Turnhalle project earns preliminary approval for development incentives

photo by: Austin Hornbostel

The Turnhalle is pictured Jan. 24, 2024, at 900 Rhode Island St.

The historic Turnhalle building near downtown Lawrence is now in the running for a set of economic incentives that will help fund a project to convert the building into an event space and restaurant.

On Wednesday, the city’s Public Incentives Review Committee unanimously approved an incentives package that would aid Turnhalle LLC — owned by Lawrence residents Zarif and Mamie Haque — in revitalizing the 1869 stone structure at 900 Rhode Island St.

“I’m supportive of the project,” Douglas County Commissioner Patrick Kelly, a member of the committee, said ahead of the vote. “We, as a community, value historic resources and want to make sure we preserve historic resources. … Any time we can get community groups to work together to save those things which we, as a community, feel are valuable, that’s a step in the right direction.”

Specifically, the PIRC on Wednesday approved three types of incentives: a 15-year, 70% Neighborhood Revitalization Area rebate; a 20-year, 2% additional sales tax via a Community Improvement District; and Industrial Revenue Bonds providing a sales tax exemption on construction materials and labor.

But the PIRC is just the first step in securing those development benefits. A Community Improvement District is established through a city ordinance, which also sets the terms as presented in a development agreement.

An example of a development that recently was approved for this type of incentive was the University of Kansas’ project to develop a gateway to the KU Innovation Park called The Crossing. In the Turnhalle project’s case, its additional sales tax collections would be capped at $1.9 million through the life of the project.

“With the additional sales tax, a cap is placed on that so it’s not continuous for 20 years,” economic development analyst Sam Camp told the committee. “It’s related to what staff has identified as the funding gap for this project. That will be either a 20-year period, or until roughly $1.9 million has been collected from that sales tax by the developer, whichever comes first.”

As for the other two types of incentives, they’re subject to not just the city’s approval but that of two other taxing jurisdictions — Douglas County and the Lawrence school district — and will have to secure separate approvals from each of those three governing bodies before returning to the Lawrence City Commission for a final stamp of approval.

Most recently, requests from developer Tony Krsnich for the New Hampshire Street Lofts project and from Lawrence businessman Doug Compton to convert the former Borders bookstore space at Seventh and New Hampshire streets into a corporate headquarters have both been granted NRA and Industrial Revenue Bond incentives.

As a reminder, a Neighborhood Revitalization Area is part of a property tax rebate program applying only to the value of new improvements made to a property and not its base property value. In this case, the city, county and school district would each continue to receive 100% of the property taxes generated by the property, with the 70% rebate applying only to elements such as an approximately 835-square-foot addition slated for the back of the building to bring it into ADA compliance.

Broadly speaking, Camp said plans for the project also call for a complete rehabilitation of the historic building, from structural improvements to work on its windows, floors and exteriors. The basement would house 5,000 square feet of commercial and restaurant space, and the second floor would house a 4,500-square-foot community and event space.

Here are some other details about the project discussed during Wednesday’s meeting:

• Developers are likely looking at a roughly one-year construction timeline considering the work that’s left to do, according to Patrick Watkins, an attorney who represents the project’s developer. Camp added that the project’s development and performance agreements call for construction to be finalized sometime in 2026.

A letter from Watkins included with the technical report for the project estimates that the project will require an investment exceeding $5 million.

• As the Journal-World has reported, the basement of the building will add a commercial kitchen, and Watkins said it could house a separate independent tenant provided they use it in conjunction with the upstairs event space. That kind of collaboration will likely be crucial for the project to be a success, he said.

“We think that that’s probably the main economic driver for the Community Improvement District,” Watkins said. “We need sales tax to be produced at this building. Alcohol sales are not technically sales tax sales, so it’s going to be food, it’s going to be merchandise, it’s going to be anything that’s sold that would be generating sales tax in the basement.”

• Members of the PIRC weren’t the only ones who were supportive of the project. Dennis Brown, who served as president of the Lawrence Preservation Alliance from 2006 to 2022 and continues to serve as a board member, also voiced support for the project during the meeting’s public comment period.

“We’re pretty certain that the current ownership group is thinking more of this as community benefit for this project than profit,” Brown said. “This probably isn’t the way to go out and make a bunch of profit — it’s a very difficult project.”


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