I am writing in response to Mr. Herynk’s recent letter to the editor and to reply to the recent Journal-World editorial on the use of tax abatements that are requested by developers in the city of Lawrence. I work with several active developers in Lawrence and am active in requesting incentives for various projects we work on in downtown Lawrence. I would like to make the following points in response:

l In-fill development should be favored over sprawl; density is good in the downtown area.

l None of the taxpayers nor any of the taxing districts such as the city, county or school district, are directly spending dollars on any of these projects. Instead, they are agreeing to basically defer collection of new tax dollars that will be generated by the project itself — but will only be generated if the project is built.

l These districts are all “pay as you go” which means that the developers pay up front all development costs.

l The developer takes the risk that the revenues generated by the project will not repay this investment. Again, there is no financial risk to the city, county or school district.

l No incentives are granted without a separate study prepared by a consultant hired by the city that confirms that “but for” the incentives granted, the project would not be built. I understand the natural skepticism of some citizens such as Mr. Herynk who reasonably question whether these projects would be built without these incentives. I can, however, answer that question. The answer is no. The incentives are absolutely necessary to make the projects financially feasible, especially when the cost of parking structures is factored in.

l After the study is completed, the project is reviewed by the city’s Public Incentives Review Committee. Part of the analysis that is done by the PIRC includes weighing the costs and benefits of the project including the additional economic activity generated by the project in comparison to the expected costs to the governmental districts in terms of potential additional cost of governmental services.

l Under downtown zoning rules, a developer is not required to build off-street parking as part of the requirement of building a project. The incentives are used by the developer to help pay for the parking and other infrastructure needs of the project that would otherwise be paid by the city.

l Even if the project is not generating significant tax collections for the city for some initial period of time, the project will still generate significant jobs and economic activity. If you build a $20 million project, normally expect half, or around $10 million, of that project cost will be paid out for labor to build the project. This employs many hundreds of carpenters, electricians, plumbers, laborers, etc. After the term of the project incentives expires, then the project will be added to the tax rolls and will then contribute significantly to the city’s tax base.

l Treanor Architects was able to utilize a Neighborhood Revitalization District to construct a new office building in downtown Lawrence. Treanor remodeled an old building that was built in the ’60s as a car dealership into a first-class office building. Since then, the firm has added staff and grown by around 20 percent its employment base in Lawrence. I believe this is a great example of a positive economic benefit that is a result of incentives granted by the city.

Part of the privilege of living in Lawrence is the spirited debate that our residents engage in about the future growth, and direction of our city, especially the downtown area. For our part, we firmly believe that in order for downtown to thrive and grow, the kinds of projects that are being built with the support of tax incentives are vital. Without that support, I believe (based on the numbers) that none of these projects would be built.