visible from the highway and from North 1100 Road would look like the back of a home with a fenced-in yard. A second phase of the development would call for a neighborhood-oriented convenience store, Flory said. A third phase of the development would be left unplanned for future commercial development.
The plans are notable because they are one of the first signs that development speculation south of the Wakarusa River may be entering a new phase.
Lawrence city commissioners in the coming weeks again will revive discussions of starting construction of a $55 million sewage treatment plant just south of the river.
When that plant gets built, the city will have the ability to provide sewer service to large portions of ground south of the Wakarusa River. Add the fact that a new four-lane highway is running through the area — and the South Lawrence Trafficway just north of the river will be completed — and you’ve got an area that would appear ripe for development.
Flory told me he has owned this 29 acres of property for 10 years in anticipation of the sewage treatment plant being constructed. He’s grown tired of waiting. Flory is applying for the new rezoning through the Douglas County Commission rather than waiting for the property to eventually be annexed into the city limits. But if the county rezones the property to commercial use, then when the day comes that the property gets annexed into the city, it likely automatically would convert over to one of the city’s commercial zoning categories.
The rezoning request will need to win approval from both the Planning Commission and the Douglas County Commission. Assuming those approvals, Flory said he would like to get started on the storage unit development in the next year.
As for the bigger decision on the $55 million sewage treatment plant, I expect city commissioners to have a discussion on that in March. I believe this current city commission would like to make some decisions about the future of water and sewer rates before the new commission is sworn into office in early April.
But the sewage issue will be worth watching closely. (Aren’t you jealous of my job? “What did you do today, Chad? I kept an eye on the sewage situation.”) Even if this current group of city commissioners decides to move forward with the $55 million plant, there still will be plenty of time for the next batch of city commissioners to change course on the project.
The rate implications of the new plant — along with other improvements — are expected to cost the average Lawrence homeowner about $500 in extra water and sewer bills over the next five years. If the city doesn’t get the new plant built in time, though, the city likely would have to place limits on new construction in the future. I expect water and sewer rates will become an issue in the current City Commission campaign. In other words, our politics and our sewer are going to mix.
Now, I bet you are really jealous of my job. Soon, when I find what I’m looking for in my closet, you’ll be jealous of my wardrobe too.