Who does the best job of directing local economic development?

Who does the best job of directing local economic development?

Last week Greg Williams, the new Chief Executive Officer of the Lawrence Chamber of Commerce, spoke to the members of the Lawrence Association of Neighborhoods.  In his remarks, Williams stated that the “best” local economic development agencies are run by Chambers of Commerce, not by local government.

This seems like an empirical question which should be informed by looking at the published research on local economic development.  What does that published research have to say on this question?

Wolman and Spitzley find that local economic development decisions are made through a political process masquerading as a rational process.  A political “growth machine” exists that is a coalition of interests who benefit from real estate development, rather than real economic growth.  Led by business interests such as real estate developers and the Chamber of Commerce, this growth machine maneuvers to take control of the economic development process (Harold Wolman and David Spitzley. 1996. The Politics of Local Economic Development, Economic Development Quarterly 10(3):115-150.)

Rubin finds that when economic development is directed by a Chamber of Commerce, the deals are structured to benefit the businesses, often at the expense of the taxpayers.  When economic development is directed by a local government, the deals are structured to benefit the community as a whole.  When local government turns over the administration of local economic development to a special interest group, such as the Chamber, that special interest group generates a systematic bias in favor of the Chamber’s constituents (Herbert J. Rubin, 1988, Shoot Anything That Flies; Claim Anything that Falls: Conversations with Economic Development Practitioners, Economic Development Quarterly 2(3):236-251)

McGuire finds that economic development is a collaborative process, but the form of the collaboration is important.  With the Chamber is in the lead role, it will direct the process to the benefit of its constituents, its member businesses (Michael McGuire. 2000. Collaborative Policy Making and Administration: The Operational Demands of Local Economic Development. Economic Development Quarterly 14(3): 278-291.)

Opening up the process can be beneficial.  KU’s own Elaine Sharp finds that “Public officials in tax-stressed communities who are wary of the potential consequences of popular mobilization may be relieved to find that heightened citizen involvement can actually enhance the climate for economic development policies . . . “(Elaine B. Sharp  and David B. Elkins. 1991. The Politics of Economic Development Policy. Economic Development Quarterly, 5, 126-139.)

 

No one can serve two masters, and the Chamber of Commerce is no exception.  It works for its membership as a special interest group advocating for businesses. 

If the City of Lawrence wants to pursue economic development policies that are beneficial to the community as a whole, it needs to both depoliticize and professionalize the process.

The Chamber of Commerce receives over $400,000 in taxpayer dollars each year from the City and the County.  The record of accomplishments for this large annual taxpayer subsidy is very poor.  The Chamber led the City into 17 tax abatements of which only 35 percent met expectations, the remainder failed outright or did not produce the jobs, wages or investment promised.  The Chamber led the City into violations of the Kansas Open Meetings Act in attempt to broker a deal without the taxpayers’ knowledge.  This caused the members of the City Commission to be censured. The Chamber consistently supported more and more real estate development on the false belief that supply creates demand.  They were wrong, and now the City is stuck with a large inventory of vacant housing, retail stores, and offices.

 

The City and the County should take this money and spend it on professional planners who report to the elected officials.  These planners would bring professional skills to their work and would serve the community as a whole.   The Chamber should be at the table when economic development policy is designed and implemented, but it should not be paid large sums of public money to be at the table.  The Chamber can sit at the table as an equal, interested and unsubsidized partner. 

Who does the best job of directing local economic development?  Professional planners working for the community do the best job, not the Chamber of Commerce working for its business constituency.

 

 

 

Do the pros outweigh the cons for the proposed sports complex?

Do the pros outweigh the cons for the proposed sports complex?

The City is considering a sports complex at 6^th Street and the South Lawrence Trafficway.  The City contracted with Conventions Sports & Leisure (CS&L) for a report to project the demand for such a facility.

What are the Pros?

1.      The project will attract some level of tourist spending which will generate jobs.

2.      The project will leverage a land donation and financial contributions from Assist Foundation and Fritzel family.

 

3.      The project may serve the recreation needs of Northwest Lawrence.

What are the Cons?

1.      The project is costly.

The City’s indoor component of the project is estimated to cost $25 million for a 181,000 square foot fieldhouse.  This indicates a construction cost of $138 per square foot, which is higher than three of the four comparable facilities listed in the CS&L report.  This suggests that the project costs are inflated and should be examined closely.

The project causes the City to jump to the west of the South Lawrence Trafficway, creating a need for very expensive infrastructure.  This will cost many millions of dollars for services that are not now available at the site.  The infrastructure costs are too high to be justified by a highly risky sports complex.

2.      The project is very large.

The fieldhouse is very large at 181,000 square feet, larger than 5 of the 6 comparable facilities listed in the CS&L report, many serving larger metropolitan areas.  Given the size of the Kansas City metropolitan area, the scale of the proposed fieldhouse appears to be too large for the market served.

3.      The projected demand for the sports complex is much higher than the demand experienced by comparable facilities.

CS&L report projects the Lawrence fieldhouse to attract 294,000 attendees annually to 34 tournaments.  This is greater than the annual draw at the Fieldhouse USA in Frisco, Texas.  It seems highly unlikely that the Lawrence Fieldhouse, serving a smaller and less rich metropolitan area will outperform the Frisco facility serving a much larger and richer metropolitan area.  Given the size of the Kansas City area and the performance of other facilities, the projected demand for use of the Lawrence fieldhouse seems highly exaggerated.

4.      The fieldhouse will not serve the recreation needs to the residents of Northwest Lawrence.

If the demand for the fieldhouse is as great as the CS&L report indicates, it appears that use of the fieldhouse will be restricted for 30 of 52 weekends each year.  This high incidence of restricted use will lead to a disgruntled public who will assuredly call for facilities that are open to the public without such an interrupted schedule.  The City should rethink whether the proposed sports complex is a business venture or is a facility to serve the recreation needs of the residents of Northwest Lawrence.

5.      Competition in the Kansas City region is not fully reflected in the demand calculations.

The CS&L report lists possible tournament sponsors.  This list includes sponsors who are owners of facilities in the Kansas City area.  It seems highly unlikely that these sponsors, such as the Heart of American Volleyball, would send their own tournaments to a competing facility in Lawrence.  The list of potential sponsors who would support tournaments appears to be inflated.

6.      Ownership of the facility assumes that Lawrence taxpayers must absorb all risk.

One-half of the comparable facilities listed in the CS&L report are privately owned.  If this project could attract the level of demand projected for it, private investors should materialize to make this a viable project without large levels of public subsidy.  It appears that the planning for this project has not properly explored leveraging investment from private investors to reduce the risk absorbed by the taxpayers.

As structured, the taxpayers of Lawrence must absorb all of the risk for any operating losses and construction cost overruns on this project.  The KU Athletic Association is absorbing none of these risks.  Private investors are absorbing none of these risks.  It appears that the taxpayers are being asked to absorb too much risk in this project which should be shared by the KU Athletic Association and private investors.

7.      Partnering with the KU Athletic Association is questionable.

The KU Athletic Association is projected to build an outdoor facility at the sports complex, yet it will pay nothing for the use of the land, will contribute nothing toward the development of the infrastructure to service the site, will contribute nothing to the operation of the complex as a whole, and has made no promise that its facilities will be open to the public.

The KU Athletic Association is notorious for not allowing either the public or even KU students to make use of Athletic Association facilities.

Recently, the KU Athletic Association saw four employees convicted of federal crimes involving stolen tickets.  This first scandal led to a further scandal with two local police officers losing their jobs over fixing speeding tickets in exchange for basketball tickets.

Given this history of corruption and rebuffing the needs of the community, the KU Athletic Association seems like an undesirable partner for an investment of this scale.  The Athletic Association should be making a very large contribution to this complex, such as covering operating losses, and should be attempting to rebuild public trust by assuring the public that it will have access to the outdoor facilities.

8.      The land donation has prohibitive strings attached.

The City’s plan promised the residents of the land to the north of the proposed site a buffer from non-residential uses.  The land donation is only enough space to build the facilities without leaving open space as a buffer.  In effect, the land donation forces the City to renege on its only plan and not provide the needed buffer.

The proposed plan seems to provide only 800 parking spaces.  This seems prohibitively small if the parking is to support a 10,000 seat stadium.

The City should reconsider whether this land donation is adequate to produce a good project which provides adequate space for the facilities and buffers these non-residential uses from adjoining residential properties.

9.      The commercial development cannot be supported by the sports complex.

The CS&L report projects demand for hotel space at only 9,500 stays.  At 60 percent occupancy and 365 nights per year, 9,500 stays is enough to support only 43 hotel rooms, far less than the “upwards of 300 rooms” mentioned in the report.  The City is investing millions of taxpayers dollars in two hotel projects, one downtown and on closed to the KU campus.  It is unwise in the extreme to threaten these investments by promoting more hotel space that cannot be supported by the sports complex and will only compete against hotels in which the local taxpayers are invested.

The CS&L report projects spending at only $12.50 per attendee who visits the project for the day and $80 per attendee who stays for the night.  The report projects that only 1 in 5 attendees will stay for the night.  Even if the 294,000 visitors figure could be met, this level of spending is only enough to support about 25,000 square feet of retail, (((.2*294000*80)+(.8*294000*12.5))/300=25,480).  This level of spending would support, at most, a few fast food restaurants.  If the project performs closer to the performance found in the comparable facilities listed in the CS&L report, these the supportable retail space will be even less.

As is so often the case, developers exaggerate the demand for commercial, especially retail space.  The City only does harm to its existing retail districts by allowing outlying new districts to be built.  The City should rethink the viability of any associated commercial space associated with this project.

10.   An alternative exists.

The City can build a recreation center on land west of Lawrence Free State High School with its baseball and football fields plus its gym and the City’s attached indoor pool.  A recreation center built near these existing facilities could serve the citizens needs and attract some level of tournaments with their ensuing economic benefits.  This alternative site would not require any major new infrastructure; the site already has the necessary services.  The location would develop its own synergy through coordination of events with the facilities at the High School.  The City should carefully examine the relative costs, benefits and risks of this alternative.  It may be a less costly, less risky, and nearly as beneficial an option that can better serve the needs of the residents of Northwest Lawrence.

It appears that the pros for the proposed sports complex do not outweigh the cons.  The City should sharpen its pencils and study the alternatives more closely. 

Where are the studies that are needed before we make such huge investments?

Where are the studies that are needed before we make such huge investments?

The City Commission is rapidly moving ahead with a $12 million subsidy package for the apartment and hotel developments at 9^th and New Hampshire Streets.

Before any city considers making such a large investment, its professional staff should engage in a planning exercise to ensure that this is a good investment.  Lawrence has not done this.

These studies should include:

               Market Analysis

               Cost-Benefit Analysis

               Feasibility Analysis

Market Analysis

The market analysis answers the question, “does Lawrence need these new developments?”  If the city does not need the development, the project will, if built, simply cannibalize demand away from existing properties.  The effects of cannibalization can be minor to catastrophic.  Lawrence invested heavily in the Oread Hotel.  The downtown depends upon the success of the historic Eldridge Hotel.  It is unwise to foster development of another hotel that could hurt these two hotels.  It is foolish in the extreme to subsidize the development of another hotel that could hurt these two hotels.  Similarly with an apartment building, the taxpayers should not be asked to subsidize an apartment building that will cause problems for other existing apartment buildings.

A market analysis should have preceded any consideration of TIF or any other subsidy, but a market analysis was not prepared.  Casual observation suggests that the market is not right for this development, especially with heavy taxpayer subsidy.  Developers are building apartments faster than population growth among renters, thus there seems to be no need for more apartment buildings now.  Hotels seem to be struggling rather than bustling, thus there seems to be no need for more hotel rooms now.

There may be little or no new market for this project; it may only cannibalize existing markets.

Cost-Benefit Analysis

Cost-benefit analysis answers the question, “does the present value of all future costs and benefits exceed the present value of all current costs?”  If the benefits do not substantially exceed costs, then the City should not invest scarce taxpayer dollars in these ventures. 

A cost-benefit analysis should have preceded any consideration of TIF financing or any other subsidy, but a cost-benefit analysis was not prepared,  Again, casual observations suggests that the taxpayers will not get a good return on their investment.  Out of the $12 million in subsidy, the taxpayers will get a $800,000 contribution toward paying down the debt on the existing New Hampshire Street garage plus about $500,000 toward building an art park where the Salvation Army building now stands.  That leaves $10.7 million to be covered.

It takes Herculean assumptions on benefits to cover the remaining $10.7 million in costs.  We cannot look to any taxes on either the apartment or the hotel; they have all been given back to the developers.  Apartment buildings do not create many jobs, but hotels do.  However, if the need for new hotel rooms is small or non-existent, then there will be few or no new jobs in this hotel.  The hotel will simply cannibalize jobs from other hotels just as it will cannibalize customers.

The expected benefits from this project may be less, even substantially less, than the costs.

Feasibility Analysis

Feasibility analysis answers the question, “will the project be financially feasible only with the subsidy?”  It turns out that the City did engage a private consultant to conduct such a study.  Such studies generally conclude: first, that the project is not feasible without the subsidy; and second, the project is feasible with the subsidy.  Ironically, the feasibility analysis said that the project is NOT feasible with or without the subsidy.  This is a clear indication that something is wrong with the numbers that the developer is submitting, and that consideration of any subsidy should stop until more and better information is found.  Our City Commission ignored this message and went ahead with the subsidy.

The City has chosen to invest $12 million taxpayer dollars in project about which it knows little.

Our City Commission is guilty of being overly eager to cut ribbons.  This is not unusual among politicians, but it is scary.  The City Commission voted to give $12 million taxpayer dollars to a project that may have little or no market demand behind it, that may not generate enough benefits to justify this very high public investment, and that may not be financially feasible.

The necessary studies are missing or are being ignored.  The City staff should have shown leadership to the City Commission and the taxpayers by causing these studies to be properly prepared, properly interpreted, and properly acted upon.  City Commissioners are not trained in the intricacies of Tax Increment Financing or benefit-cost analysis or market analysis.  City staff members are appropriately trained.  The taxpayers have a right to expect more from our staff.

Hold on to your wallets; this same system is about to make an even larger decision on a sports complex.

What does the 9th and New Hampshire proposal teach us about out development controls?

What does the 9^th and New Hampshire proposal teach us about our development controls?

Lawrence lacks proper development controls. The absence of proper controls prevents the City from reviewing major projects and allows developers to dictate the pace of growth. This is a mistake.

The problems with the 9^th and New Hampshire proposal are a text book example of failed planning.

Quick history:

The City approved zoning on the 900 block of New Hampshire for the Downtown 2000 project. The Downtown 2000 project failed. It was supposed to pay for one-half of the New Hampshire Street parking garage. When the project failed, the taxpayers had to pick up the tab for the garage.

Despite the failure of the project, the zoning lives on at the site. This permits the developer to proceed with a hotel without normal planning review. If the developer wants to build a 3-story hotel and does not want subsidy, it can be built without planning review. The proposed hotel never went through the Planning Commission and as such, the community at large and the neighborhood in particular was not given the opportunity to weigh in on the strengths and weaknesses of this project.

The only reason that the project is going before the City Commission is because it happens to be located adjacent to historic properties making it subject to review by the Historic Resources Commission (HRC), and the project failed to win HRC approval.

The process going forward:

The City Commission will hear an appeal of the decision of the HRC. The scope of the City Commission’s review is narrow. It is to determine whether or not the owner of the property can develop feasible projects under current zoning that will not harm adjacent historic properties. In this setting, feasibility means that a development will earn enough cash flow to attract investors. Generally, this cash flow has to return about 10 percent annually over a period of 10 years. There is little question that feasible alternatives exist. Three-story projects are feasible if no parking garage is included. Town Peterson demonstrates this in his submission to the City Commission. If a parking garage is added to the development, then a project is probably not feasible without deep subsidy. The report from Springsted finds that subsidy will be needed to make a project feasible if it contains a parking garage.

The City Commission cannot, in good conscience, find that no feasible alternative exists under current zoning. It is clear that a three-story retail/office facility will generate a competitive return on investment.

To the developer, the problem is not the percentage return on investment with a three-story project; it is the dollar amount of profit. The developers can make more money with a larger development that includes five or six stories, a hotel, and a parking garage with that garage paid for by the taxpayers.

How did Lawrence get into this problem?

Lawrence is in this problem because of a lack of proper development controls. Because the zoning did not end with the death of the Downtown 2000 project, the City has lost much of its capacity to control this project.

Some version of the proposal at 9^th and New Hampshire may be a development that the City, the East Lawrence Neighborhood Association, the Historic Resources Commission and the community at large may all support. But we will never know under the current development controls because there is no opportunity to debate the project. There is constrained review of its impact on adjacent historic properties, but the HRC review is not supposed to go beyond this narrow issue. Assuming that the developers will seek deep subsidies on the property, there will be some debate over whether or not the project should be given costly subsidies, but again, the debate will be unfairly narrowed to this topic.

The process as being played out now will not permit the community to weigh in on the height of this project, the timing of this project nor the impact of the project on our downtown and other hotel projects.

What should be done about this problem?

Lawrence needs a set of development controls that permit the City to dictate not only the height, bulk and use of a project but also the timing of when these projects are built.

Zoning dictates the height bulk and use of a project. Clearly our zoning does not do this well. The current proposal seeks to go higher than the rules permit, but this decision is not reviewed by the Planning Commission or the City Commission. The development controls of the city should mandate that any significant project must go through review by the Planning Commission with a public hearing procedure.

Lawrence needs a set of development controls that allow it to set the pace of growth. In this, the City is woefully lacking. The City’s development controls assume that once zoned, the private market knows best how to time development. We are now in the fifth year of a real estate driven recession because of the error of this assumption. The private market is prone to overbuilding as developers seek to cannibalize business from each other, a practice the leaves cities pock marked with failed shopping centers and neighborhoods with too much vacancy and disinvestment.

Lawrence is paying the price for letting the development community dictate the pace of growth.

Lawrence’s retail space grew faster than retail spending. From 1997 to 2007, retail spending grew by 26% but new space added 36% to the stock of space, producing over 500,000 square feet of surplus space. The surplus resulted in chronic vacancies downtown, along 23^rd Street and in various neighborhood centers. The market has consumed about one-half of that surplus, but with the current economic downturn, it will take a long time to work through the remainder of the surplus. Yet the City continues to approve more retail space as if the problem does not exist.

Lawrence’s housing stock expanded faster than the growth in its population. From 2000 to 2007, the counts of households grew by 4,500, but developers built 5,700 housing units, creating a surplus of 1,200 units. The surplus is equivalent to a dozen large subdivisions, enough to cover the city’s needs for more than 6 years, devastating the housing industry.

Now the City is confronting a similar problem with its hotels. The taxpayers invested $11 million in the Oread Hotel. The City has an interest in the Eldridge Hotel surviving because it uniquely defines our historic downtown. Recently the City approved zoning for a hotel as part of the North Mass Development. The City is rezoning property at 6^th Street and the South Lawrence Trafficway for a sports complex with a retail shopping center and a hotel. As if all of this is not enough, the developers of 9^th and New Hampshire propose yet another hotel.

The City lacks development controls that place it in a position to: 1.) Determine that pace at which it can absorb new space, and 2.) Regulate the pace of new construction so as to prevent overbuilding.

Right now, no one in the planning process seems to know how many additional hotel rooms the City can absorb without harm to its existing hotels and its existing investments. Even if this was known, the City does not have the power to control the pace at which space is added. Once zoned, the developers control the pace of development, even if that pace is harmful to City investments and City interests.

What should the development controls include?

Market Analysis: The City’s development controls should provide for the City to study its own markets and determine how much space it can absorb each year, whether the space is composed of housing units, retail stores, offices or hotel rooms.

Growth Management: The City’s development controls should provide mechanisms for the City to set the pace of development so as to keep the pace of growth within the capacity of the City’s market to absorb that space. If we learn nothing else from the crash of 2008, we should learn that the real estate industry does not pace itself well. Rather than allowing developers to create problems, we should force developers to compete against each other so that only the very best projects go forward.

Benefit-Cost Analysis: The City’s development controls should examine the benefits and costs of each significant development. For too long, we have assumed that each project, if properly zoned, is good for the community. This assumption is wrong. Many new projects serve only to pull demand away from other, usually older, neighborhoods and shopping districts creating depressed values and disinvestment. The City needs to better understand the implications of each new development upon existing properties. Often the benefits of the new development do not justify the costs to the older neighborhoods.

Feasibility and Efficiency Analysis: The City’s development controls should examine project feasibility where subsidies are requested. The City does this, but too often, the City takes the approach that if the project is not feasible without subsidy, then the subsidy should be granted. Full feasibility analysis should examine whether other, less costly, alternatives will serve the City’s needs adequately. We should not give the presumption of validity to the developer’s proposals. Often an alternative proposal, including doing nothing, will serve the community’s interests better. Searching for this better alternative needs to become a part of the development process.

Is the revised Joint Economic Development Council all that it could be?

I read with interest the revisions to the proposed Joint Economic Development Council that is before the City Commission.  The City Commission must ask itself, is this the best path to effective local economic development planning?

The answer is no.

Representation

The proposed Council now includes four community representatives to counter the five Chamber of Commerce representatives.  This falls short of equal representation which would enhance the standing of this body.  As long as the Chamber of Commerce retains too much control of the Council, its advice will be viewed with suspicion by the community at large. 

It is worth noting that the community representatives do not necessarily come from any of the many community and neighborhood organizations who could provide valuable input.  Thus, there is nothing to prevent a pro-Chamber City Commission or County Commission from appointing additional pro-Chamber individuals to these positions.

If this body is to gain the respect of the community and is to provide valuable advice, it is important that it be seen as truly representative of the community at large.  As revised, the Council falls short.

Professionalism

Local economic development planning is complex and requires professional expertise.  Virtually every city in the nation is in the game, and playing the game successfully requires an in-depth knowledge of what works, why it works, and what it takes to make it work here.  Too many cities, implement economic development strategies by following advocacy and ideology rather than following research based professional guidance.

The City and the County continue to give over $400,000 per year to the Chamber of Commerce and get too little in return.  The Chamber is a business advocacy organization.  Advocacy has its place, but it is not the way to succeed in local economic development planning.  The record of the City in its failed economic development programs is testament to the inherent flaws in following advocacy.

Professionalism is the path to successful local economic development planning.  At the moment, the City is staffed by a single profession economic development coordinator.  Creating this position was a step in the right direction, but it was only a good first step.  More professional planners are needed.

Currently, the community is confronting many issues that require the input of these planners.  These questions include:  Can the city absorb all of the additional hotel rooms that are proposed downtown?  Can the city absorb the additional retail space proposed as part of the sports complex?  Can the city attract enough events to make such a sports complex viable?  Will there be enough demand for downtown vendors that the city can use of tax increment financing successfully to support other services such as the Lawrence Arts Center? Are the City’s investments in industrial and biotech performing well?

Additional professional local economic development planners could provide the guidance and instruction that an advisory board, such as the Joint Economic Development Council, needs.  Just being a business or community representative does not mean that the representative is knowledgeable on matters of selecting, designing and implementing effective economic development strategies.  Advocates paid by the Chamber of Commerce cannot provide the full truth; they must adhere to the ideology of their employer.  Professional planners who report to the City and County Commissions can provide this evidence driven expertise.

Recommendation

Further refine the composition of the Joint Economic Development Council to ensure that the community representatives truly represent the community at large and are, at least, equal in number to the representatives from the Chamber of Commerce.

Bring economic development planning inside City Hall and inside the County Court House.  Reduce the role of the Chamber of Commerce in economic development planning and increase the role of professional planners who bring expertise to the process and who report only to the elected commissioners.

How do we select a sports complex in Northwest Lawrence?

Deciding on a Sports Complex in Northwest Lawrence

The Lawrence Parks and Recreation Advisory Board held a public session to exchange ideas about the proposed sports complex.  Here a a couple of recommendations on how to proceed.

Compared to what?

Too much of the discussion last evening cast the decision the City Commission will make on the sports complex as a choice between the proposed 50 acre sports complex at the SLT versus doing nothing.  This is an overly stark and unfair characterization of the choices.  What the taxpayers and the City Commission need is a better representation of the choices.

A more correct representation of the choices would be:

1.        A 50 acre, 8 basketball/volleyball court complex in partnership with the KU Athletic Association with a soccer field and a track field.  To adopt this option means to give the developer permission to build a retail complex of about 200,000 square feet in exchange for a land donation of 50 acres, much of which was intended to be undeveloped as a buffer for property owners to the north.  This alternative requires a large investment in infrastructure, but it has the potential to attract tournaments and events to Lawrence.

2.       A 35 acre, 4 (or maybe more) basketball/volleyball court complex built to the west of Free State High School permitting the complex to be used in conjunction with the facilities at the school.  The zoning and preliminary plans for this complex are available.  This alternative does not involve increasing the retail stock, which is now overbuilt.  This alternative does not require as much new infrastructure as the alternative west of the SLT. This Overland Drive alternative involves a partnership between the City and USD 497 rather than a partnership with KUAA.  This alternative also has the potential to attract tournaments and events to Lawrence.

Recommendation:  As you move forward with analysis of a sport complex in Northwest Lawrence, please provide a comparison between these two alternatives so that the decision makers are making informed choice over two options.

Where is the Market Analysis?

I have yet to hear of any professional market analysis conducted to guide the decision makers. 

The presentation on the Frisco, Texas complex was interesting, but potentially misleading.  Frisco is bigger, richer city that sits within a much, much larger metroplex.  We are Lawrence; we need to guide the taxpayers into an investment that can be sustained by a city of our size and ability to pull in outsiders.  Knowing the scale of sustainable investment takes skill.  This skill has in short supply in Lawrence, and we are paying the price.  The Riverfront Mall was a failure, and the taxpayers continue to pay the price of the failed project and its parking garage.  The Downtown 2000 project was a failure, and the taxpayers continue to pay the price of the failed project and its parking garage.  These mistakes were made because the City moved forward with projects that were inadequately researched.

I had occasion to be in Gainesville, Florida last week.  Takeaway the alligators and the Spanish moss hanging from the trees, and Gainesville is much like Lawrence.  I picked up the local newspaper and read a front page investigative report on the disappointing performance of the City’s investment in a new sports complex.  The project is relatively new and construction delays occurred, but the sports complex had not attracted the tournaments projected for it.  This complex may recover and perform well in the future, but the experience of Gainesville is instructive.  It teaches us to be realistic about our capacity to attract tournaments.

It is fine to dream big, but when we invest, we should make sure that we invest wisely.  If we invest too big, hoping to realize our dreams, we may lose big.  If we invest based upon realistic expectations, we may have a better chance of realizing sustainable return on our investment.  We do not want an investigative article in a future issue of the Lawrence Journal World to report on the disappointing performance of the new sports complex to attract visitors, straddling the taxpayers with another poorly performing investment.

Recommendation:  Before we go much further, Lawrence needs to engage some expertise that will guide the city in terms of projecting a realistic level of demand for tournaments and its associated hotel, restaurant and retail spending so as to guide the choice of the scale of a sports complex.