Lawrence city leaders take first step in considering multimillion-dollar economic incentives request for West Campus project
City leaders have taken the first step in the potential creation of special taxing districts for a mixed-use development on the University of Kansas’ West Campus that will include research-related buildings, retail businesses, affordable and market-rate housing and a child care center.
As part of its meeting Tuesday, the Lawrence City Commission voted 5-0 to establish a Tax Increment Financing (TIF) district for the project and to refer the first of two plans for the district to the city’s Public Incentives Review Committee for review and recommendation. More specific project plans and related financial assessments will have to return to the commission for consideration, and if approved would be the step that activates the TIF district and other incentives the project is requesting.
Commissioner Brad Finkeldei said the TIF district — which will reimburse the project’s developer for infrastructure such as sewers and streets — benefits the project as well as the broader infrastructure system, which he said is the intent of such districts. He also expressed appreciation for other aspects of the project, specifically the child care center and affordable housing.
“I think this is a very important first step on a very good project,” Finkeldei said.
The project will serve as the gateway to the KU Innovation Park and includes research-oriented office space, as well as residential, retail, restaurant and child care uses, according to a staff memo to the commission. West District Improvement Company, which is owned by the KU Endowment Association, is proposing the project and requesting 95% of TIF-eligible property taxes as well as the levy of an additional 1.5% sales tax Community Improvement District (CID).
KU Endowment Senior Vice President Monte Soukup told the commission that the child care center would be an expansion of the Hilltop Child Development Center, providing spots for infants to age 2, and that a grocery store, green space and a trail connection were also planned for the 80-acre site. Soukup said the project will also donate 1.5 acres to the nonprofit Tenants to Homeowners for the construction of permanently affordable housing in a future phase.
Commissioner Bart Littlejohn said he was happy to hear that the project included both affordable housing and child care, both of which he said were strong needs in the community. Commissioner Amber Sellers and Mayor Courtney Shipley both emphasized the importance of the project continuing communication with the nearby neighborhood. Vice Mayor Lisa Larsen, who asked about when the affordable housing component would be built and what percentage of the overall housing it would represent, said she was interested in the ongoing review.
“I think there are interesting aspects of this project and I’m looking forward to hearing more about it,” Larsen said.
The initial infrastructure investments were estimated at $15 million initially and $25 million at full build-out — though representatives with the project said those amounts have likely increased — and include sewer lines, street construction and a traffic signal at the intersection of 21st and Iowa streets, according to a city staff memo. West District Improvement Company will be paying the upfront costs for the infrastructure improvements and is requesting the TIF and CID sales tax to help reimburse it for a portion of the investment. More specifically, West District Improvement Company will be reimbursed for 95% of the TIF-eligible property tax revenues generated on the added property value, and those revenues will go toward reimbursement of the improvements (also known as “pay as you go”). By state statute, only certain project expenses are eligible for reimbursement, including land acquisition, site work and “horizontal infrastructure,” and parking and landscaping. The CID would impose an additional sales tax of 1.5% on top of the local sales tax rate to help reimburse eligible expenses.
Economic Development Coordinator Britt Crum-Cano said that two studies related to the incentives request are ongoing, specifically a feasibility study and a “but for” analysis that looks at whether the incentives are financially necessary for the project to proceed. Those studies will also include more specifics about the financial value of the incentives package. Crum-Cano said the studies would be reviewed by the Public Incentives Review Committee when it considers the first of two expected plans for the project. PIRC’s recommendation regarding the plan and the incentives will then return to the City Commission for consideration.
In other business, the commission:
• Voted unanimously to defer an amendment to the city’s land development code that would allow more bars in downtown under certain conditions. As the Journal-World reported in August, John Brown’s Underground, a speakeasy-style bar at 7 E. Seventh St. that opened in 2014, proposed a change to city code after failing to adhere to the city’s alcohol sales limits on multiple occasions. The code dates back to 1994 and was created with the goal of preserving the retail character of downtown and preventing it from becoming a bar district. Several commissioners said they thought the issues raised by the proposed amendment deserved a broader conversation with downtown retailers and the community and potentially should occur as part of the city’s ongoing development code update. Instead of denying the request, the commission asked for city staff to bring back a proposal before the end of the year for a possible moratorium on the alcohol sales limit that would apply to John Brown’s and other businesses in the same situation until the city completes the code update.
• Voted unanimously to adopt increases for the city’s solid waste collection rates, including a 3% increase for residential customers, a 5% increase for commercial carts, a 6% increase for dumpster rentals, and a 10% increase for downtown trash collection. The rate increases cover costs for labor agreements, projects and equipment replacements, as well as the city’s recently completed five-year agreement with the Hamm landfill and recycling facility and “significant economic pressures increasing fuel, equipment and supply costs,” according to a city staff memo. Commissioners have previously discussed rate increases for water and sewer service, and voted as part of the consent agenda to finalize a 8.75% rate increase.
Editor’s note: A previous version of this article misstated how the TIF-eligible property tax revenues would be reimbursed.