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Lawrence City Commission approves fast-track economic incentive program for city business parks

This composite image from promotional materials shows a logo and rendering of Lawrence Venture Park.

With more than $9 million of special assessments on the line, the City Commission unanimously approved a fast-track incentives program that aims to bring tenants to Lawrence VenturePark.

The city-owned business park in eastern Lawrence opened more than two years ago but continues to seek its first tenant. It was not lost on commissioners that if the 400-plus acres of industrially zoned property remains vacant, the city — and by extension, local taxpayers — will be responsible for paying the assessments.

“The fact that we’re sitting on a huge bill that we’re paying for the assessments already, it’s time to really take perhaps another creative look at what we’re doing,” Mayor Leslie Soden said. “… I think it’s really important to try new ways, because clearly our old ways have not been working."

The special incentives program will cut out much of the city’s multistep economic incentives application process for industrial projects that meet certain criteria, and will provide added benefits such as free land. To be eligible for the “Catalyst Program,” projects would have to meet specific size guidelines, and the city would prioritize projects that provide employment and tax-base growth.

The program, which will also apply to East Hills Business Park next door, is temporary and will sunset after two years. The city recently revamped its economic incentives policy, but because it calls for an analysis that requires job creation and wage data, city staff and local economic development leaders argued that it can’t accommodate companies that want to construct an industrial building “on speculation.”

“They know generally that the market is good in our area and they want to do a project here, but they may not have a specific tenant lined up,” said Assistant City Manager Diane Stoddard. “They probably have a strong portfolio of companies that they work with.”

Steve Kelly, vice president of economic development for The Chamber, said that “speed to market” is critical for some companies, and that speculative projects provide the ability for a quick startup. Kelly said the value of the program is that it encourages speculative investment by making at least some assurances on the front end for those taking a risk.

“I think the idea and the value comes from having a certainty of process and some certainty of timeline,” Kelly said. “And then some sort of parameters, at least a base level, of what the incentives will be.”

For VenturePark, projects must include a new building of at least 75,000 square feet. For East Hills Business Park, an expansion of an existing building or a new building of at least 25,000 square feet is eligible. The program provides Industrial Revenue Bonds with a 10-year, 50 percent property tax abatement and an additional 20 percent abatement if the project meets certain energy-efficiency guidelines. The city will provide the land at no cost, and waive application and bond origination fees.

Stoddard also told commissioners Olathe, Lenexa and Shawnee offer incentives for speculative industrial development, and that the program would make Lawrence more competitive in the region. In addition, she noted that Lawrence has very little available industrial space, according to annual real estate data.

However, during public comment, some residents expressed concern that the new program backtracked on the economic incentives policy passed by the commission in December, which requires in-depth analysis and review. The expedited approval process for the program won’t be subject to that policy and process, and will only require approval from the City Commission.

In response, Commissioner Matthew Herbert said this incentives program is completely different because it covers only industrially zoned properties in the city-owned business parks, and developers would be taking over payment of special assessments.

“I think that’s such an important clarification that we get on the record, because incentives get to be such a hot topic,” Herbert said.

Though it is possible the program could expand. Commissioners Mike Amyx and Lisa Larsen were concerned about the idea of fairness, and Amyx proposed investigating whether the program could be open to privately owned industrial property. As part of the motion, the commission directed staff to look into that option.

Once the two-year period for the Catalyst Program is up, commissioners can evaluate it and vote whether to extend it.

Contact city reporter Rochelle Valverde

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Comments

Richard Heckler

"investigating whether the program could be open to privately owned industrial property."

It seems to me the private land owners should set up their own incentives rather than hitting on the taxpayers.

8 months, 1 week ago

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Matthew Herbert

Richard,
Because of the nature of the agreement on Lawrence Venture Park, if the industrial park remains vacant, taxpayers will be on the hook for special assessments to the tune of $9.6 million

By recruiting industrial spec development, we are able to pass special assessment costs onto the developer and therefore off of your (and my) back.

Your statement is valid with regards to normal, private development where the city is not the owner of the land and therefore is never under threat of financial risk. This situation is completely different however as the city currently owns the land. If no development occurs at Venture Park, you will very literally be made to pay for it.

8 months, 1 week ago

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David Holroyd

Well, I guess the so called leaders figured out they best include East Hills because certain employers there would not want to expand into Venture Park. Now then, maybe Mr. Herbert being on the commission could garner an interview with the Journal World and enlighte the public on who were the original investors besides the county taxpayers at East Hills. It was in fact a public / private partnership.. Thus far, the public has not beneffited from any residential property tax decreases . the park has provided jobs, but the reality is that those employed are not all coming from Douglas County which has a very limited base to employ from.

Is it true that Amaar was looking at something in Johnson County for expansion? Amaar did in fact have some company officials in Kansas City a week or so ago. And yes they did and they have! Company honchos at the head have spouses and they want to live NOT in Lawrence but a more cosmopoliton, cultured area. Lawrence is not the small town that the 40 somethings want to be in. The wives do not want it. Lawrence can't even get their own city employees to live in the town and the school district as well.
Even Gene Meyer formerly of LMH lived at Cedar Creek. What does that tell you. He could have afforded anyplace in the city of Lawrence. The wife was the problem.

The problem with the Venture park 75,000 feet is that it is likely that after the spec building is built the city leaders and chamber retirement officials will waffle and allow the 75,000 sq feet to be chopped up into smaller spaces.

Is that a possibility?

What's the difference between being on the hook for$9.6 million assessments or spending $3 million on a building for recycling. Deduct 3 million from 9.6 and there is a diffference of 6 million. The way the city throw the money around the 9.6 is a pittance in the long run.

Why is it that the school district now wanting 87 million bond issue do not get it that the taxes are high in Lawrence and thus the need for all the freebies to attract employers to build buildings.

Lower the mill rate and compete that way.

So to recap,,,,DCDI needs to have a full story about the "club" and the beneficiaries from 1988 until now. Who has reaped the financial rewards? Not the publc part of the partnership.

8 months, 1 week ago

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