tag:blogger.com,1999:blog-343119312024-03-13T23:46:57.829-07:00Lawrence Smart GrowthThis blog displays various papers prepared by Kirk McClure on the growth and development of Lawrence, Kansas.Kirk McClurehttp://www.blogger.com/profile/05289172523302036414noreply@blogger.comBlogger40125tag:blogger.com,1999:blog-34311931.post-66220169688512265752014-12-11T20:15:00.000-08:002014-12-11T20:15:13.922-08:00Do Lawrence and Douglas County need growth management?
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<b style="mso-bidi-font-weight: normal;"><span style="font-family: Calibri;">Do Lawrence and
Douglas County need growth management?</span></b></div>
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<span style="font-family: Calibri;"> </span></div>
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<span style="font-family: Calibri;">Growth management is one approach to planning.<span style="mso-spacerun: yes;"> </span>This approach recognizes that the development
industry tends to overbuild.<span style="mso-spacerun: yes;"> </span>Growth
management overcomes this tendency by restricting the growth in the supply of
housing or retail space or any other type of development to just the amount
that satisfies the growth in demand.</span></div>
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<span style="font-family: Calibri;">Table 1 looks at the changes in households and housing units
in Douglas County and in Lawrence from 2000 to 2013.<span style="mso-spacerun: yes;"> </span>It is clear that the area experienced
significant overbuilding of housing during this period.</span></div>
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<span style="font-family: Calibri;"> </span></div>
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<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse; mso-padding-alt: 0in 5.4pt 0in 5.4pt; mso-yfti-tbllook: 1184; width: 391px;">
<tbody>
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<td colspan="3" nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 222.05pt;" valign="bottom" width="296">
<div style="line-height: normal; margin: 0in 0in 0pt 0.55in;">
<b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">Table 1: Growth in Households and Housing Units</span></span></b></div>
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<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 135.15pt;" valign="bottom" width="180"></td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 43.45pt;" valign="bottom" width="58"></td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 43.45pt;" valign="bottom" width="58"></td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 71pt;" valign="bottom" width="95"></td>
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<tr style="height: 15pt; mso-yfti-irow: 2;">
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 135.15pt;" valign="bottom" width="180"></td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 43.45pt;" valign="bottom" width="58">
<div align="right" style="line-height: normal; margin: 0in 0in 0pt 0.55in; text-align: right;">
<i><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">2013</span></span></i></div>
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<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 43.45pt;" valign="bottom" width="58">
<div align="right" style="line-height: normal; margin: 0in 0in 0pt 0.55in; text-align: right;">
<i><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">2000</span></span></i></div>
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<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 71pt;" valign="bottom" width="95">
<div align="right" style="line-height: normal; margin: 0in 0in 0pt 0.55in; text-align: right;">
<i><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">Change</span></span></i></div>
</td>
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<tr style="height: 15pt; mso-yfti-irow: 3;">
<td colspan="2" nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 178.6pt;" valign="bottom" width="238">
<div style="line-height: normal; margin: 0in 0in 0pt 0.55in;">
<i><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">Douglas County, Kansas </span></span></i></div>
</td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 43.45pt;" valign="bottom" width="58"></td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 71pt;" valign="bottom" width="95"></td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 4;">
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 135.15pt;" valign="bottom" width="180"></td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 43.45pt;" valign="bottom" width="58"></td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 43.45pt;" valign="bottom" width="58"></td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 71pt;" valign="bottom" width="95"></td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 5;">
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 135.15pt;" valign="bottom" width="180">
<div style="line-height: normal; margin: 0in 0in 0pt 0.55in;">
<span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">Households</span></span></div>
</td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 43.45pt;" valign="bottom" width="58">
<div align="right" style="line-height: normal; margin: 0in 0in 0pt 0.55in; text-align: right;">
<span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">43,398</span></span></div>
</td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 43.45pt;" valign="bottom" width="58">
<div align="right" style="line-height: normal; margin: 0in 0in 0pt 0.55in; text-align: right;">
<span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">38,486</span></span></div>
</td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 71pt;" valign="bottom" width="95">
<div align="right" style="line-height: normal; margin: 0in 0in 0pt 0.55in; text-align: right;">
<span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">4,912</span></span></div>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 6;">
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 135.15pt;" valign="bottom" width="180">
<div style="line-height: normal; margin: 0in 0in 0pt 0.55in;">
<span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">Housing Units</span></span></div>
</td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 43.45pt;" valign="bottom" width="58">
<div align="right" style="line-height: normal; margin: 0in 0in 0pt 0.55in; text-align: right;">
<span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">47,060</span></span></div>
</td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 43.45pt;" valign="bottom" width="58">
<div align="right" style="line-height: normal; margin: 0in 0in 0pt 0.55in; text-align: right;">
<span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">40,250</span></span></div>
</td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 71pt;" valign="bottom" width="95">
<div align="right" style="line-height: normal; margin: 0in 0in 0pt 0.55in; text-align: right;">
<span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">6,810</span></span></div>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 7;">
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 135.15pt;" valign="bottom" width="180"></td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 43.45pt;" valign="bottom" width="58"></td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 43.45pt;" valign="bottom" width="58"></td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 71pt;" valign="bottom" width="95"></td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 8;">
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 135.15pt;" valign="bottom" width="180">
<div style="line-height: normal; margin: 0in 0in 0pt 0.55in;">
<span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">Surplus Units</span></span></div>
</td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 43.45pt;" valign="bottom" width="58"></td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 43.45pt;" valign="bottom" width="58"></td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 71pt;" valign="bottom" width="95">
<div align="right" style="line-height: normal; margin: 0in 0in 0pt 0.55in; text-align: right;">
<span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">1,898</span></span></div>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 9;">
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 135.15pt;" valign="bottom" width="180">
<div style="line-height: normal; margin: 0in 0in 0pt 0.55in;">
<span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">Surplus Units per year</span></span></div>
</td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 43.45pt;" valign="bottom" width="58"></td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 43.45pt;" valign="bottom" width="58"></td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 71pt;" valign="bottom" width="95">
<div align="right" style="line-height: normal; margin: 0in 0in 0pt 0.55in; text-align: right;">
<span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">146</span></span></div>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 10;">
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 135.15pt;" valign="bottom" width="180"></td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 43.45pt;" valign="bottom" width="58"></td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 43.45pt;" valign="bottom" width="58"></td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 71pt;" valign="bottom" width="95"></td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 11;">
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 135.15pt;" valign="bottom" width="180"></td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 43.45pt;" valign="bottom" width="58"></td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 43.45pt;" valign="bottom" width="58"></td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 71pt;" valign="bottom" width="95"></td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 12;">
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 135.15pt;" valign="bottom" width="180">
<div style="line-height: normal; margin: 0in 0in 0pt 0.55in;">
<i><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">Lawrence, Kansas</span></span></i></div>
</td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 43.45pt;" valign="bottom" width="58"></td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 43.45pt;" valign="bottom" width="58"></td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 71pt;" valign="bottom" width="95"></td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 13;">
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 135.15pt;" valign="bottom" width="180"></td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 43.45pt;" valign="bottom" width="58"></td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 43.45pt;" valign="bottom" width="58"></td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 71pt;" valign="bottom" width="95"></td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 14;">
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 135.15pt;" valign="bottom" width="180">
<div style="line-height: normal; margin: 0in 0in 0pt 0.55in;">
<span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">Households</span></span></div>
</td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 43.45pt;" valign="bottom" width="58">
<div align="right" style="line-height: normal; margin: 0in 0in 0pt 0.55in; text-align: right;">
<span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">34,426</span></span></div>
</td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 43.45pt;" valign="bottom" width="58">
<div align="right" style="line-height: normal; margin: 0in 0in 0pt 0.55in; text-align: right;">
<span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">31,388</span></span></div>
</td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 71pt;" valign="bottom" width="95">
<div align="right" style="line-height: normal; margin: 0in 0in 0pt 0.55in; text-align: right;">
<span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">3,038</span></span></div>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 15;">
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 135.15pt;" valign="bottom" width="180">
<div style="line-height: normal; margin: 0in 0in 0pt 0.55in;">
<span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">Housing Units</span></span></div>
</td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 43.45pt;" valign="bottom" width="58">
<div align="right" style="line-height: normal; margin: 0in 0in 0pt 0.55in; text-align: right;">
<span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">37324</span></span></div>
</td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 43.45pt;" valign="bottom" width="58">
<div align="right" style="line-height: normal; margin: 0in 0in 0pt 0.55in; text-align: right;">
<span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">32792</span></span></div>
</td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 71pt;" valign="bottom" width="95">
<div align="right" style="line-height: normal; margin: 0in 0in 0pt 0.55in; text-align: right;">
<span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">4,532</span></span></div>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 16;">
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 135.15pt;" valign="bottom" width="180"></td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 43.45pt;" valign="bottom" width="58"></td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 43.45pt;" valign="bottom" width="58"></td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 71pt;" valign="bottom" width="95"></td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 17;">
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 135.15pt;" valign="bottom" width="180">
<div style="line-height: normal; margin: 0in 0in 0pt 0.55in;">
<span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">Surplus Units</span></span></div>
</td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 43.45pt;" valign="bottom" width="58"></td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 43.45pt;" valign="bottom" width="58"></td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 71pt;" valign="bottom" width="95">
<div align="right" style="line-height: normal; margin: 0in 0in 0pt 0.55in; text-align: right;">
<span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">1,494</span></span></div>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 18;">
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 135.15pt;" valign="bottom" width="180">
<div style="line-height: normal; margin: 0in 0in 0pt 0.55in;">
<span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">Surplus Units per year</span></span></div>
</td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 43.45pt;" valign="bottom" width="58"></td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 43.45pt;" valign="bottom" width="58"></td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 71pt;" valign="bottom" width="95">
<div align="right" style="line-height: normal; margin: 0in 0in 0pt 0.55in; text-align: right;">
<span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">115</span></span></div>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 19;">
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 135.15pt;" valign="bottom" width="180"></td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 43.45pt;" valign="bottom" width="58"></td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 43.45pt;" valign="bottom" width="58"></td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 71pt;" valign="bottom" width="95"></td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 20;">
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 135.15pt;" valign="bottom" width="180"></td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 43.45pt;" valign="bottom" width="58"></td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 43.45pt;" valign="bottom" width="58"></td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 71pt;" valign="bottom" width="95"></td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 21; mso-yfti-lastrow: yes;">
<td colspan="2" nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 178.6pt;" valign="bottom" width="238">
<div style="line-height: normal; margin: 0in 0in 0pt 0.55in;">
<span style="color: black; font-size: 8pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">Source: U.S. Bureau of the Census</span></span></div>
</td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 43.45pt;" valign="bottom" width="58"></td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 71pt;" valign="bottom" width="95"></td>
</tr>
</tbody></table>
<br />
<div style="margin: 0in 0in 8pt;">
<span style="font-family: Calibri;"> </span></div>
<br />
<div style="margin: 0in 0in 8pt;">
<span style="font-family: Calibri;">From 2000 to 2013, Douglas County grew by 4,912 households,
but it allowed developers to build 6,810 homes.<span style="mso-spacerun: yes;">
</span>This generated a surplus of 1,898 homes over the period or 146 surplus homes
per year.</span></div>
<br />
<div style="margin: 0in 0in 8pt;">
<span style="font-family: Calibri;">From 2000 to 2013, Lawrence grew by 3,038 households, but it
allowed developers to build 4,532 homes.<span style="mso-spacerun: yes;">
</span>This generated a surplus of 1,494 homes over the period or 115 surplus
homes per year.</span></div>
<br />
<div style="margin: 0in 0in 8pt;">
<span style="font-family: Calibri;"> </span></div>
<br />
<div style="margin: 0in 0in 8pt;">
<i style="mso-bidi-font-style: normal;"><span style="font-family: Calibri;">Planning Implications</span></i></div>
<br />
<div style="margin: 0in 0in 8pt;">
<span style="font-family: Calibri;">Lawrence and Douglas County have seen a long-term process of
overbuilding by developers.<span style="mso-spacerun: yes;"> </span>This long
history of overbuilding is compelling evidence that the development industry
does not police itself well, nor does the current approach to planning which
simply zones land and assumes that the development industry will pace itself so
as to match the expansion and contraction of demand.</span></div>
<br />
<div style="margin: 0in 0in 8pt;">
<span style="font-family: Calibri;">This overbuilding harms the community by causing
disinvestment in older neighborhoods and sprawl at the perimeter.<span style="mso-spacerun: yes;"> </span></span></div>
<br />
<div style="margin: 0in 0in 8pt;">
<span style="font-family: Calibri;">Map 1 examines the spatial distribution of the changes in
the counts of households in census tracts from 2000 to 2013.<span style="mso-spacerun: yes;"> </span>It is readily apparent that the overbuilding
is not evenly spread across Lawrence. Rather, the overbuilding is most intense
in the western parts of the city and in the Prairie Park area in the southeast.<span style="mso-spacerun: yes;"> </span>This has not left the other neighborhoods
unharmed.<span style="mso-spacerun: yes;"> </span>The older neighborhoods in the
central part of the city have lost population as the surplus stock built at the
perimeter draws the population away from older neighborhoods causing them to
lose population and investment.</span></div>
<br />
<div style="margin: 0in 0in 8pt;">
<span style="font-family: Calibri;"> </span></div>
<br />
<div style="margin: 0in 0in 8pt; text-indent: 0.5in;">
<b style="mso-bidi-font-weight: normal;"><span style="font-family: Calibri;">Map 1:<span style="mso-spacerun: yes;"> </span>Gain or Loss in
Households in Census Tracts 2000 to 2013</span></b></div>
<br />
<div style="margin: 0in 0in 8pt;">
<span style="height: 504px; margin: 1px auto auto 51px; mso-ignore: vglayout; position: absolute; width: 449px; z-index: -1895825408;"><img height="504" 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" 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<span style="font-family: Calibri;">Planning in a community like Lawrence should seek to protect
and even enhance the condition of older neighborhoods.<span style="mso-spacerun: yes;"> </span>Continuation of the overbuilding will only
continue to exacerbate the population losses and value losses in the older
neighborhoods.<span style="mso-spacerun: yes;"> </span>Thus, the concern for the
older neighborhoods is not to increase density in lieu of sprawl at the perimeter
of the city.<span style="mso-spacerun: yes;"> </span>Rather, the concern is to
manage the growth of the community so as to replenish the population losses in
the older neighborhoods.<span style="mso-spacerun: yes;"> </span>If some share
of the growth can be attracted back to the older neighborhoods it can help to
restore those neighborhoods and stimulate reinvestment in them.</span></div>
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<i style="mso-bidi-font-style: normal;"><span style="font-family: Calibri;">Appropriate Planning
Response</span></i></div>
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<span style="font-family: Calibri;">Growth management has the potential to bring balance to the
development process by keeping the growth of supply in balance with the growth
in demand.</span></div>
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<span style="font-family: Calibri;">It is recommended that Lawrence and Douglas County adopt
growth management in its comprehensive plan.<span style="mso-spacerun: yes;">
</span>The concept is straightforward; if the community is growing by 250
households per year, the planning process should not permit more than 250
additional units to be added to the supply.<span style="mso-spacerun: yes;">
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<span style="font-family: Calibri;">To rectify the harm that has been done to older
neighborhoods, the planning process should strive to keep the growth in supply
below the growth in demand for a period of time so as to direct some portion of
the growth back into the older neighborhoods restoring the population, investment
and value previously lost.</span></div>
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<span style="font-family: Calibri;">Growth management offers a new, more beneficial form of
competition to the development process.<span style="mso-spacerun: yes;">
</span>Under the current approach, developers compete with each other for a
limited demand, harming older neighborhoods in the process.<span style="mso-spacerun: yes;"> </span>Under growth management, developers compete
with each other for selection as one of the designated developers for the
limited amount of development that will be permitted given the growth in
demand.<span style="mso-spacerun: yes;"> </span>As the developers compete for
this designation, they tend to enhance their projects through the provision of
community services and other amenities in order to be selected.<span style="mso-spacerun: yes;"> </span>This permits the community to gain from these
enhancements and to better direct growth in supply where it is needed, more effectively
than can be done through zoning alone.</span></div>
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Kirk McClurehttp://www.blogger.com/profile/05289172523302036414noreply@blogger.com0tag:blogger.com,1999:blog-34311931.post-10364044732109239212014-07-20T06:13:00.002-07:002014-07-20T06:14:25.716-07:00Should Lawrence Approve the Southpoint Development on South Iowa Street?
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<span style="mso-bidi-font-family: Tahoma;"><span style="font-family: Calibri;"><strong>The Proposed Southpoint Development</strong></span></span></div>
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<span style="mso-bidi-font-family: Tahoma;"><span style="font-family: Calibri;">The applicant, Collett and Associates,
seeks to develop a parcel on Iowa Street through an amendment to Horizon 2020,
annexation of land and rezoning of the land. The proposal, Southpoint, calls
for development of: About 460,000 square feet of retail in a first phase;
80,000 square feet for a 100-room hotel; and probably about 70,000 square of
additional square feet of retail in a second phase (14 parcels at 5,000 square
feet per parcel).<span style="mso-spacerun: yes;"> </span>The development will
contain a total of over 600,000 square feet of commercial space.</span></span></div>
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<span style="mso-bidi-font-family: Tahoma;"><span style="font-family: Calibri;">This project is large; when fully built it
will be the equivalent of 40 percent of our downtown.<span style="mso-spacerun: yes;"> </span>It will expand the supply of space on South
Iowa by about 30 percent.<span style="mso-spacerun: yes;"> </span>At this scale
it has the potential to have a significant negative impact on other retail
shopping districts in Lawrence, including the downtown.</span></span></div>
</div>
<span style="font-family: "Calibri","sans-serif"; font-size: 11pt; mso-ansi-language: EN-US; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: Tahoma; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;"><br clear="all" style="mso-break-type: section-break; page-break-before: always;" />
</span>
<br />
<div style="margin: 0in 0in 0pt; mso-layout-grid-align: none;">
<i style="mso-bidi-font-style: normal;"><span style="mso-bidi-font-family: Tahoma;"><span style="font-family: Calibri;">Additional
Hotel Space:<span style="mso-tab-count: 1;"> </span></span></span></i></div>
<br />
<div style="margin: 0in 0in 0pt; mso-layout-grid-align: none;">
<span style="mso-bidi-font-family: Tahoma;"><span style="font-family: Calibri;"> </span></span></div>
<br />
<div style="margin: 0in 0in 0pt; mso-layout-grid-align: none;">
<span style="mso-bidi-font-family: Tahoma;"><span style="font-family: Calibri;">The issue:<span style="mso-spacerun: yes;">
</span>Can the community absorb additional hotel space without threatening
existing and future taxpayer investment in hotels?</span></span></div>
<br />
<div style="margin: 0in 0in 0pt; mso-layout-grid-align: none;">
<span style="mso-bidi-font-family: Tahoma;"><span style="font-family: Calibri;"> </span></span></div>
<br />
<div style="margin: 0in 0in 0pt; mso-layout-grid-align: none;">
<span style="mso-bidi-font-family: Tahoma;"><span style="font-family: Calibri;">The taxpayers of Lawrence are heavily invested
in hotels.<span style="mso-spacerun: yes;"> </span>The taxpayers invested about $11
million in the Oread Hotel.<span style="mso-spacerun: yes;"> </span>The
taxpayers are investing about $10 million in the 9<sup><span style="font-size: x-small;">th</span></sup> and New
Hampshire project with a significant portion of that amount serving the new hotel.</span></span></div>
<br />
<div style="margin: 0in 0in 0pt; mso-layout-grid-align: none;">
<span style="mso-bidi-font-family: Tahoma;"><span style="font-family: Calibri;"> </span></span></div>
<br />
<div style="margin: 0in 0in 0pt; mso-layout-grid-align: none;">
<span style="mso-bidi-font-family: Tahoma;"><span style="font-family: Calibri;">Lawrence has zoned multiple parcels for additional
hotel space.<span style="mso-spacerun: yes;"> </span>Hotel zoning was approved
in the North Mass development.<span style="mso-spacerun: yes;"> </span>Hotel
zoning was approved in the latest revision of the Bauer Farms development.</span></span></div>
<br />
<div style="margin: 0in 0in 0pt; mso-layout-grid-align: none;">
<span style="mso-bidi-font-family: Tahoma;"><span style="font-family: Calibri;"> </span></span></div>
<br />
<div style="margin: 0in 0in 0pt; mso-layout-grid-align: none;">
<span style="mso-bidi-font-family: Tahoma;"><span style="font-family: Calibri;">Lawrence is about to begin a process that
may lead to a new conference center.<span style="mso-spacerun: yes;">
</span>This center will probably include additional hotel space, and this hotel
and conference center will probably include a significant taxpayer contribution.</span></span></div>
<br />
<div style="margin: 0in 0in 0pt; mso-layout-grid-align: none;">
<span style="mso-bidi-font-family: Tahoma;"><span style="mso-tab-count: 1;"><span style="font-family: Calibri;"> </span></span></span></div>
<br />
<div style="margin: 0in 0in 0pt; mso-layout-grid-align: none;">
<span style="mso-bidi-font-family: Tahoma;"><span style="font-family: Calibri;">The Southpoint proposal includes a hotel.<span style="mso-spacerun: yes;"> </span>The staff report is silent on the hotel issue.<span style="mso-spacerun: yes;"> </span>It is unknown whether or not the city can
absorb an additional hotel without threatening its already large investment in
hotels.</span></span></div>
<br />
<div style="margin: 0in 0in 0pt 1in; mso-layout-grid-align: none; text-indent: -0.5in;">
<span style="mso-bidi-font-family: Tahoma;"><span style="font-family: Calibri;"> </span></span></div>
<br />
<div style="margin: 0in 0in 0pt; mso-layout-grid-align: none;">
<span style="mso-bidi-font-family: Tahoma;"><span style="font-family: Calibri;">The City made the hotel investments without
careful study of the city’s capacity to absorb new hotel space.<span style="mso-spacerun: yes;"> </span>The City is about to embark on such a study
to guide it to a better decision on the conference center.</span></span></div>
<br />
<div style="margin: 0in 0in 0pt 1in; mso-layout-grid-align: none; text-indent: -0.5in;">
<span style="mso-bidi-font-family: Tahoma;"><span style="font-family: Calibri;"> </span></span></div>
<br />
<div style="margin: 0in 0in 0pt; mso-layout-grid-align: none;">
<span style="mso-bidi-font-family: Tahoma;"><span style="font-family: Calibri;">Zoning for additional hotel space may hurt
an already saturated market.<span style="mso-spacerun: yes;"> </span>Zoning for
additional hotel space may threaten existing taxpayer investment.</span></span></div>
<br />
<div style="margin: 0in 0in 0pt; mso-layout-grid-align: none;">
<span style="mso-bidi-font-family: Tahoma;"><span style="font-family: Calibri;"> </span></span></div>
<br />
<div style="margin: 0in 0in 0pt; mso-layout-grid-align: none;">
<span style="mso-bidi-font-family: Tahoma;"><span style="font-family: Calibri;">Recommendation on the hotel component:<span style="mso-spacerun: yes;"> </span>Do not approve additional hotel space until the
absorption study is complete and it is clear that additional hotel space will
not threaten existing, and possibly future, taxpayer investment.</span></span></div>
<br />
<div style="margin: 0in 0in 0pt; mso-layout-grid-align: none;">
<span style="mso-bidi-font-family: Tahoma;"><span style="font-family: Calibri;"> </span></span></div>
<br />
<div style="margin: 0in 0in 0pt; mso-layout-grid-align: none;">
<span style="mso-bidi-font-family: Tahoma;"><span style="font-family: Calibri;"> </span></span></div>
<br />
<div style="margin: 0in 0in 0pt; mso-layout-grid-align: none;">
<i style="mso-bidi-font-style: normal;"><span style="mso-bidi-font-family: Tahoma;"><span style="font-family: Calibri;">Additional
Retail Space:</span></span></i></div>
<br />
<div style="margin: 0in 0in 0pt; mso-layout-grid-align: none;">
<span style="mso-bidi-font-family: Tahoma;"><span style="font-family: Calibri;"> </span></span></div>
<br />
<div style="margin: 0in 0in 0pt; mso-layout-grid-align: none;">
<span style="mso-bidi-font-family: Tahoma;"><span style="font-family: Calibri;">The Issue: Can the Lawrence retail market
absorb the proposed space without significant negative impact upon existing
retail districts? </span></span></div>
<br />
<div style="margin: 0in 0in 0pt; mso-layout-grid-align: none;">
<span style="mso-bidi-font-family: Tahoma;"><span style="mso-tab-count: 1;"><span style="font-family: Calibri;"> </span></span></span></div>
<br />
<div style="margin: 0in 0in 0pt; mso-layout-grid-align: none;">
<span style="mso-bidi-font-family: Tahoma;"><span style="font-family: Calibri;">The Economics of Retail Markets:<span style="mso-spacerun: yes;"> </span>In a well-balanced market, the supply should
grow in proportion with growth in demand.</span></span></div>
<br />
<div style="margin: 0in 0in 0pt 0.5in; mso-layout-grid-align: none; text-indent: -0.5in;">
<span style="mso-bidi-font-family: Tahoma;"><span style="font-family: Calibri;"> </span></span></div>
<br />
<div style="margin: 0in 0in 0pt; mso-layout-grid-align: none;">
<span style="mso-bidi-font-family: Tahoma;"><span style="font-family: Calibri;">The economics of retail real estate are
well established.<span style="mso-spacerun: yes;"> </span>Demand for retail
space is what determines the value of retail space, the number of jobs it will
produce and the sales tax revenues that it will generate.<span style="mso-spacerun: yes;"> </span>The supply of retail space does not drive
these outcomes. There are many false beliefs that building real estate grows
the economy.<span style="mso-spacerun: yes;"> </span>It does not.<span style="mso-spacerun: yes;"> </span>Growth in the economy is a function of growth
in the aggregate income of the households within the community because income
sets the amount of spending that a market will experience.<span style="mso-spacerun: yes;"> </span>More stores do not create more spending;
rather, only more income to the households in the community can drive growth in
the economy.<span style="mso-spacerun: yes;"> </span>As a result, more stores do
not create more spending, more sales taxes, more retail jobs or more value of
all retail buildings.<span style="mso-spacerun: yes;"> </span>If too many stores
are added to a market, the stores vie for the finite amount of spending,
driving down the revenue per square foot, hurting all stores.</span></span></div>
<br />
<div style="margin: 0in 0in 0pt; mso-layout-grid-align: none;">
<span style="mso-bidi-font-family: Tahoma;"><span style="font-family: Calibri;"> </span></span></div>
<br />
<div style="margin: 0in 0in 0pt; mso-layout-grid-align: none;">
<span style="mso-bidi-font-family: Tahoma;"><span style="font-family: Calibri;">Retail Demand:<span style="mso-spacerun: yes;"> </span>The best proxy for demand in a market is the local
retail sales tax revenues.<span style="mso-spacerun: yes;"> </span>They show the
actual spending in the market reflecting changes in income, the community’s
pull factor and the use of on-line shopping.</span></span></div>
<br />
<div style="margin: 0in 0in 0pt 0.5in; mso-layout-grid-align: none; text-indent: -0.5in;">
<span style="mso-bidi-font-family: Tahoma;"><span style="font-family: Calibri;"> </span></span></div>
<br />
<div style="margin: 0in 0in 0pt; mso-layout-grid-align: none;">
<span style="mso-bidi-font-family: Arial;"><span style="font-family: Calibri;">The City’s retail market study shows that
inflation adjusted retail sales taxes have been flat from 2000 to 2012.<span style="mso-spacerun: yes;"> </span>They actually declined very slightly at -.012
percent per year over the last twelve years.<span style="mso-spacerun: yes;">
</span>However, there has been negligible growth from 1995 to 2014 at +0.40
percent per year. Thus, for a long period of time, retail spending in real terms
has not grown for about 20 years.<span style="mso-spacerun: yes;"> </span>See
the table below.</span></span></div>
<br />
<div style="margin: 0in 0in 0pt 0.5in; mso-layout-grid-align: none;">
<span style="mso-bidi-font-family: Arial;"><span style="font-family: Calibri;"> </span></span></div>
<br />
<div style="margin: 0in 0in 0pt; mso-layout-grid-align: none;">
<span style="mso-bidi-font-family: Arial;"><span style="font-family: Calibri;"> </span></span></div>
<br />
<div style="border-color: currentColor currentColor windowtext; border-image: none; border-style: none none solid; border-width: medium medium 1pt; mso-border-bottom-alt: solid windowtext .5pt; mso-element: para-border-div; padding: 0in 0in 1pt;">
<div style="border-image: none; border: currentColor; margin: 0in 0in 0pt; mso-border-bottom-alt: solid windowtext .5pt; mso-padding-alt: 0in 0in 1.0pt 0in; padding: 0in;">
<span style="mso-bidi-font-family: Arial;"><span style="font-family: Calibri;">Table:<span style="mso-tab-count: 1;"> </span>Lawrence Retail Supply
and Demand Conditions 1995 to 2012</span></span></div>
</div>
<br />
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse; margin: auto auto auto 4.65pt; mso-padding-alt: 0in 5.4pt 0in 5.4pt; mso-yfti-tbllook: 1184; width: 268px;">
<tbody>
<tr style="height: 15pt; mso-yfti-firstrow: yes; mso-yfti-irow: 0;">
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 34pt;" valign="bottom" width="45"></td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 97.25pt;" valign="bottom" width="130">
<div style="margin: 0in 0in 0pt;">
<i><span style="color: black; font-size: 10pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><span style="font-family: Calibri;">Inflation</span></span></i></div>
</td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 70pt;" valign="bottom" width="93"></td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 1;">
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 34pt;" valign="bottom" width="45"></td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 97.25pt;" valign="bottom" width="130">
<div style="margin: 0in 0in 0pt;">
<i><span style="color: black; font-size: 10pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><span style="font-family: Calibri;">Adjusted</span></span></i></div>
</td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 70pt;" valign="bottom" width="93">
<div style="margin: 0in 0in 0pt;">
<i><span style="color: black; font-size: 10pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><span style="font-family: Calibri;">Commercial</span></span></i></div>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 2;">
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 34pt;" valign="bottom" width="45"></td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 97.25pt;" valign="bottom" width="130">
<div style="margin: 0in 0in 0pt;">
<i><span style="color: black; font-size: 10pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><span style="font-family: Calibri;">Sales</span></span></i></div>
</td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 70pt;" valign="bottom" width="93">
<div style="margin: 0in 0in 0pt;">
<i><span style="color: black; font-size: 10pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><span style="font-family: Calibri;">Square</span></span></i></div>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 3;">
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 34pt;" valign="bottom" width="45">
<div style="margin: 0in 0in 0pt;">
<i><span style="color: black; font-size: 10pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><span style="font-family: Calibri;">Year</span></span></i></div>
</td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 97.25pt;" valign="bottom" width="130">
<div style="margin: 0in 0in 0pt;">
<i><span style="color: black; font-size: 10pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><span style="font-family: Calibri;">Taxes</span></span></i></div>
</td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 70pt;" valign="bottom" width="93">
<div style="margin: 0in 0in 0pt;">
<i><span style="color: black; font-size: 10pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><span style="font-family: Calibri;">Feet</span></span></i></div>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 4;">
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 34pt;" valign="bottom" width="45"></td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 97.25pt;" valign="bottom" width="130"></td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 70pt;" valign="bottom" width="93"></td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 5;">
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 34pt;" valign="bottom" width="45">
<div style="margin: 0in 0in 0pt;">
<span style="color: black; font-size: 10pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><span style="font-family: Calibri;">2012</span></span></div>
</td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 97.25pt;" valign="bottom" width="130">
<div style="margin: 0in 0in 0pt;">
<span style="color: black; font-size: 10pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><span style="font-family: Calibri;"><span style="mso-spacerun: yes;"> </span>$<span style="mso-spacerun: yes;">
</span>13,593,996 </span></span></div>
</td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 70pt;" valign="bottom" width="93">
<div style="margin: 0in 0in 0pt;">
<span style="color: black; font-size: 10pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><span style="font-family: Calibri;"><span style="mso-spacerun: yes;"> </span>9,105,151 </span></span></div>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 6;">
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 34pt;" valign="bottom" width="45">
<div style="margin: 0in 0in 0pt;">
<span style="color: black; font-size: 10pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><span style="font-family: Calibri;">2000</span></span></div>
</td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 97.25pt;" valign="bottom" width="130">
<div style="margin: 0in 0in 0pt;">
<span style="color: black; font-size: 10pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><span style="font-family: Calibri;"><span style="mso-spacerun: yes;"> </span>$<span style="mso-spacerun: yes;">
</span>13,797,066 </span></span></div>
</td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 70pt;" valign="bottom" width="93">
<div style="margin: 0in 0in 0pt;">
<span style="color: black; font-size: 10pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><span style="font-family: Calibri;"><span style="mso-spacerun: yes;"> </span>5,299,404 </span></span></div>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 7;">
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 34pt;" valign="bottom" width="45">
<div style="margin: 0in 0in 0pt;">
<span style="color: black; font-size: 10pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><span style="font-family: Calibri;">1995</span></span></div>
</td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 97.25pt;" valign="bottom" width="130">
<div style="margin: 0in 0in 0pt;">
<span style="color: black; font-size: 10pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><span style="font-family: Calibri;"><span style="mso-spacerun: yes;"> </span>$<span style="mso-spacerun: yes;">
</span>12,695,769 </span></span></div>
</td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 70pt;" valign="bottom" width="93">
<div style="margin: 0in 0in 0pt;">
<span style="color: black; font-size: 10pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><span style="font-family: Calibri;"><span style="mso-spacerun: yes;"> </span>4,372,183 </span></span></div>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 8;">
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 34pt;" valign="bottom" width="45"></td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 97.25pt;" valign="bottom" width="130"></td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 70pt;" valign="bottom" width="93"></td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 9;">
<td colspan="3" nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 201.25pt;" valign="bottom" width="268">
<div style="margin: 0in 0in 0pt;">
<i><span style="color: black; font-size: 10pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><span style="font-family: Calibri;">Demand
Annualized Growth Rate</span></span></i></div>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 10;">
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 34pt;" valign="bottom" width="45"></td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 97.25pt;" valign="bottom" width="130">
<div align="right" style="margin: 0in 0in 0pt; text-align: right;">
<b style="mso-bidi-font-weight: normal;"><span style="color: black; font-size: 10pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><span style="font-family: Calibri;">0.40%</span></span></b></div>
</td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 70pt;" valign="bottom" width="93">
<div align="right" style="margin: 0in 0in 0pt; text-align: right;">
<b style="mso-bidi-font-weight: normal;"><span style="color: black; font-size: 10pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><span style="font-family: Calibri;">1995 to 2012</span></span></b></div>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 11;">
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 34pt;" valign="bottom" width="45"></td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 97.25pt;" valign="bottom" width="130">
<div align="right" style="margin: 0in 0in 0pt; text-align: right;">
<span style="color: black; font-size: 10pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><span style="font-family: Calibri;">-0.12%</span></span></div>
</td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 70pt;" valign="bottom" width="93">
<div align="right" style="margin: 0in 0in 0pt; text-align: right;">
<span style="color: black; font-size: 10pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><span style="font-family: Calibri;">2000 to 2012</span></span></div>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 12;">
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 34pt;" valign="bottom" width="45"></td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 97.25pt;" valign="bottom" width="130"></td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 70pt;" valign="bottom" width="93"></td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 13;">
<td colspan="3" nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 201.25pt;" valign="bottom" width="268">
<div style="margin: 0in 0in 0pt;">
<i><span style="color: black; font-size: 10pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><span style="font-family: Calibri;">Supply
Annualized Growth Rate</span></span></i></div>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 14;">
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 34pt;" valign="bottom" width="45"></td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 97.25pt;" valign="bottom" width="130">
<div align="right" style="margin: 0in 0in 0pt; text-align: right;">
<b style="mso-bidi-font-weight: normal;"><span style="color: black; font-size: 10pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><span style="font-family: Calibri;">4.4%</span></span></b></div>
</td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 70pt;" valign="bottom" width="93">
<div align="right" style="margin: 0in 0in 0pt; text-align: right;">
<b style="mso-bidi-font-weight: normal;"><span style="color: black; font-size: 10pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><span style="font-family: Calibri;">1995 to 2012</span></span></b></div>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 15; mso-yfti-lastrow: yes;">
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 34pt;" valign="bottom" width="45"></td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 97.25pt;" valign="bottom" width="130">
<div align="right" style="margin: 0in 0in 0pt; text-align: right;">
<span style="color: black; font-size: 10pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><span style="font-family: Calibri;">4.6%</span></span></div>
</td>
<td nowrap="" style="background-color: transparent; border-image: none; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 70pt;" valign="bottom" width="93">
<div align="right" style="margin: 0in 0in 0pt; text-align: right;">
<span style="color: black; font-size: 10pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><span style="font-family: Calibri;">2000 to 2012</span></span></div>
</td>
</tr>
</tbody></table>
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<div style="border-color: currentColor currentColor windowtext; border-image: none; border-style: none none solid; border-width: medium medium 1pt; mso-border-bottom-alt: solid windowtext .5pt; mso-element: para-border-div; padding: 0in 0in 1pt;">
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<span style="mso-bidi-font-family: Arial;"><span style="font-family: Calibri;"> </span></span></div>
</div>
<br />
<div style="margin: 0in 0in 0pt;">
<span style="mso-bidi-font-family: Arial;"><span style="font-family: Calibri;"> </span></span></div>
<br />
<div style="margin: 0in 0in 0pt;">
<span style="font-size: 9pt; mso-bidi-font-family: Arial;"><span style="font-family: Calibri;">Source:<span style="mso-spacerun: yes;"> </span>City of Lawrence 2012 Retail Market Report</span></span></div>
<br />
<div style="margin: 0in 0in 0pt; mso-layout-grid-align: none;">
<span style="mso-bidi-font-family: Arial;"><span style="font-family: Calibri;"> </span></span></div>
<br />
<div style="margin: 0in 0in 0pt; mso-layout-grid-align: none;">
<span style="mso-bidi-font-family: Arial;"><span style="font-family: Calibri;">Demand Conclusion:<span style="mso-spacerun: yes;"> </span>The city’s capacity to support growth in its
supply of retail space is non-existent.<span style="mso-spacerun: yes;">
</span>With no growth in retail spending, the city has no capacity to support
additional retail space at this time.<span style="mso-spacerun: yes;">
</span>The developer is only seeking to capture a share of that spending for
the proposed development, taking this demand, and possibly some of the vendors,
away from existing shopping districts.</span></span></div>
<br />
<div style="margin: 0in 0in 0pt; mso-layout-grid-align: none;">
<span style="mso-bidi-font-family: Arial;"><span style="font-family: Calibri;"> </span></span></div>
<br />
<div style="margin: 0in 0in 0pt; mso-layout-grid-align: none;">
<span style="mso-bidi-font-family: Arial;"><span style="font-family: Calibri;">Retail Supply: The stock of retail space has
grown dramatically since 1995, which is the last time there seemed to be a
balance between the supply of and the demand for retail space.<span style="mso-spacerun: yes;"> </span>From 1995 to 2012, the stock grew by 4.8
million square feet.<span style="mso-spacerun: yes;"> </span>This growth translates
into a rate of growth of 4.4 percent per year.<span style="mso-spacerun: yes;">
</span><span style="mso-spacerun: yes;"> </span>The City has approved an
additional 1.2 million square feet at 6<sup><span style="font-size: x-small;">th</span></sup> Street and the SLT,
Fairfield Farms, North Mass and 31<sup><span style="font-size: x-small;">st</span></sup> and Ousdahl Streets.</span></span></div>
<br />
<div style="margin: 0in 0in 0pt;">
<span style="mso-bidi-font-family: Arial;"><span style="mso-tab-count: 1;"><span style="font-family: Calibri;"> </span></span></span></div>
<br />
<div style="margin: 0in 0in 0pt;">
<span style="mso-bidi-font-family: Arial;"><span style="font-family: Calibri;">Supply
conclusion:<span style="mso-spacerun: yes;"> </span>The supply of retail space is
growing rapidly with much more approved for development.<span style="mso-spacerun: yes;"> </span></span></span></div>
<br />
<div style="margin: 0in 0in 0pt;">
<span style="mso-bidi-font-family: Arial;"><span style="font-family: Calibri;"> </span></span></div>
<br />
<div style="margin: 0in 0in 0pt;">
<span style="mso-bidi-font-family: Arial;"><span style="font-family: Calibri;">Implications:<span style="mso-spacerun: yes;"> </span>The supply of retail space is growing rapidly
while the retail spending is flat.<span style="mso-spacerun: yes;"> </span>This
means that the revenues per square foot are falling.<span style="mso-spacerun: yes;"> </span>Reduced revenues lowers property values in
existing shopping centers, including the downtown.<span style="mso-spacerun: yes;"> </span>Reduced revenues threaten the ability of
attract investment to older existing properties.<span style="mso-spacerun: yes;"> </span>This is especially threatening to historic
properties such as in our downtown.</span></span></div>
<br />
<div style="margin: 0in 0in 0pt 1.5in; mso-layout-grid-align: none; text-indent: -1.5in;">
<span style="mso-bidi-font-family: Arial;"><span style="font-family: Calibri;"> </span></span></div>
<br />
<div style="margin: 0in 0in 0pt; mso-layout-grid-align: none;">
<span style="mso-bidi-font-family: Arial;"><span style="font-family: Calibri;">If we expect to maintain the condition of
our existing shopping centers, and especially if we want out downtown to
continue to thrive, the space needs to attract sufficient revenue per square
foot to drive sufficient lease rates that attract investment.</span></span></div>
<br />
<div style="margin: 0in 0in 0pt;">
<span style="mso-bidi-font-family: Arial;"><span style="font-family: Calibri;"> </span></span></div>
<br />
<div style="margin: 0in 0in 0pt;">
<span style="mso-bidi-font-family: Arial;"><span style="font-family: Calibri;">Staff report:<span style="mso-spacerun: yes;"> </span>The staff report on the proposed development
concludes that because the vacancy rate has not become terribly bad, that the retail
market will not be hurt by this development.</span></span></div>
<br />
<div style="margin: 0in 0in 0pt 1.5in; text-indent: -1.5in;">
<span style="mso-bidi-font-family: Arial;"><span style="font-family: Calibri;"> </span></span></div>
<br />
<div style="margin: 0in 0in 0pt;">
<span style="mso-bidi-font-family: Arial;"><span style="font-family: Calibri;">Vacancy is one of
many measures of market health, but vacancy is one of the weaker indicators of
market health.<span style="mso-spacerun: yes;"> </span>The notion is that if a
market is overbuilt, the vacancy rate will rise proportionately.<span style="mso-spacerun: yes;"> </span>This is not true. Property owners will fill their
space, even if it means granting rent concessions to attract occupants.<span style="mso-spacerun: yes;"> </span>Even with a rent concession that takes rents
below costs, the property owner will lose less with a rent concession than with
an empty property.</span></span></div>
<br />
<div style="margin: 0in 0in 0pt;">
<span style="mso-bidi-font-family: Arial;"><span style="font-family: Calibri;"> </span></span></div>
<br />
<div style="margin: 0in 0in 0pt;">
<span style="mso-bidi-font-family: Arial;"><span style="font-family: Calibri;">The staff should
expand its analysis to examine the revenues coming into each market segment
(defined both spatially and by type of vendor).<span style="mso-spacerun: yes;">
</span>It is clear from the staff report that the market is suffering from
declining revenues per square foot over a long period of time, which leads to
poor maintenance and reduced investment in existing properties, both of which
are harmful to a retail market.</span></span></div>
<br />
<div style="margin: 0in 0in 0pt;">
<span style="mso-bidi-font-family: Arial;"><span style="font-family: Calibri;"> </span></span></div>
<br />
<div style="margin: 0in 0in 0pt;">
<span style="mso-bidi-font-family: Arial;"><span style="font-family: Calibri;">The Caplan Report:<span style="mso-spacerun: yes;"> </span>The market analysis provided by the developer
contains multiple errors.<span style="mso-spacerun: yes;"> </span>Probably the
most severe is the assumption that sales will rise 4.1 percent per year when
they have not even been keeping up with inflation for a long period of time.</span></span></div>
<br />
<div style="margin: 0in 0in 0pt; mso-layout-grid-align: none;">
<span style="mso-bidi-font-family: Arial;"><span style="font-family: Calibri;"> </span></span></div>
<br />
<div style="margin: 0in 0in 0pt; mso-layout-grid-align: none;">
<span style="mso-bidi-font-family: Arial;"><span style="font-family: Calibri;">The Caplan report uses the argument that the
proposed development will improve the Pull Factor of the entire retail market.<span style="mso-spacerun: yes;"> </span>The report claims that the community will
benefit from new spending attracted to the local market.<span style="mso-spacerun: yes;"> </span>This can be a valid claim in a tourist market
or a market with very special tenants that they become a destination shopping
location not found in the region nor having any close substitutes elsewhere in
the region.</span></span></div>
<br />
<div style="margin: 0in 0in 0pt 1.5in; mso-layout-grid-align: none; text-indent: -1.5in;">
<span style="mso-bidi-font-family: Arial;"><span style="font-family: Calibri;"> </span></span></div>
<br />
<div style="margin: 0in 0in 0pt; mso-layout-grid-align: none;">
<span style="mso-bidi-font-family: Arial;"><span style="font-family: Calibri;">This notion of attracting new spending into
the community is simply not plausible with the proposed project. The vendors
will not attract shoppers that are not already here.<span style="mso-spacerun: yes;"> </span>The vendors listed in the development
proposal are not unique to the Kansas City-Lawrence-Topeka region.<span style="mso-spacerun: yes;"> </span>Thus, shoppers from Johnson County will not
drive here for these vendors; they already have them in Johnson County.<span style="mso-spacerun: yes;"> </span>Shoppers from Shawnee County will not drive
here for these vendors; they already have them, or have very close substitutes,
in Topeka.</span></span></div>
<br />
<div style="margin: 0in 0in 0pt 1.5in; mso-layout-grid-align: none; text-indent: -1.5in;">
<span style="mso-bidi-font-family: Arial;"><span style="font-family: Calibri;"> </span></span></div>
<br />
<div style="margin: 0in 0in 0pt; mso-layout-grid-align: none;">
<span style="mso-bidi-font-family: Arial;"><span style="font-family: Calibri;">The best option to improve the pull factor
in Lawrence is to enhance the one unique, destination shopping district that we
have, Downtown Lawrence.</span></span></div>
<br />
<div style="margin: 0in 0in 0pt 1.5in; mso-layout-grid-align: none; text-indent: -1.5in;">
<span style="mso-bidi-font-family: Arial;"><span style="mso-tab-count: 1;"><span style="font-family: Calibri;"> </span></span></span></div>
<br />
<div style="margin: 0in 0in 0pt 1.5in; mso-layout-grid-align: none; text-indent: -1.5in;">
<span style="font-family: Calibri;"><i style="mso-bidi-font-style: normal;"><span style="mso-bidi-font-family: Tahoma;">Recommendation:</span></i><span style="mso-bidi-font-family: Tahoma;"><span style="mso-tab-count: 1;"> </span></span></span></div>
<br />
<div style="margin: 0in 0in 0pt 1.5in; mso-layout-grid-align: none; text-indent: -1.5in;">
<span style="mso-bidi-font-family: Tahoma;"><span style="font-family: Calibri;"> </span></span></div>
<br />
<div style="margin: 0in 0in 0pt; mso-layout-grid-align: none;">
<span style="mso-bidi-font-family: Tahoma;"><span style="font-family: Calibri;">Someday, this site on South Iowa Street may
be an appropriate site for additional retail space and even hotel space on the
scale proposed. That day is not even in sight.</span></span></div>
<br />
<div style="margin: 0in 0in 0pt; mso-layout-grid-align: none;">
<span style="mso-bidi-font-family: Tahoma;"><span style="font-family: Calibri;"> </span></span></div>
<br />
<ul style="direction: ltr; list-style-type: disc;">
<li style="color: black; font-family: "Calibri","sans-serif"; font-size: 11pt; font-style: normal; font-weight: normal;"><div style="color: black; font-family: "Calibri","sans-serif"; font-size: 11pt; font-style: normal; font-weight: normal; margin-bottom: 0pt; margin-top: 0in; mso-layout-grid-align: none; mso-list: l0 level1 lfo1;">
<span style="mso-bidi-font-family: Tahoma;">Retail
spending remains flat while the supply has grown too quickly.</span></div>
</li>
<li style="color: black; font-family: "Calibri","sans-serif"; font-size: 11pt; font-style: normal; font-weight: normal;"><div style="color: black; font-family: "Calibri","sans-serif"; font-size: 11pt; font-style: normal; font-weight: normal; margin-bottom: 0pt; margin-top: 0in; mso-layout-grid-align: none; mso-list: l0 level1 lfo1;">
<span style="mso-bidi-font-family: Tahoma;">We
want to enhance, not degrade, the condition of our shopping centers and
especially our downtown.</span></div>
</li>
<li style="color: black; font-family: "Calibri","sans-serif"; font-size: 11pt; font-style: normal; font-weight: normal;"><div style="color: black; font-family: "Calibri","sans-serif"; font-size: 11pt; font-style: normal; font-weight: normal; margin-bottom: 0pt; margin-top: 0in; mso-layout-grid-align: none; mso-list: l0 level1 lfo1;">
<span style="mso-bidi-font-family: Tahoma;">We do
not want to jeopardize our current and future hotel investments.</span></div>
</li>
</ul>
<br />
<div style="margin: 0in 0in 0pt; mso-layout-grid-align: none;">
<span style="mso-bidi-font-family: Tahoma;"><span style="font-family: Calibri;"> </span></span></div>
<br />
<div style="margin: 0in 0in 0pt; mso-layout-grid-align: none;">
<span style="mso-bidi-font-family: Tahoma;"><span style="font-family: Calibri;">Lawrence should tell the developer that this proposal is
premature and cannot be approved at this time.</span></span></div>
Kirk McClurehttp://www.blogger.com/profile/05289172523302036414noreply@blogger.com0tag:blogger.com,1999:blog-34311931.post-19881976015581457482014-07-09T10:42:00.000-07:002014-07-09T10:45:08.382-07:00Which is better, smart growth or giveaways?
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<span style="font-size: 12pt;"><span style="font-family: Calibri;">City commissioners
Dever, Farmer and Riordan gave away a package of tax breaks worth over $5
million to developers of the mixed-use development at 11th and Mississippi
Streets.<span style="mso-spacerun: yes;"> </span>In this case, mixed-use means a
combination of luxury apartments designed for students and a small amount of
retail space.</span></span></div>
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<span style="font-size: 12pt;"><span style="font-family: Calibri;"> </span></span><span style="font-size: 12pt;"><span style="font-family: Calibri;"> </span></span></div>
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<i style="mso-bidi-font-style: normal;"><span style="font-size: 12pt;"><span style="font-family: Calibri;">Income
Drives Growth in the Market, Not Growth in Buildings</span></span></i></div>
<br />
<div style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 28.0pt 56.0pt 84.0pt 112.0pt 140.0pt 168.0pt 196.0pt 224.0pt 3.5in 280.0pt 308.0pt 336.0pt;">
<span style="font-size: 12pt;"><span style="font-family: Calibri;"> </span></span></div>
<br />
<div style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 28.0pt 56.0pt 84.0pt 112.0pt 140.0pt 168.0pt 196.0pt 224.0pt 3.5in 280.0pt 308.0pt 336.0pt;">
<span style="font-size: 12pt;"><span style="font-family: Calibri;">The three
commissioners who voted for this package of subsidies displayed a lack of
understanding of basic economics.<span style="mso-spacerun: yes;"> </span>Note
that commissioners Amyx and Schumm voted against it.<span style="mso-spacerun: yes;"> </span></span></span></div>
<br />
<div style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 28.0pt 56.0pt 84.0pt 112.0pt 140.0pt 168.0pt 196.0pt 224.0pt 3.5in 280.0pt 308.0pt 336.0pt;">
<span style="font-size: 12pt;"><span style="font-family: Calibri;"> </span></span></div>
<br />
<div style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 28.0pt 56.0pt 84.0pt 112.0pt 140.0pt 168.0pt 196.0pt 224.0pt 3.5in 280.0pt 308.0pt 336.0pt;">
<span style="font-size: 12pt;"><span style="font-family: Calibri;">A community's economy
grows only insofar as the income of the population grows, whether that growth
is due to new households, higher wages or both.<span style="mso-spacerun: yes;">
</span>The value of the real estate in the community is a function of the
demand for that real estate which rises and falls with the expansion and
contraction of the aggregate income in the community.<span style="mso-spacerun: yes;"> </span>Adding real estate to a community does not
add income to the households, thus it does not add value to the tax base.</span></span></div>
<br />
<div style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 28.0pt 56.0pt 84.0pt 112.0pt 140.0pt 168.0pt 196.0pt 224.0pt 3.5in 280.0pt 308.0pt 336.0pt;">
<span style="font-size: 12pt;"><span style="font-family: Calibri;"> </span></span></div>
<br />
<div style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 28.0pt 56.0pt 84.0pt 112.0pt 140.0pt 168.0pt 196.0pt 224.0pt 3.5in 280.0pt 308.0pt 336.0pt;">
<span style="font-size: 12pt;"><span style="font-family: Calibri;">Does this mixed-used
development respond to growth in demand?<span style="mso-spacerun: yes;">
</span>No. Lawrence has already allowed retail space to grow much faster than
the growth in retail spending. The City’s own retail market study shows that
retail spending since 2000 has been flat in inflation adjusted terms; it
actually has fallen by 0.1 percent per year.<span style="mso-spacerun: yes;">
</span>The supply of space has grown by 4.6% per year.<span style="mso-spacerun: yes;"> </span>The fact that supply has grown much faster
than demand over a long period is clear evidence that the market is in a surplus
condition.<span style="mso-spacerun: yes;"> </span>Lawrence has already allowed
rental housing to grow faster than the growth of renter households.<span style="mso-spacerun: yes;"> </span>From 2000 to 2012, the number of renter
household grew 10.3 percent while the number of rental units grew 12.5
percent.<span style="mso-spacerun: yes;"> </span>This is clear evidence that the
supply of rental housing is in surplus.<span style="mso-spacerun: yes;">
</span>Right now, the community has no pressing need for either more retail
space or more rental units.<span style="mso-spacerun: yes;"> </span></span></span></div>
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<div style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 28.0pt 56.0pt 84.0pt 112.0pt 140.0pt 168.0pt 196.0pt 224.0pt 3.5in 280.0pt 308.0pt 336.0pt;">
<span style="font-size: 12pt;"><span style="font-family: Calibri;"> </span></span></div>
<br />
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<i style="mso-bidi-font-style: normal;"><span style="font-size: 12pt;"><span style="font-family: Calibri;">Zero-sum
Markets</span></span></i></div>
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<span style="font-size: 12pt;"><span style="font-family: Calibri;"> </span></span></div>
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<span style="font-size: 12pt;"><span style="font-family: Calibri;">Building this
mixed-use development will not bring new households or new retail shoppers to
Lawrence.<span style="mso-spacerun: yes;"> </span>The development will only
change the location where renters, who are already here, locate and where
shoppers, who are already here, do their shopping.<span style="mso-spacerun: yes;"> </span>Thus, the rental and retail markets are
zero-sum markets.<span style="mso-spacerun: yes;"> </span>Adding new rental
units does not add new renter households; it simply pulls them away from
elsewhere in the market.<span style="mso-spacerun: yes;"> </span>Adding new
retail space does not add retail shoppers; it simply pulls them away from
elsewhere in the market.</span></span></div>
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<span style="font-size: 12pt;"><span style="font-family: Calibri;"> </span></span></div>
<br />
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<span style="font-size: 12pt;"><span style="font-family: Calibri;">Clearly commissioners
Dever, Farmer and Riordan did not understand that these markets are zero-sum systems.<span style="mso-spacerun: yes;"> </span>To be fair, the planning staff of the City
deserves some of the blame for this mistaken understanding.<span style="mso-spacerun: yes;"> </span>The staff prepared a benefit-cost analysis,
as the law requires for economic development subsidy packages of this type.<span style="mso-spacerun: yes;"> </span>Unfortunately, the staff made the mistaken
assumption that the value of the new rental units increases the overall tax
base of the city.<span style="mso-spacerun: yes;"> </span>This is a mistaken
assumption.<span style="mso-spacerun: yes;"> </span>Because there are no new
renter households with new income, there is no new value to the tax base.<span style="mso-spacerun: yes;"> </span>The value of these new buildings will simply
shift value away from existing rental units to these new units.<span style="mso-spacerun: yes;"> </span>Thus, there are no net benefits from the
project as the staff benefit-cost analysis assumed.<span style="mso-spacerun: yes;"> </span></span></span></div>
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<span style="font-size: 12pt;"><span style="font-family: Calibri;"> </span></span></div>
<br />
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<span style="font-size: 12pt;"><span style="font-family: Calibri;">Commissioners Amyx and
Schumm understand that the new development will not bring new value to the tax
base.<span style="mso-spacerun: yes;"> </span>They are both downtown merchants
who know that adding stores does not add shoppers; it simply spreads the
shopping across more stores, lowering the spending per store for all stores.</span></span></div>
<br />
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<span style="font-size: 12pt;"><span style="font-family: Calibri;"> </span></span></div>
<br />
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<span style="font-size: 12pt;"><span style="font-family: Calibri;">Both commissioners
Dever and Farmer made it clear that they believe the $75 million is net new
value to the community.<span style="mso-spacerun: yes;"> </span>This would be
true only if the apartments and retail space would bring new income and new
spending into the community, but they will not.</span></span></div>
<br />
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<span style="font-size: 12pt;"><span style="font-family: Calibri;"> </span></span></div>
<br />
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<i style="mso-bidi-font-style: normal;"><span style="font-size: 12pt;"><span style="font-family: Calibri;">Good
Growth Management</span></span></i></div>
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<span style="font-size: 12pt;"><span style="font-family: Calibri;"> </span></span></div>
<br />
<div style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 28.0pt 56.0pt 84.0pt 112.0pt 140.0pt 168.0pt 196.0pt 224.0pt 3.5in 280.0pt 308.0pt 336.0pt;">
<span style="font-size: 12pt;"><span style="font-family: Calibri;">What should the City
be doing?<span style="mso-spacerun: yes;"> </span>The City should be regulating
the growth of real estate in the community, whether that real estate is
commercial or residential.<span style="mso-spacerun: yes;"> </span>A healthy
market keeps the supply of space in close correspondence to the demand for that
space.<span style="mso-spacerun: yes;"> </span>But developers are prone to
overbuilding, leading to unhealthy markets.<span style="mso-spacerun: yes;">
</span>We saw that with the housing bubble of 2000 to 2007 and the economic
harm from its collapse.<span style="mso-spacerun: yes;"> </span>Without good
growth management, developers will overbuild and ask for public subsidies to as
they do it.<span style="mso-spacerun: yes;"> </span>We have seen with the
mixed-use development at 11<sup>th</sup> and Mississippi Streets.</span></span></div>
<br />
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<span style="font-size: 12pt;"><span style="font-family: Calibri;"> </span></span></div>
<br />
<div style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 28.0pt 56.0pt 84.0pt 112.0pt 140.0pt 168.0pt 196.0pt 224.0pt 3.5in 280.0pt 308.0pt 336.0pt;">
<span style="font-size: 12pt;"><span style="font-family: Calibri;">If the City practiced
good growth management, the developers would be standing in line waiting for
the City to grant permission to building only the amount of space that is
needed.<span style="mso-spacerun: yes;"> </span>Rather than subsidizing this
space, the City could be exacting better designs and better community amenities
from this space making the developers compete for the designation as the developer
who receives permission to go forward with permission to build.</span></span></div>
<br />
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<span style="font-size: 12pt;"><span style="font-family: Calibri;"> </span></span></div>
<br />
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<i style="mso-bidi-font-style: normal;"><span style="font-size: 12pt;"><span style="font-family: Calibri;">Conclusion</span></span></i></div>
<br />
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<span style="font-size: 12pt;"><span style="font-family: Calibri;"> </span></span></div>
<br />
<div style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 28.0pt 56.0pt 84.0pt 112.0pt 140.0pt 168.0pt 196.0pt 224.0pt 3.5in 280.0pt 308.0pt 336.0pt;">
<span style="font-size: 12pt;"><span style="font-family: Calibri;">Rather than practicing
good growth management and exacting greater community amenities from developers,
commissioners Dever, Farmer and Riordan have contributed to the overbuilding of
our markets and have subsidized luxury student housing in excess of $5 million. We would be a better community with healthier real estate markets if we practiced good growth management.</span></span></div>
<br />
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<span style="font-size: 12pt;"><span style="font-family: Calibri;"> </span></span></div>
<br />
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<span style="font-size: 12pt;"><span style="font-family: Calibri;"> </span></span></div>
Kirk McClurehttp://www.blogger.com/profile/05289172523302036414noreply@blogger.com0tag:blogger.com,1999:blog-34311931.post-86635412322070394622013-06-09T12:39:00.002-07:002013-06-09T12:39:16.139-07:00Should the taxpayers of Lawrence subsidize the KU Athletic Association?
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<b style="mso-bidi-font-weight: normal;"><span style="font-family: Calibri;">Should the taxpayers
of Lawrence subsidize the KU Athletic Association?<o:p></o:p></span></b></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<o:p><span style="font-family: Calibri;"> </span></o:p></div>
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Calibri;">Rock Chalk Park was supposed to be a partnership.<span style="mso-spacerun: yes;"> </span>KU was never part of the partnership.<span style="mso-spacerun: yes;"> </span>Rather, the partnership was the City, the KU Athletic
Association (KUAA), the Endowment Association, and Fritzel Construction.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<o:p><span style="font-family: Calibri;"> </span></o:p></div>
<span style="font-family: Calibri;">The project was to cost $25 million.<span style="mso-spacerun: yes;"> </span>The no-bid recreation center building
contract was estimated to cost $19.9 million.<span style="mso-spacerun: yes;">
</span>The land was to cost about $800 thousand and the architectural fees were
estimated to cost about $900 thousand.<span style="mso-spacerun: yes;">
</span>The City’s share of the infrastructure was to be $3.4 million. The City’s share of the infrastructure was
the amount left under the $25 million cap after deducting the costs of the land, architectural
fees and the building.<span style="mso-spacerun: yes;"> </span>The Athletic
Association was to pay the remainder of the $8.3 million in infrastructure,
about $4.9 million.<span style="mso-spacerun: yes;"> </span>The argument for KUAA
paying this share was simple; the KUAA would use this shared infrastructure to
service its facilities.<o:p></o:p></span><br />
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<o:p><span style="font-family: Calibri;"> </span></o:p></div>
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<o:p><em><span style="font-family: Calibri;">Public Bidding was Supposed to Save the Taxpayers Money</span></em></o:p></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Calibri;">After the public complained, the City Commission decided to
bid the building, a procedure that should have been part of the original
partnership.<span style="mso-spacerun: yes;"> </span>The $19.9 million building
came in at $10.5 million.<span style="mso-spacerun: yes;"> </span>This should
have been a savings to the taxpayers of $9.4 million, but it appears to have
become a windfall to the Athletic Association.<o:p></o:p></span></div>
<br />
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<o:p><span style="font-family: Calibri;"><em>City Commission Rushes to Approve a Revised Budget</em> </span></o:p></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Calibri;">In great haste, the City Commission pushed through a new
budget Tuesday night.<span style="mso-spacerun: yes;"> </span>The public only
had hours to study the numbers.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Calibri;">The project now will cost $24.5 million with the building
costing $10.5 million.<span style="mso-spacerun: yes;"> </span>The City will pay
for the entire shared infrastructure now estimated to cost $12.3 million after
more careful estimates were made and some upgrades were added to the list.<span style="mso-spacerun: yes;"> </span>The Assist foundation will now contribute $2
million.<span style="mso-spacerun: yes;"> </span>The net result will lower the
taxpayer costs to $22.5 million, but the KU AA Association makes no
contribution toward the cost of the infrastructure serving its facilities.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<o:p><span style="font-family: Calibri;"> </span></o:p></div>
<br />
<table border="0" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; margin: auto auto auto 4.65pt; mso-padding-alt: 0in 5.4pt 0in 5.4pt; mso-yfti-tbllook: 1184; width: 529px;">
<tbody>
<tr style="height: 15pt; mso-yfti-firstrow: yes; mso-yfti-irow: 0;">
<td colspan="2" nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 267pt;" valign="bottom" width="356">
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<b><i><span style="color: black; font-size: 10pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">Rock Chalk Park Cost
Estimates, Original and Revised<o:p></o:p></span></span></i></b></div>
</td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 29pt;" valign="bottom" width="39"></td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 100.45pt;" valign="bottom" width="134"></td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 1;">
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 158.65pt;" valign="bottom" width="212"></td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 108.35pt;" valign="bottom" width="144"></td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 29pt;" valign="bottom" width="39"></td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 100.45pt;" valign="bottom" width="134"></td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 2;">
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 158.65pt;" valign="bottom" width="212"></td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 108.35pt;" valign="bottom" width="144">
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<i><span style="color: black; font-size: 10pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">Original Estimated Costs<o:p></o:p></span></span></i></div>
</td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 29pt;" valign="bottom" width="39"></td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 100.45pt;" valign="bottom" width="134">
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<i><span style="color: black; font-size: 10pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">Revised Estimated Costs<o:p></o:p></span></span></i></div>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 3;">
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 158.65pt;" width="212">
<div class="MsoNormal" style="margin: 0in 0in 0pt; text-align: justify;">
<i><span style="color: black; font-size: 10pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">Item<o:p></o:p></span></span></i></div>
</td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 108.35pt;" valign="bottom" width="144">
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<i><span style="color: black; font-size: 10pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">City Web Site<o:p></o:p></span></span></i></div>
</td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 29pt;" valign="bottom" width="39"></td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 100.45pt;" valign="bottom" width="134">
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<i><span style="color: black; font-size: 10pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">Memo 6/4/2013<o:p></o:p></span></span></i></div>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 4;">
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 158.65pt;" valign="bottom" width="212"></td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 108.35pt;" width="144"></td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 29pt;" width="39"></td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 100.45pt;" valign="bottom" width="134"></td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 5;">
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 158.65pt;" width="212">
<div class="MsoNormal" style="margin: 0in 0in 0pt; text-align: justify;">
<span style="color: black; font-size: 10pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">TOTAL CAP<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 108.35pt;" valign="bottom" width="144">
<div align="right" class="MsoNormal" style="margin: 0in 0in 0pt; text-align: right;">
<span style="color: black; font-size: 10pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">25,000,000<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 29pt;" valign="bottom" width="39"></td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 100.45pt;" valign="bottom" width="134">
<div align="right" class="MsoNormal" style="margin: 0in 0in 0pt; text-align: right;">
<span style="color: black; font-size: 10pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">22,500,000<o:p></o:p></span></span></div>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 6;">
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 158.65pt;" valign="bottom" width="212"></td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 108.35pt;" width="144"></td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 29pt;" width="39"></td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 100.45pt;" valign="bottom" width="134"></td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 7;">
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 158.65pt;" valign="bottom" width="212">
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="color: black; font-size: 10pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">Net:<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 108.35pt;" width="144"></td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 29pt;" width="39"></td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 100.45pt;" valign="bottom" width="134"></td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 8;">
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 158.65pt;" width="212">
<div class="MsoNormal" style="margin: 0in 0in 0pt; text-align: justify;">
<span style="color: black; font-size: 10pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">Architecture Fees<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 108.35pt;" valign="bottom" width="144">
<div align="right" class="MsoNormal" style="margin: 0in 0in 0pt; text-align: right;">
<span style="color: black; font-size: 10pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">925,000<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 29pt;" valign="bottom" width="39"></td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 100.45pt;" valign="bottom" width="134">
<div align="right" class="MsoNormal" style="margin: 0in 0in 0pt; text-align: right;">
<span style="color: black; font-size: 10pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">925,000<o:p></o:p></span></span></div>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 9;">
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 158.65pt;" width="212">
<div class="MsoNormal" style="margin: 0in 0in 0pt; text-align: justify;">
<span style="color: black; font-size: 10pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">Land<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 108.35pt;" valign="bottom" width="144">
<div align="right" class="MsoNormal" style="margin: 0in 0in 0pt; text-align: right;">
<span style="color: black; font-size: 10pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">784,050<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 29pt;" valign="bottom" width="39"></td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 100.45pt;" valign="bottom" width="134">
<div align="right" class="MsoNormal" style="margin: 0in 0in 0pt; text-align: right;">
<span style="color: black; font-size: 10pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">784,050<o:p></o:p></span></span></div>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 10;">
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 158.65pt;" width="212">
<div class="MsoNormal" style="margin: 0in 0in 0pt; text-align: justify;">
<span style="color: black; font-size: 10pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">Recreation Center Building<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 108.35pt;" width="144">
<div align="right" class="MsoNormal" style="margin: 0in 0in 0pt; text-align: right;">
<span style="color: black; font-size: 10pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">19,910,000<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 29pt;" width="39"></td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 100.45pt;" valign="bottom" width="134">
<div align="right" class="MsoNormal" style="margin: 0in 0in 0pt; text-align: right;">
<span style="color: black; font-size: 10pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">10,500,000<o:p></o:p></span></span></div>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 11;">
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 158.65pt;" width="212">
<div class="MsoNormal" style="margin: 0in 0in 0pt; text-align: justify;">
<span style="color: black; font-size: 10pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">Assist Foundation<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 108.35pt;" valign="bottom" width="144">
<div align="right" class="MsoNormal" style="margin: 0in 0in 0pt; text-align: right;">
<span style="color: black; font-size: 10pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">0<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 29pt;" valign="bottom" width="39"></td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 100.45pt;" valign="bottom" width="134">
<div align="right" class="MsoNormal" style="margin: 0in 0in 0pt; text-align: right;">
<span style="color: black; font-size: 10pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">-2,000,000<o:p></o:p></span></span></div>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 12;">
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 158.65pt;" valign="bottom" width="212"></td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 108.35pt;" valign="bottom" width="144"></td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 29pt;" valign="bottom" width="39"></td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 100.45pt;" valign="bottom" width="134"></td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 13;">
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 158.65pt;" width="212">
<div class="MsoNormal" style="margin: 0in 0in 0pt; text-align: justify;">
<span style="color: black; font-size: 10pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">City share of Infrastructure<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 108.35pt;" valign="bottom" width="144">
<div align="right" class="MsoNormal" style="margin: 0in 0in 0pt; text-align: right;">
<span style="color: black; font-size: 10pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">3,380,950<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 29pt;" width="39">
<div class="MsoNormal" style="margin: 0in 0in 0pt; text-align: justify;">
<span style="color: black; font-size: 10pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">*<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 100.45pt;" valign="bottom" width="134">
<div align="right" class="MsoNormal" style="margin: 0in 0in 0pt; text-align: right;">
<span style="color: black; font-size: 10pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">12,290,950<o:p></o:p></span></span></div>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 14;">
<td colspan="3" nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 296pt;" valign="bottom" width="395">
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="color: black; font-size: 10pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">* Calculated as the
residual remaining under the cap $25 million<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 100.45pt;" valign="bottom" width="134"></td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 15;">
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 158.65pt;" valign="bottom" width="212"></td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 108.35pt;" valign="bottom" width="144"></td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 29pt;" valign="bottom" width="39"></td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 100.45pt;" valign="bottom" width="134"></td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 16;">
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 158.65pt;" width="212"></td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 108.35pt;" valign="top" width="144">
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<i><span style="color: black; font-size: 10pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">Estimated Infrastructure<o:p></o:p></span></span></i></div>
</td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 29pt;" valign="top" width="39"></td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 100.45pt;" valign="top" width="134">
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<i><span style="color: black; font-size: 10pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">Estimated Infrastructure<o:p></o:p></span></span></i></div>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 17;">
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 158.65pt;" valign="bottom" width="212"></td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 108.35pt;" valign="bottom" width="144">
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<i><span style="color: black; font-size: 10pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">Costs Original<o:p></o:p></span></span></i></div>
</td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 29pt;" valign="bottom" width="39"></td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 100.45pt;" valign="bottom" width="134">
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<i><span style="color: black; font-size: 10pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">Costs Revised<o:p></o:p></span></span></i></div>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 18;">
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 158.65pt;" valign="bottom" width="212"></td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 108.35pt;" valign="bottom" width="144"></td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 29pt;" valign="bottom" width="39"></td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 100.45pt;" valign="bottom" width="134"></td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 19;">
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 158.65pt;" width="212">
<div class="MsoNormal" style="margin: 0in 0in 0pt; text-align: justify;">
<span style="color: black; font-size: 10pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">Total shared infrastructure<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 108.35pt;" valign="bottom" width="144">
<div align="right" class="MsoNormal" style="margin: 0in 0in 0pt; text-align: right;">
<span style="color: black; font-size: 10pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">8,345,333<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 29pt;" valign="bottom" width="39"></td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 100.45pt;" valign="bottom" width="134">
<div align="right" class="MsoNormal" style="margin: 0in 0in 0pt; text-align: right;">
<span style="color: black; font-size: 10pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">12,290,950<o:p></o:p></span></span></div>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 20;">
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 158.65pt;" valign="bottom" width="212"></td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 108.35pt;" valign="bottom" width="144"></td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 29pt;" valign="bottom" width="39"></td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 100.45pt;" valign="bottom" width="134"></td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 21; mso-yfti-lastrow: yes;">
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 158.65pt;" valign="bottom" width="212">
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="color: black; font-size: 10pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">Fritzel/KUAA share of
infrastructure<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 108.35pt;" valign="bottom" width="144">
<div align="right" class="MsoNormal" style="margin: 0in 0in 0pt; text-align: right;">
<span style="color: black; font-size: 10pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">4,964,383<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 29pt;" valign="bottom" width="39"></td>
<td nowrap="" style="background-color: transparent; border: rgb(0, 0, 0); height: 15pt; padding: 0in 5.4pt; width: 100.45pt;" valign="bottom" width="134">
<div align="right" class="MsoNormal" style="margin: 0in 0in 0pt; text-align: right;">
<span style="color: black; font-size: 10pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-hansi-font-family: Calibri;"><span style="font-family: Calibri;">0<o:p></o:p></span></span></div>
</td>
</tr>
</tbody></table>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<o:p><span style="font-family: Calibri;"> </span></o:p></div>
<o:p><span style="font-family: Calibri;"> </span></o:p><br />
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Calibri;">Tuesday evening, only a few hours after releasing the new
budget, the City Commission rushed through approval of this arrangement.<span style="mso-spacerun: yes;"> </span>Given the rush, very few members of the
public were even aware of what had happened.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Calibri;">It is time for the City Commission to explain its haste.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Calibri;"><em></em></span> </div>
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Calibri;"><em>Should the taxpayers of Lawrence subsidize the KU Athletic Association?</em><span style="mso-spacerun: yes;"> </span></span></div>
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Calibri;"><span style="mso-spacerun: yes;"></span></span> </div>
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Calibri;"><span style="mso-spacerun: yes;"></span>No.<span style="mso-spacerun: yes;">
</span>The infrastructure includes parking lots, lighting, drainage systems and
more that is all shared between the City of Lawrence and the KU Athletic
Association.<span style="mso-spacerun: yes;"> </span>The taxpayers of Lawrence
should not be expected to shoulder the full costs of this infrastructure.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Calibri;">It is time for the KU Athletic Association to step up and contribute.<span style="mso-spacerun: yes;"> </span>Rather than reap a windfall from the public bidding that should accrue to the taxpayers, the Athletic Association should pay for its share of the shared infrastructure.<o:p></o:p></span></div>
<br />
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<o:p><span style="font-family: Calibri;"> </span></o:p></div>
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<o:p><span style="font-family: Calibri;"> </span></o:p></div>
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<o:p><span style="font-family: Calibri;"> </span></o:p></div>
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<o:p><span style="font-family: Calibri;"> </span></o:p></div>
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<o:p><span style="font-family: Calibri;"> </span></o:p></div>
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<o:p><span style="font-family: Calibri;"> </span></o:p></div>
Kirk McClurehttp://www.blogger.com/profile/05289172523302036414noreply@blogger.com0tag:blogger.com,1999:blog-34311931.post-35584849912017155012012-09-12T20:43:00.002-07:002012-09-12T20:43:45.356-07:00Who does the best job of directing local economic development?
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="color: black; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-themecolor: text1;"><span style="font-family: Calibri;"><strong>Who does the best job of
directing local economic development?<o:p></o:p></strong></span></span></div>
<br />
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<span style="color: black; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-themecolor: text1;"><span style="font-family: Calibri;">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.<span style="mso-spacerun: yes;"> </span>In his remarks, Williams stated that the “best”
local economic development agencies are run by Chambers of Commerce, not by
local government.<o:p></o:p></span></span></div>
<br />
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<span style="color: black; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-themecolor: text1;"><span style="font-family: Calibri;">This seems like an empirical
question which should be informed by looking at the published research on local
economic development.<span style="mso-spacerun: yes;"> </span>What does that
published research have to say on this question?<o:p></o:p></span></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none;">
<span style="color: black; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-themecolor: text1;"><span style="font-family: Calibri;">Wolman
and Spitzley find that local economic development decisions are made through a
political process masquerading as a rational process. <span style="mso-spacerun: yes;"> </span>A political “growth machine” exists that is a
coalition of interests who benefit from real estate development, rather than
real economic growth.<span style="mso-spacerun: yes;"> </span>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, <i style="mso-bidi-font-style: normal;">Economic Development Quarterly</i>
10(3):115-150.)<o:p></o:p></span></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none;">
<span style="color: black; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-themecolor: text1;"><span style="font-family: Calibri;">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.<span style="mso-spacerun: yes;"> </span>When economic development is
directed by a local government, the deals are structured to benefit the
community as a whole.<span style="mso-spacerun: yes;"> </span>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, <i style="mso-bidi-font-style: normal;">Economic
Development Quarterly</i> 2(3):236-251) <o:p></o:p></span></span></div>
<br />
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<span style="color: black; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-themecolor: text1;"><span style="font-family: Calibri;">McGuire
finds that economic development is a collaborative process, but the form of the
collaboration is important.<span style="mso-spacerun: yes;"> </span>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. <span style="mso-bidi-font-weight: bold;">Collaborative Policy Making and
Administration: The Operational Demands of Local Economic Development. </span><i>Economic
Development Quarterly </i>14(3): 278-291.)<o:p></o:p></span></span></div>
<br />
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<span style="color: black; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-themecolor: text1;"><span style="font-family: Calibri;">Opening
up the process can be beneficial.<span style="mso-spacerun: yes;"> </span>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 <span style="mso-spacerun: yes;"> </span>and David B. Elkins. 1991. The Politics of Economic
Development Policy. <i>Economic Development Quarterly</i>, <i>5</i>, 126-139.)<o:p></o:p></span></span></div>
<br />
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<span style="color: black; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-themecolor: text1;"><o:p><span style="font-family: Calibri;"> </span></o:p></span></div>
<span style="color: black; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-themecolor: text1;"><span style="font-family: Calibri;">No one can serve two masters, and
the Chamber of Commerce is no exception.<span style="mso-spacerun: yes;">
</span>It works for its membership as a special interest group advocating for
businesses.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span><br />
<br />
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<span style="color: black; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-themecolor: text1;"><span style="font-family: Calibri;">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.<o:p></o:p></span></span></div>
<br />
<span style="color: black; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-themecolor: text1;"><span style="font-family: Calibri;">The Chamber of Commerce receives
over $400,000 in taxpayer dollars each year from the City and the County.<span style="mso-spacerun: yes;"> </span>The record of accomplishments for this large
annual taxpayer subsidy is very poor.<span style="mso-spacerun: yes;">
</span>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.<span style="mso-spacerun: yes;"> </span>The
Chamber led the City into violations of the Kansas Open Meetings Act in attempt
to broker a deal without the taxpayers’ knowledge.<span style="mso-spacerun: yes;"> </span>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.<span style="mso-spacerun: yes;"> </span>They were wrong, and now the City is stuck
with a large inventory of vacant housing, retail stores, and offices.<o:p></o:p></span></span><br />
<br />
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<span style="color: black; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-themecolor: text1;"><span style="font-family: Calibri;"></span></span> </div>
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="color: black; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-themecolor: text1;"><span style="font-family: Calibri;">The City and the County should
take this money and spend it on professional planners who report to the elected
officials.<span style="mso-spacerun: yes;"> </span>These planners would bring
professional skills to their work and would serve the community as a whole.<span style="mso-spacerun: yes;"> </span>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.<span style="mso-spacerun: yes;">
</span>The Chamber can sit at the table as an equal, interested and
unsubsidized partner.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></div>
<br />
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<span style="color: black; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-themecolor: text1;"><span style="font-family: Calibri;">Who does the best job of
directing local economic development?<span style="mso-spacerun: yes;">
</span>Professional planners working for the community do the best job, not the
Chamber of Commerce working for its business constituency.<o:p></o:p></span></span></div>
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<span style="color: black; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-themecolor: text1;"><o:p><span style="font-family: Calibri;"> </span></o:p></span></div>
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<span style="color: black; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-themecolor: text1;"><o:p><span style="font-family: Calibri;"> </span></o:p></span></div>
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<span style="color: black; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-themecolor: text1;"><o:p><span style="font-family: Calibri;"> </span></o:p></span></div>
Kirk McClurehttp://www.blogger.com/profile/05289172523302036414noreply@blogger.com0tag:blogger.com,1999:blog-34311931.post-32154724897458333752012-08-05T20:04:00.000-07:002012-08-05T20:04:19.930-07:00Do the pros outweigh the cons for the proposed sports complex?<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<b style="mso-bidi-font-weight: normal;"><span style="font-family: Calibri;">Do the pros outweigh
the cons for the proposed sports complex?<o:p></o:p></span></b></div>
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<span style="font-family: Calibri;">The City is considering a sports complex at 6<sup><span style="font-size: x-small;">th</span></sup>
Street and the South Lawrence Trafficway.<span style="mso-spacerun: yes;">
</span>The City contracted with Conventions Sports & Leisure (CS&L) for
a report to project the demand for such a facility.<o:p></o:p></span></div>
<br />
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<br /></div>
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;"><b style="mso-bidi-font-weight: normal;">What are the Pros?</b><o:p></o:p></span></div>
<br />
<div class="MsoListParagraphCxSpFirst" style="margin: 0in 0in 0pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;">
<span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;"><span style="font-family: Calibri;">1.</span><span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";">
</span></span></span><span style="font-family: Calibri;">The project will attract some level of tourist
spending which will generate jobs.<o:p></o:p></span></div>
<br />
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<br /></div>
<div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;">
<span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;"><span style="font-family: Calibri;">2.</span><span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";">
</span></span></span><span style="font-family: Calibri;">The project will leverage a land donation and
financial contributions from Assist Foundation and Fritzel family.<o:p></o:p></span></div>
<o:p><span style="font-family: Calibri;"> </span></o:p><br />
<br />
<div class="MsoListParagraphCxSpLast" style="margin: 0in 0in 10pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;">
<span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;"><span style="font-family: Calibri;">3.</span><span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";">
</span></span></span><span style="font-family: Calibri;">The project may serve the recreation needs of
Northwest Lawrence.<o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;"><b style="mso-bidi-font-weight: normal;">What are the Cons?</b><o:p></o:p></span></div>
<br />
<div class="MsoListParagraph" style="margin: 0in 0in 10pt 0.5in; mso-list: l1 level1 lfo2; text-indent: -0.25in;">
<span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;"><span style="font-family: Calibri;">1.</span><span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";">
</span></span></span><span style="font-family: Calibri;">The project is costly.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt 0.75in;">
<span style="font-family: Calibri;">The City’s indoor component of the
project is estimated to cost $25 million for a 181,000 square foot
fieldhouse.<span style="mso-spacerun: yes;"> </span>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.<span style="mso-spacerun: yes;"> </span><i style="mso-bidi-font-style: normal;">This
suggests that the project costs are inflated and should be examined closely.<o:p></o:p></i></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt 0.75in;">
<span style="font-family: Calibri;">The project causes the City to
jump to the west of the South Lawrence Trafficway, creating a need for very
expensive infrastructure.<span style="mso-spacerun: yes;"> </span>This will cost
many millions of dollars for services that are not now available at the site.<span style="mso-spacerun: yes;"> </span><i style="mso-bidi-font-style: normal;">The
infrastructure costs are too high to be justified by a highly risky sports
complex.<o:p></o:p></i></span></div>
<br />
<div class="MsoListParagraphCxSpFirst" style="margin: 0in 0in 0pt 0.5in; mso-list: l1 level1 lfo2; text-indent: -0.25in;">
<span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;"><span style="font-family: Calibri;">2.</span><span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";">
</span></span></span><span style="font-family: Calibri;">The project is very large.<o:p></o:p></span></div>
<br />
<div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in;">
<br /></div>
<br />
<div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.75in; mso-add-space: auto; tab-stops: .75in;">
<span style="font-family: Calibri;">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.<span style="mso-spacerun: yes;"> </span><i style="mso-bidi-font-style: normal;">Given the size of the Kansas City
metropolitan area, the scale of the proposed fieldhouse appears to be too large
for the market served.<o:p></o:p></i></span></div>
<br />
<div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.75in; mso-add-space: auto; tab-stops: .75in;">
<br /></div>
<br />
<div class="MsoListParagraphCxSpLast" style="margin: 0in 0in 10pt 0.5in; mso-list: l1 level1 lfo2; text-indent: -0.25in;">
<span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;"><span style="font-family: Calibri;">3.</span><span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";">
</span></span></span><span style="font-family: Calibri;">The projected demand for the sports complex is
much higher than the demand experienced by comparable facilities.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt 0.75in;">
<span style="font-family: Calibri;">CS&L report projects the
Lawrence fieldhouse to attract 294,000 attendees annually to 34 tournaments.<span style="mso-spacerun: yes;"> </span>This is greater than the annual draw at the
Fieldhouse USA in Frisco, Texas.<span style="mso-spacerun: yes;"> </span>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.<span style="mso-spacerun: yes;"> </span><i style="mso-bidi-font-style: normal;">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.<o:p></o:p></i></span></div>
<br />
<div class="MsoListParagraph" style="margin: 0in 0in 10pt 0.5in; mso-list: l1 level1 lfo2; text-indent: -0.25in;">
<span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;"><span style="font-family: Calibri;">4.</span><span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";">
</span></span></span><span style="font-family: Calibri;">The fieldhouse will not serve the recreation
needs to the residents of Northwest Lawrence.<i style="mso-bidi-font-style: normal;"><o:p></o:p></i></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt 0.75in;">
<span style="font-family: Calibri;">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.<span style="mso-spacerun: yes;"> </span>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.<span style="mso-spacerun: yes;"> </span><i style="mso-bidi-font-style: normal;">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.</i><o:p></o:p></span></div>
<br />
<div class="MsoListParagraph" style="margin: 0in 0in 10pt 0.5in; mso-list: l1 level1 lfo2; text-indent: -0.25in;">
<span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;"><span style="font-family: Calibri;">5.</span><span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";">
</span></span></span><span style="font-family: Calibri;">Competition in the Kansas City region is not
fully reflected in the demand calculations.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt 0.75in;">
<span style="font-family: Calibri;">The CS&L report lists possible
tournament sponsors.<span style="mso-spacerun: yes;"> </span>This list includes
sponsors who are owners of facilities in the Kansas City area.<span style="mso-spacerun: yes;"> </span>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.<span style="mso-spacerun: yes;"> </span><i style="mso-bidi-font-style: normal;">The list of potential sponsors who would
support tournaments appears to be inflated.<o:p></o:p></i></span></div>
<br />
<div class="MsoListParagraph" style="margin: 0in 0in 10pt 0.5in; mso-list: l1 level1 lfo2; text-indent: -0.25in;">
<span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;"><span style="font-family: Calibri;">6.</span><span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";">
</span></span></span><span style="font-family: Calibri;">Ownership of the facility assumes that Lawrence
taxpayers must absorb all risk.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt 0.75in;">
<span style="font-family: Calibri;">One-half of the comparable
facilities listed in the CS&L report are privately owned.<span style="mso-spacerun: yes;"> </span>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.<span style="mso-spacerun: yes;"> </span><i style="mso-bidi-font-style: normal;">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.<o:p></o:p></i></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt 0.75in;">
<span style="font-family: Calibri;">As structured, the taxpayers of
Lawrence must absorb all of the risk for any operating losses and construction
cost overruns on this project.<span style="mso-spacerun: yes;"> </span>The KU
Athletic Association is absorbing none of these risks.<span style="mso-spacerun: yes;"> </span>Private investors are absorbing none of these
risks.<span style="mso-spacerun: yes;"> </span><i style="mso-bidi-font-style: normal;">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.<o:p></o:p></i></span></div>
<br />
<div class="MsoListParagraph" style="margin: 0in 0in 10pt 0.5in; mso-list: l1 level1 lfo2; text-indent: -0.25in;">
<span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;"><span style="font-family: Calibri;">7.</span><span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";">
</span></span></span><span style="font-family: Calibri;">Partnering with the KU Athletic Association is
questionable.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt 0.75in;">
<span style="font-family: Calibri;">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.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt 0.75in;">
<span style="font-family: Calibri;">The KU Athletic Association is
notorious for not allowing either the public or even KU students to make use of
Athletic Association facilities.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt 0.75in;">
<span style="font-family: Calibri;">Recently, the KU Athletic
Association saw four employees convicted of federal crimes involving stolen
tickets.<span style="mso-spacerun: yes;"> </span>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.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt 0.75in;">
<i style="mso-bidi-font-style: normal;"><span style="font-family: Calibri;">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.<span style="mso-spacerun: yes;"> </span>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.<o:p></o:p></span></i></div>
<br />
<div class="MsoListParagraph" style="margin: 0in 0in 10pt 0.5in; mso-list: l1 level1 lfo2; text-indent: -0.25in;">
<span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;"><span style="font-family: Calibri;">8.</span><span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";">
</span></span></span><span style="font-family: Calibri;">The land donation has prohibitive strings
attached.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt 0.75in;">
<span style="font-family: Calibri;">The City’s plan promised the
residents of the land to the north of the proposed site a buffer from
non-residential uses.<span style="mso-spacerun: yes;"> </span>The land donation
is only enough space to build the facilities without leaving open space as a
buffer.<span style="mso-spacerun: yes;"> </span>In effect, the land donation
forces the City to renege on its only plan and not provide the needed buffer.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt 0.75in;">
<span style="font-family: Calibri;">The proposed plan seems to provide
only 800 parking spaces.<span style="mso-spacerun: yes;"> </span>This seems
prohibitively small if the parking is to support a 10,000 seat stadium.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt 0.75in;">
<i style="mso-bidi-font-style: normal;"><span style="font-family: Calibri;">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.<o:p></o:p></span></i></div>
<br />
<div class="MsoListParagraph" style="margin: 0in 0in 10pt 0.5in; mso-list: l1 level1 lfo2; text-indent: -0.25in;">
<span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;"><span style="font-family: Calibri;">9.</span><span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";">
</span></span></span><span style="font-family: Calibri;">The commercial development cannot be supported
by the sports complex.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt 0.75in;">
<span style="font-family: Calibri;">The CS&L report projects
demand for hotel space at only 9,500 stays.<span style="mso-spacerun: yes;">
</span>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.<span style="mso-spacerun: yes;"> </span><i style="mso-bidi-font-style: normal;">The City is investing millions of taxpayers
dollars in two hotel projects, one downtown and on closed to the KU
campus.<span style="mso-spacerun: yes;"> </span>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.<o:p></o:p></i></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt 0.75in;">
<span style="font-family: Calibri;">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.<span style="mso-spacerun: yes;">
</span>The report projects that only 1 in 5 attendees will stay for the
night.<span style="mso-spacerun: yes;"> </span>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).<span style="mso-spacerun: yes;"> </span>This level of spending would support, at
most, a few fast food restaurants.<span style="mso-spacerun: yes;"> </span>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.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt 0.75in;">
<i style="mso-bidi-font-style: normal;"><span style="font-family: Calibri;">As is so often the case, developers exaggerate the demand for
commercial, especially retail space.<span style="mso-spacerun: yes;"> </span>The
City only does harm to its existing retail districts by allowing outlying new
districts to be built.<span style="mso-spacerun: yes;"> </span>The City should
rethink the viability of any associated commercial space associated with this
project.<o:p></o:p></span></i></div>
<br />
<div class="MsoListParagraph" style="margin: 0in 0in 10pt 0.5in; mso-list: l1 level1 lfo2; text-indent: -0.25in;">
<span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;"><span style="font-family: Calibri;">10.</span><span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";">
</span></span></span><span style="font-family: Calibri;">An alternative exists.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt 0.75in;">
<span style="font-family: Calibri;">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.<span style="mso-spacerun: yes;"> </span>A recreation center built near these existing
facilities could serve the citizens needs and attract some level of tournaments
with their ensuing economic benefits.<span style="mso-spacerun: yes;">
</span>This alternative site would not require any major new infrastructure;
the site already has the necessary services.<span style="mso-spacerun: yes;">
</span>The location would develop its own synergy through coordination of
events with the facilities at the High School.<span style="mso-spacerun: yes;">
</span><i style="mso-bidi-font-style: normal;">The City should carefully examine
the relative costs, benefits and risks of this alternative.<span style="mso-spacerun: yes;"> </span>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.<o:p></o:p></i></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<br /></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<b style="mso-bidi-font-weight: normal;"><i style="mso-bidi-font-style: normal;"><span style="font-family: Calibri;">It appears that the pros for the proposed sports complex do not
outweigh the cons.<span style="mso-spacerun: yes;"> </span>The City should
sharpen its pencils and study the alternatives more closely.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></i></b></div>Kirk McClurehttp://www.blogger.com/profile/05289172523302036414noreply@blogger.com0tag:blogger.com,1999:blog-34311931.post-53706496140212781232012-08-01T13:49:00.000-07:002012-08-01T13:49:06.303-07:00Where are the studies that are needed before we make such huge investments?<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<b style="mso-bidi-font-weight: normal;"><i style="mso-bidi-font-style: normal;"><span style="font-family: Calibri;">Where are the studies that are needed before we make such huge
investments?<o:p></o:p></span></i></b></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<br /></div>
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">The City Commission is rapidly moving ahead with a $12
million subsidy package for the apartment and hotel developments at 9<sup><span style="font-size: x-small;">th</span></sup>
and New Hampshire Streets.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">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.<span style="mso-spacerun: yes;"> </span>Lawrence has not done
this.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">These studies should include:<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;"><span style="mso-tab-count: 1;"> </span>Market
Analysis<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;"><span style="mso-tab-count: 1;"> </span>Cost-Benefit
Analysis<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;"><span style="mso-tab-count: 1;"> </span>Feasibility
Analysis<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<br /></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<i style="mso-bidi-font-style: normal;"><span style="font-family: Calibri;">Market Analysis<o:p></o:p></span></i></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">The market analysis answers the question, “does Lawrence
need these new developments?”<span style="mso-spacerun: yes;"> </span>If the
city does not need the development, the project will, if built, simply cannibalize
demand away from existing properties.<span style="mso-spacerun: yes;"> </span>The
effects of cannibalization can be minor to catastrophic.<span style="mso-spacerun: yes;"> </span>Lawrence invested heavily in the Oread
Hotel.<span style="mso-spacerun: yes;"> </span>The downtown depends upon the
success of the historic Eldridge Hotel.<span style="mso-spacerun: yes;">
</span>It is unwise to foster development of another hotel that could hurt
these two hotels.<span style="mso-spacerun: yes;"> </span>It is foolish in the
extreme to subsidize the development of another hotel that could hurt these two
hotels.<span style="mso-spacerun: yes;"> </span>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.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">A market analysis should have preceded any consideration of
TIF or any other subsidy, but a market analysis was not prepared.<span style="mso-spacerun: yes;"> </span>Casual observation suggests that the market
is not right for this development, especially with heavy taxpayer subsidy.<span style="mso-spacerun: yes;"> </span>Developers are building apartments faster
than population growth among renters, thus there seems to be no need for more
apartment buildings now.<span style="mso-spacerun: yes;"> </span>Hotels seem to
be struggling rather than bustling, thus there seems to be no need for more
hotel rooms now.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">There may be little or no new market for this project; it
may only cannibalize existing markets.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<br /></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;"><i style="mso-bidi-font-style: normal;">Cost-Benefit Analysis</i><o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">Cost-benefit analysis answers the question, “does the
present value of all future costs and benefits exceed the present value of all
current costs?”<span style="mso-spacerun: yes;"> </span>If the benefits do not
substantially exceed costs, then the City should not invest scarce taxpayer dollars
in these ventures.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">A cost-benefit analysis should have preceded any
consideration of TIF financing or any other subsidy, but a cost-benefit
analysis was not prepared,<span style="mso-spacerun: yes;"> </span>Again, casual
observations suggests that the taxpayers will not get a good return on their
investment.<span style="mso-spacerun: yes;"> </span>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.<span style="mso-spacerun: yes;"> </span>That leaves $10.7 million to be covered.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">It takes Herculean assumptions on benefits to cover the
remaining $10.7 million in costs.<span style="mso-spacerun: yes;"> </span>We
cannot look to any taxes on either the apartment or the hotel; they have all
been given back to the developers.<span style="mso-spacerun: yes;">
</span>Apartment buildings do not create many jobs, but hotels do.<span style="mso-spacerun: yes;"> </span>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.<span style="mso-spacerun: yes;"> </span>The hotel will simply cannibalize
jobs from other hotels just as it will cannibalize customers.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">The expected benefits from this project may be less, even
substantially less, than the costs.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<br /></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;"><i style="mso-bidi-font-style: normal;">Feasibility Analysis</i><o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">Feasibility analysis answers the question, “will the project
be financially feasible only with the subsidy?”<span style="mso-spacerun: yes;">
</span>It turns out that the City did engage a private consultant to conduct such
a study.<span style="mso-spacerun: yes;"> </span>Such studies generally
conclude: first, that the project is not feasible without the subsidy; and
second, the project is feasible with the subsidy.<span style="mso-spacerun: yes;"> </span>Ironically, the feasibility analysis said
that the project is NOT feasible with or without the subsidy.<span style="mso-spacerun: yes;"> </span>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.<span style="mso-spacerun: yes;"> </span>Our City Commission ignored this message and
went ahead with the subsidy.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">The City has chosen to invest $12 million taxpayer dollars
in project about which it knows little.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<br /></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">Our City Commission is guilty of being overly eager to cut
ribbons.<span style="mso-spacerun: yes;"> </span>This is not unusual among
politicians, but it is scary.<span style="mso-spacerun: yes;"> </span>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.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<br /></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">The necessary studies are missing or are being ignored.<span style="mso-spacerun: yes;"> </span>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.<span style="mso-spacerun: yes;"> </span>City Commissioners are not trained in the
intricacies of Tax Increment Financing or benefit-cost analysis or market
analysis.<span style="mso-spacerun: yes;"> </span>City staff members are
appropriately trained.<span style="mso-spacerun: yes;"> </span>The taxpayers
have a right to expect more from our staff.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<br /></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">Hold on to your wallets; this same system is about to make
an even larger decision on a sports complex.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<br /></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<br /></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<br /></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<br /></div>Kirk McClurehttp://www.blogger.com/profile/05289172523302036414noreply@blogger.com0tag:blogger.com,1999:blog-34311931.post-11700285062777416552012-06-24T14:17:00.004-07:002012-06-25T14:19:18.707-07:00What does the 9th and New Hampshire proposal teach us about out development controls?<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<b style="mso-bidi-font-weight: normal;"><span style="font-size: small;"><span style="font-family: Calibri;">What does
the 9<sup>th</sup> and New Hampshire proposal teach us about our development
controls?<o:p></o:p></span></span></b></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<br />
<span style="font-size: small;"><span style="font-family: Calibri;">Lawrence lacks proper development controls.<span style="mso-spacerun: yes;"> </span>The absence of proper controls prevents the
City from reviewing major projects and allows developers to dictate the pace of
growth.<span style="mso-spacerun: yes;"> </span>This is a
mistake.<o:p></o:p></span></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt 0.5in; text-indent: -0.5in;">
<span style="font-size: small;"><span style="font-family: Calibri;">The problems with the 9<sup>th</sup> and New Hampshire
proposal are a text book example of failed
planning.<o:p></o:p></span></span></div>
<br />
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt 0.5in; text-indent: -0.5in;">
<i style="mso-bidi-font-style: normal;"><span style="font-size: small;"><span style="font-family: Calibri;">Quick
history:<o:p></o:p></span></span></i></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-size: small;"><span style="font-family: Calibri;">The City approved zoning on the 900 block of New Hampshire for the
Downtown 2000 project.<span style="mso-spacerun: yes;"> </span>The Downtown 2000
project failed.<span style="mso-spacerun: yes;"> </span>It was supposed to pay
for one-half of the New Hampshire Street parking garage.<span style="mso-spacerun: yes;"> </span>When the project failed, the taxpayers had to
pick up the tab for the garage.<o:p></o:p></span></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-size: small;"><span style="font-family: Calibri;">Despite the failure of the project, the zoning lives on at the
site.<span style="mso-spacerun: yes;"> </span>This permits the developer to
proceed with a hotel without normal planning review.<span style="mso-spacerun: yes;"> </span>If the developer wants to build a 3-story
hotel and does not want subsidy, it can be built without planning review.<span style="mso-spacerun: yes;"> </span>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.<span style="mso-spacerun: yes;">
</span><o:p></o:p></span></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-size: small;"><span style="font-family: Calibri;">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.<span style="mso-spacerun: yes;">
</span><span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<i style="mso-bidi-font-style: normal;"><o:p><span style="font-family: Calibri; font-size: small;"> </span></o:p></i></div>
<i style="mso-bidi-font-style: normal;"><span style="font-size: small;"><span style="font-family: Calibri;">The process
going forward:<o:p></o:p></span></span></i><br />
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-size: small;"><span style="font-family: Calibri;">The City Commission will hear an appeal of the decision of the
HRC.<span style="mso-spacerun: yes;"> </span>The scope of the City Commission’s
review is narrow.<span style="mso-spacerun: yes;"> </span>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.<span style="mso-spacerun: yes;"> </span>In this setting, feasibility means that a
development will earn enough cash flow to attract investors.<span style="mso-spacerun: yes;"> </span>Generally, this cash flow has to return about
10 percent annually over a period of 10 years.<span style="mso-spacerun: yes;">
</span></span></span><span style="font-size: small;"><span style="font-family: Calibri;">There is little question that feasible alternatives exist.<span style="mso-spacerun: yes;"> </span>Three-story projects are feasible if no
parking garage is included. Town Peterson demonstrates this in his submission to
the City Commission.<span style="mso-spacerun: yes;"> </span>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.<o:p></o:p></span></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-size: small;"><span style="font-family: Calibri;">The City Commission cannot, in good conscience, find that no
feasible alternative exists under current zoning.<span style="mso-spacerun: yes;"> </span>It is clear that a three-story retail/office
facility will generate a competitive return on
investment.<o:p></o:p></span></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-size: small;"><span style="font-family: Calibri;">To the developer, the problem is not the percentage return on
investment with a three-story project; it is the dollar amount of profit.<span style="mso-spacerun: yes;"> </span>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.<o:p></o:p></span></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt 0.5in; text-indent: -0.5in;">
<o:p><span style="font-family: Calibri; font-size: small;"> </span></o:p></div>
<i style="mso-bidi-font-style: normal;"><span style="font-size: small;"><span style="font-family: Calibri;">How did
Lawrence get into this problem?<span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></i><br />
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-size: small;"><span style="font-family: Calibri;">Lawrence is in this problem because of a lack of proper development
controls.<span style="mso-spacerun: yes;"> </span>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.<o:p></o:p></span></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-size: small;"><span style="font-family: Calibri;">Some version of the proposal at 9<sup>th</sup> 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.<span style="mso-spacerun: yes;"> </span>But we will never know under
the current development controls because there is no opportunity to debate the
project.<span style="mso-spacerun: yes;"> </span>There is constrained review of
its impact on adjacent historic properties, but the HRC review is not supposed
to go beyond this narrow issue.<span style="mso-spacerun: yes;"> </span>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.<o:p></o:p></span></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-size: small;"><span style="font-family: Calibri;">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.<o:p></o:p></span></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt 0.5in; text-indent: -0.5in;">
<o:p><span style="font-family: Calibri; font-size: small;"> </span></o:p></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt 0.5in; text-indent: -0.5in;">
<i style="mso-bidi-font-style: normal;"><span style="font-size: small;"><span style="font-family: Calibri;">What should
be done about this problem?<o:p></o:p></span></span></i></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-size: small;"><span style="font-family: Calibri;">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.<o:p></o:p></span></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-size: small;"><span style="font-family: Calibri;">Zoning dictates the height bulk and use of a project.<span style="mso-spacerun: yes;"> </span>Clearly our zoning does not do this
well.<span style="mso-spacerun: yes;"> </span>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.<span style="mso-spacerun: yes;"> </span>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.<o:p></o:p></span></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-size: small;"><span style="font-family: Calibri;">Lawrence needs a set of development controls that allow it to set
the pace of growth.<span style="mso-spacerun: yes;"> </span>In this, the City is
woefully lacking.<span style="mso-spacerun: yes;"> </span>The City’s development
controls assume that once zoned, the private market knows best how to time
development.<span style="mso-spacerun: yes;"> </span>We are now in the fifth
year of a real estate driven recession because of the error of this
assumption.<span style="mso-spacerun: yes;"> </span>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.<o:p></o:p></span></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-size: small;"><span style="font-family: Calibri;">Lawrence is paying the price for letting the development community
dictate the pace of growth.<o:p></o:p></span></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-size: small;"><span style="font-family: Calibri;">Lawrence’s retail space grew faster than retail spending.<span style="mso-spacerun: yes;"> </span>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.<span style="mso-spacerun: yes;"> </span>The surplus
resulted in chronic vacancies downtown, along 23<sup>rd</sup> Street and in
various neighborhood centers.<span style="mso-spacerun: yes;"> </span>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.<span style="mso-spacerun: yes;"> </span>Yet the City continues to
approve more retail space as if the problem does not
exist.<o:p></o:p></span></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-size: small;"><span style="font-family: Calibri;">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.<span style="mso-spacerun: yes;"> </span>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.<o:p></o:p></span></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-size: small;"><span style="font-family: Calibri;">Now the City is confronting a similar problem with its hotels.<span style="mso-spacerun: yes;"> </span>The taxpayers invested $11 million in the
Oread Hotel.<span style="mso-spacerun: yes;"> </span>The City has an interest in
the Eldridge Hotel surviving because it uniquely defines our historic
downtown.<span style="mso-spacerun: yes;"> </span>Recently the City approved
zoning for a hotel as part of the North Mass Development.<span style="mso-spacerun: yes;"> </span>The City is rezoning property at
6<sup>th</sup> Street and the South Lawrence Trafficway for a sports complex
with a retail shopping center and a hotel.<span style="mso-spacerun: yes;">
</span>As if all of this is not enough, the developers of 9<sup>th</sup> and New
Hampshire propose yet another hotel.<o:p></o:p></span></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-size: small;"><span style="font-family: Calibri;">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.<o:p></o:p></span></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-size: small;"><span style="font-family: Calibri;">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.<span style="mso-spacerun: yes;"> </span>Even if
this was known, the City does not have the power to control the pace at which
space is added.<span style="mso-spacerun: yes;"> </span>Once zoned, the
developers control the pace of development, even if that pace is harmful to City
investments and City interests. <o:p></o:p></span></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt 0.5in; text-indent: -0.5in;">
<o:p><span style="font-family: Calibri; font-size: small;"> </span></o:p></div>
<i style="mso-bidi-font-style: normal;"><span style="font-size: small;"><span style="font-family: Calibri;">What should
the development controls include?<o:p></o:p></span></span></i><br />
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-size: small;"><span style="font-family: Calibri;"><i style="mso-bidi-font-style: normal;">Market Analysis: </i>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.<o:p></o:p></span></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-size: small;"><span style="font-family: Calibri;"><i style="mso-bidi-font-style: normal;">Growth Management: </i>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.<span style="mso-spacerun: yes;"> </span>If
we learn nothing else from the crash of 2008, we should learn that the real
estate industry does not pace itself well.<span style="mso-spacerun: yes;">
</span>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.<o:p></o:p></span></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-size: small;"><span style="font-family: Calibri;"><i style="mso-bidi-font-style: normal;">Benefit-Cost Analysis:
</i>The City’s development controls should examine the benefits and costs of
each significant development.<span style="mso-spacerun: yes;"> </span>For too
long, we have assumed that each project, if properly zoned, is good for the
community.<span style="mso-spacerun: yes;"> </span>This assumption is
wrong.<span style="mso-spacerun: yes;"> </span>Many new projects serve only to
pull demand away from other, usually older, neighborhoods and shopping districts
creating depressed values and disinvestment.<span style="mso-spacerun: yes;">
</span>The City needs to better understand the implications of each new
development upon existing properties.<span style="mso-spacerun: yes;">
</span>Often the benefits of the new development do not justify the costs to the
older neighborhoods.<o:p></o:p></span></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-size: small;"><span style="font-family: Calibri;"><i style="mso-bidi-font-style: normal;">Feasibility and Efficiency
Analysis: </i>The City’s development controls should examine project feasibility
where subsidies are requested.<span style="mso-spacerun: yes;"> </span>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.<span style="mso-spacerun: yes;"> </span>Full feasibility analysis should examine
whether other, less costly, alternatives will serve the City’s needs
adequately.<span style="mso-spacerun: yes;"> </span>We should not give the
presumption of validity to the developer’s proposals.<span style="mso-spacerun: yes;"> </span>Often an alternative proposal, including
doing nothing, will serve the community’s interests better.<span style="mso-spacerun: yes;"> </span>Searching for this better alternative needs
to become a part of the development process.</span></span></div>
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<br /></div>Kirk McClurehttp://www.blogger.com/profile/05289172523302036414noreply@blogger.com0tag:blogger.com,1999:blog-34311931.post-85613099621930566822012-06-19T10:08:00.001-07:002012-06-19T10:08:19.929-07:00Is the revised Joint Economic Development Council all that it could be?<div class="MsoNormal" style="margin: 0in 0in 10pt;"><span style="color: black; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-themecolor: text1;"><span style="font-family: Calibri;">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?</span></span></div><div class="MsoNormal" style="margin: 0in 0in 10pt;"><span style="color: black; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-themecolor: text1;"><span style="font-family: Calibri;">The answer is no.</span></span></div><div class="MsoNormal" style="margin: 0in 0in 10pt;"><br />
</div><div class="MsoNormal" style="margin: 0in 0in 10pt;"><span style="font-family: Calibri;"><i style="mso-bidi-font-style: normal;"><span style="color: black; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-themecolor: text1;">Representation</span></i><span style="color: black; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-themecolor: text1;"><o:p></o:p></span></span></div><br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;"><span style="color: black; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-themecolor: text1;"><span style="font-family: Calibri;">The proposed Council now includes four community representatives to counter the five Chamber of Commerce representatives.<span style="mso-spacerun: yes;"> </span>This falls short of equal representation which would enhance the standing of this body.<span style="mso-spacerun: yes;"> </span>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.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></div><br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;"><span style="color: black; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-themecolor: text1;"><span style="font-family: Calibri;">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.<span style="mso-spacerun: yes;"> </span>Thus, there is nothing to prevent a pro-Chamber City Commission or County Commission from appointing additional pro-Chamber individuals to these positions.<o:p></o:p></span></span></div><br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;"><span style="color: black; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-themecolor: text1;"><span style="font-family: Calibri;">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.<span style="mso-spacerun: yes;"> </span>As revised, the Council falls short.<o:p></o:p></span></span></div><br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;"><br />
</div><br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;"><i style="mso-bidi-font-style: normal;"><span style="color: black; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-themecolor: text1;"><span style="font-family: Calibri;">Professionalism<o:p></o:p></span></span></i></div><br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt;"><span style="font-family: Calibri;">Local economic development planning is complex and requires professional expertise.<span style="mso-spacerun: yes;"> </span>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.<span style="mso-spacerun: yes;"> </span>Too many cities, implement economic development strategies by following advocacy and ideology rather than following research based professional guidance.<o:p></o:p></span></div><br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt;"><br />
</div><br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt;"><span style="font-family: Calibri;">The City and the County continue to give over $400,000 per year to the Chamber of Commerce and get too little in return.<span style="mso-spacerun: yes;"> </span>The Chamber is a business advocacy organization.<span style="mso-spacerun: yes;"> </span>Advocacy has its place, but it is not the way to succeed in local economic development planning.<span style="mso-spacerun: yes;"> </span>The record of the City in its failed economic development programs is testament to the inherent flaws in following advocacy.<o:p></o:p></span></div><br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt;"><br />
</div><br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt;"><span style="font-family: Calibri;">Professionalism is the path to successful local economic development planning.<span style="mso-spacerun: yes;"> </span>At the moment, the City is staffed by a single profession economic development coordinator.<span style="mso-spacerun: yes;"> </span>Creating this position was a step in the right direction, but it was only a good first step.<span style="mso-spacerun: yes;"> </span>More professional planners are needed.<o:p></o:p></span></div><br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt;"><br />
</div><br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt;"><span style="font-family: Calibri;">Currently, the community is confronting many issues that require the input of these planners.<span style="mso-spacerun: yes;"> </span>These questions include:<span style="mso-spacerun: yes;"> </span>Can the city absorb all of the additional hotel rooms that are proposed downtown?<span style="mso-spacerun: yes;"> </span>Can the city absorb the additional retail space proposed as part of the sports complex?<span style="mso-spacerun: yes;"> </span>Can the city attract enough events to make such a sports complex viable?<span style="mso-spacerun: yes;"> </span>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?<o:p></o:p></span></div><br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt;"><br />
</div><br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt;"><span style="font-family: Calibri;">Additional professional local economic development planners could provide the guidance and instruction that an advisory board, such as the Joint Economic Development Council, needs.<span style="mso-spacerun: yes;"> </span>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.<span style="mso-spacerun: yes;"> </span>Advocates paid by the Chamber of Commerce cannot provide the full truth; they must adhere to the ideology of their employer.<span style="mso-spacerun: yes;"> </span>Professional planners who report to the City and County Commissions can provide this evidence driven expertise.<o:p></o:p></span></div><br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt;"><br />
</div><br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt;"><br />
</div><br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt;"><span style="font-family: Calibri;"><i style="mso-bidi-font-style: normal;">Recommendation</i><o:p></o:p></span></div><br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt;"><br />
</div><br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt;"><span style="font-family: Calibri;">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.<o:p></o:p></span></div><br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt;"><br />
</div><br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt;"><span style="font-family: Calibri;">Bring economic development planning inside City Hall and inside the County Court House.<span style="mso-spacerun: yes;"> </span>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.<o:p></o:p></span></div><br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt;"><br />
</div>Kirk McClurehttp://www.blogger.com/profile/05289172523302036414noreply@blogger.com0tag:blogger.com,1999:blog-34311931.post-86615681881563095952012-06-07T08:41:00.001-07:002012-06-07T08:41:14.830-07:00How do we select a sports complex in Northwest Lawrence?<strong>Deciding on a Sports Complex in Northwest Lawrence</strong><br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<br /></div>
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">The Lawrence Parks and Recreation Advisory Board held a public session to exchange ideas
about the proposed sports complex.<span style="mso-spacerun: yes;"> Here a a couple of recommendations on how to proceed</span>.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;"><i style="mso-bidi-font-style: normal;">Compared to what?</i><o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">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.<span style="mso-spacerun: yes;"> </span>This is an overly stark and unfair
characterization of the choices.<span style="mso-spacerun: yes;"> </span>What
the taxpayers and the City Commission need is a better representation of the
choices.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">A more correct representation of the choices would be:<o:p></o:p></span></div>
<br />
<div class="MsoListParagraphCxSpFirst" style="margin: 0in 0in 0pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;">
<span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;"><span style="font-family: Calibri;">1.</span><span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";">
</span></span></span><span style="font-family: Calibri;"><span style="mso-spacerun: yes;"> </span>A 50 acre,
8 basketball/volleyball court complex in partnership with the KU Athletic
Association with a soccer field and a track field.<span style="mso-spacerun: yes;"> </span>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.<span style="mso-spacerun: yes;"> </span>This alternative requires a large investment
in infrastructure, but it has the potential to attract tournaments and events
to Lawrence.<o:p></o:p></span></div>
<br />
<div class="MsoListParagraphCxSpLast" style="margin: 0in 0in 10pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;">
<span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;"><span style="font-family: Calibri;">2.</span><span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";">
</span></span></span><span style="font-family: Calibri;">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.<span style="mso-spacerun: yes;"> </span>The zoning and preliminary plans
for this complex are available.<span style="mso-spacerun: yes;"> </span>This alternative
does not involve increasing the retail stock, which is now overbuilt.<span style="mso-spacerun: yes;"> </span>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.<span style="mso-spacerun: yes;"> </span>This alternative also has the
potential to attract tournaments and events to Lawrence.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">Recommendation:<span style="mso-spacerun: yes;"> </span>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.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;"><i style="mso-bidi-font-style: normal;">Where is the Market
Analysis?</i><o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">I have yet to hear of any professional market analysis
conducted to guide the decision makers.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">The presentation on the Frisco, Texas complex was
interesting, but potentially misleading.<span style="mso-spacerun: yes;">
</span>Frisco is bigger, richer city that sits within a much, much larger
metroplex.<span style="mso-spacerun: yes;"> </span>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.<span style="mso-spacerun: yes;">
</span>Knowing the scale of sustainable investment takes skill.<span style="mso-spacerun: yes;"> </span>This skill has in short supply in Lawrence,
and we are paying the price.<span style="mso-spacerun: yes;"> </span>The
Riverfront Mall was a failure, and the taxpayers continue to pay the price of
the failed project and its parking garage.<span style="mso-spacerun: yes;">
</span>The Downtown 2000 project was a failure, and the taxpayers continue to
pay the price of the failed project and its parking garage.<span style="mso-spacerun: yes;"> </span>These mistakes were made because the City
moved forward with projects that were inadequately researched.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">I had occasion to be in Gainesville, Florida last week.<span style="mso-spacerun: yes;"> </span>Takeaway the alligators and the Spanish moss
hanging from the trees, and Gainesville is much like Lawrence.<span style="mso-spacerun: yes;"> </span>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.<span style="mso-spacerun: yes;"> </span>The
project is relatively new and construction delays occurred, but the sports
complex had not attracted the tournaments projected for it.<span style="mso-spacerun: yes;"> </span>This complex may recover and perform well in
the future, but the experience of Gainesville is instructive.<span style="mso-spacerun: yes;"> </span>It teaches us to be realistic about our
capacity to attract tournaments.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">It is fine to dream big, but when we invest, we should make
sure that we invest wisely.<span style="mso-spacerun: yes;"> </span>If we invest
too big, hoping to realize our dreams, we may lose big.<span style="mso-spacerun: yes;"> </span>If we invest based upon realistic
expectations, we may have a better chance of realizing sustainable return on
our investment.<span style="mso-spacerun: yes;"> </span>We do not want an
investigative article in a future issue of the <i style="mso-bidi-font-style: normal;">Lawrence Journal World</i> to report on the disappointing performance
of the new sports complex to attract visitors, straddling the taxpayers with
another poorly performing investment.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">Recommendation:<span style="mso-spacerun: yes;">
</span>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.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<br /></div>Kirk McClurehttp://www.blogger.com/profile/05289172523302036414noreply@blogger.com0tag:blogger.com,1999:blog-34311931.post-21711509347271501182009-11-10T07:44:00.000-08:002009-11-10T13:00:23.369-08:00Should the City Purchase 4950 Research Parkway?<span style="font-family:arial;"><em>A number of issues should be resolved as the City of Lawrence, Kansas considers the purchase and operation of the builiding at 4950 Research Parkway.<br /></em><br /><br /><strong>Background</strong><br /><br />The Lawrence Douglas County Biosciences Authority (LDCBA) proposes that the city purchase the property at 4050 Research Parkway for $2,900,000.<br /><br />This purchase would be financed through issuing general obligation bonds.<br /><br />LDCBA would operate as the property manager and leasing agent. The property would be leased, in part, to the firm CritiTech. Other firms would be sought to lease the remainder of the building.<br /><br />The financial projections for the property anticipate that it would not generate sufficient income to cover the costs of operation and that the taxpayers of Lawrence and Douglas County would subsidize the property to cover the losses.<br /><br /><br /><strong>Issues<br /></strong><br /><em>1. Purchase price</em><br /><br />The proposed purchase price is $2,900,000. The financial projections for the property show the property generating a net operating income of about $12 per square foot. It also assumes a capitalization rate (net operating income / property value) of about 6 percent which is too low. Capitalization rates should reflect the cost of borrowing, the return on equity invested in such properties, and the risk associated with this type of space. This suggests a capitalization rate of 8 percent or higher. With a capitalization rate of 8 percent, the purchase price of the property should be $2,300,000, and this assumes that the building can maintain 89 percent occupancy. If the occupancy falls to a lower level, the value of the property will be lower, possibly much lower.<br /><em><br />2. Identity of interest between the seller and the tenant</em><br /><br />The purchase price becomes immediately suspect because one of the current owners of the property is a principal in the CritiTech firm which is to be a subsidized occupant of the property. The sellers have an interest in obtaining as high a price as possible for the property, even a price higher than it can command in the private market. CritiTech as an occupant has an interest in leasing the space at a low lease rate, even a rate that is below the market rate because it is subsidized. With no arm’s length separation between the seller and the tenant, the taxpayer cannot trust either the purchase price or the lease rate.<br /><br />This suggests that the city should closely investigate the calculations of the purchase price and lease rates to ensure that the taxpayers are not being asked to provide more subsidies than are necessary.<br /><br /><br /><em>3. Form of financing</em><br /><br />The proposal is for the city to issue general obligation bonds to finance the purchase of the property. This obligates the city to cover all principal and interest payments on the debt if the property does not generate sufficient income.<br /><br />It is more common for projects of this type to be financed with revenue bonds. With revenue bonds, the city promises only the revenues from the project for payment of the debt. Revenue bonds insulate the taxpayers from a heavy financial burden if the project fails.<br /><br />This is a highly risky project. This risk will raise the interest rate on revenue bond debt, if the debt can be issued at all. If the project is too risky to be financed with revenue bonds, it suggests that the project is too risky for to be undertaken.<br /><br />If the city wants to purchase this property, the city needs to explore financing mechanisms that minimize the risk absorbed by the taxpayers.<br /><br /><br /><em>4. Projected occupancy<br /></em><br />The financial projection for the property assumes that the project will achieve 89 percent occupancy after 4 years and will maintain that level of occupancy for the remaining 21 years of the bond financing.<br /><br />This is an eleven year old property with a checkered history. The property’s occupancy levels over its life need to be detailed. It seems highly unlikely that this property will suddenly transform from a poor performing property to a fully occupied property and remain fully occupied for over two decades.<br /><br />The city should closely examine the occupancy history of the property and should examine the market for such laboratory space. The market is saturated with facilities being offered to bioscience firms. It is unlikely that this property will attract firms from outside of Lawrence; all of the firms are likely to come from spin-offs of KU.<br /><br />A compelling case needs to be made that KU will produce sufficient firms to maintain 89 percent occupancy in this property for over two decades, despite the fact that KU has not produced these firms in the past.<br /><br /><br /><em>5. Property taxes</em><br /><br />The LDCBA proposal states that the property will remain a taxable property. This is not correct. If the city is to own the property, it is not a taxable property. Under some circumstances, a tenant could be charged a lease rate that is high enough to cover the debt on the property and an amount that would be paid in property taxes had the property been taxable. This is usually referred to as a payment in lieu of taxes or PILOT.<br /><br />The financial projection for the property shows a PILOT, but it also shows that the project will not generate sufficient revenue to cover its own costs. The losses are covered by the taxpayers.<br /><br />It is disingenuous to claim that the property is on the tax rolls when it is publicly owned and will generate losses that must be covered by the taxpayers.<br /><br />The proposal should not mislead the taxpayers into thinking that this property will be anything other than a subsidized property.<br /><br /><br /><br /><strong>Recommendation<br /></strong><br />There is nothing wrong with the city exploring mechanisms to foster economic development in the biosciences. However, the city should exercise caution so as to not expose the taxpayers to unnecessary risk or unjustifiable costs.<br /><br />This proposal merits further exploration, but there are many flaws and misrepresentations in the proposal. It can be seen as a starting point rather than an ending point. The city should negotiate for a better agreement. It is possible that a better agreement can be found that is mutually acceptable to all parties. The current proposal appears to be prohibitively flawed.<br /><br />The City Commission should direct staff to study this property more closely and determine whether a feasible financial package can be constructed with minimal risk to the taxpayers.<br /></span>Kirk McClurehttp://www.blogger.com/profile/05289172523302036414noreply@blogger.com1tag:blogger.com,1999:blog-34311931.post-5049482774553331582009-10-27T08:38:00.000-07:002009-10-28T07:46:16.659-07:00What are reasonable expectations for local economic development?<span style="font-family:arial;font-size:85%;"><em>What is economic development?</em><br /><br />It is important to understand the definition of economic development. Economic development is expanding the total income of a community. Expanding the total income means attracting dollars into the community from outside the community. This can be through attracting tourists or new retirees, attracting new customers who live outside of the community to businesses already in the community, attracting new businesses to the community that sell their products or services outside of the community, or any action that raises the wages of the labor force by bringing dollars into the community.<br /><br />The most essential ingredient for successful economic development is the maintenance and development of a high quality of living in the community. This means making the community a place where people what to live, where workers are well educated, and where firms want to do business.<br /><br /><em>Necessary ingredients for successful economic development<br /></em><br /><strong>Labor</strong><br /><br />A community must have a appropriately trained labor force. Warehousing requires little or no training. Manufacturing usually requires a well-trained labor force. Professional services can require a highly educated labor force. Lawrence generally enjoys a highly educated labor force. In the U.S. 16% of adults did not complete high school; in Lawrence only 4% did not complete high school. In the U.S. 25% of adults have a college degree; in Lawrence it is 35%. We need to seek employment opportunities that match the composition of the labor force.<br /><br />A community has to have the right quantity and quality of labor available. If the labor force is too small or not available, then the community will not be attractive. This is usually not a big problem as most new firms are looking for only a small number of employees. Douglas County contains 47,000 workers; most new firms will add fewer than 100 employees.<br /><br />The labor in a community has to be competitively priced. Unfortunately, Lawrence excels in this dimension. Wages in Lawrence are low in virtually all occupations. Thus, wages are not held down by student labor; wages are low across the board. This makes Lawrence attractive to firms, but sadly it is making Lawrence unattractive to workers.<br /><br /><strong>Land<br /></strong><br />A community needs to have an adequate supply of appropriately serviced land available. Adequate means the right amount, not too much and not too little. Too often communities are led into preparing large quantities of land that only sits idle. It is unwise to develop more land than can be reasonable absorbed within a decade.<br /><br />No self-contained community like Lawrence is going to attract an extremely large employer needing a very large site. Virtually all of the firms moving into Lawrence over the last two decades developed on parcels of 25 acres, more or less. While new land for future employment centers may be needed, it is doubtful that the number of acres needed cannot be accommodated by existing sites and by the Farmland Industries site. Remember that the University of Kansas remains the largest employer, and it has provided for its own growth. The community only needs to provide for the non-University growth.<br /><br /><strong>Loans</strong><br /><br />A community is often called upon to provide financing for business expansion and development. As long as this is done in a way that minimizes or eliminates the risk to the taxpayers, this can be a successful tool to facilitate economic development.<br /><br />Public sector loans can subsidize a development, but they cannot create demand for the product or service to be produced. It is important to remember that subsidized financing can help a good investment succeed, but it will not turn a risky investment into a safe one. Cautious underwriting is required.<br /><br /><br /><em>Many things do not work:</em><br /><br /><strong>Tax abatements</strong><br /><br />Property taxes comprise such a small portion of the operating expenses of manufacturing or research and development facilities that abatements cannot influence a successful firm’s location decision. Property tax abatements are a waste of scarce resources. They have failed in Lawrence, and they have failed elsewhere.<br /><br /><strong>Speculative development<br /></strong><br />Building structures on a speculative basis is highly risky. Too often they sit empty and only lose money. This has been the case in Lawrence.<br /><br />Equally, a community must avoid speculative provision of expensive infrastructure in the hope of attracting new development. Lawrence has often failed in this area as well.<br /><br /><strong>Free land</strong><br /><br />The price of land in the Midwest is sufficiently inexpensive that it does not influence the location decision of firms. Note that Abilene provides free land but has a low job growth rate while Johnson County charges high land prices and has a much higher job growth rate.<br /><br /><strong>Hasty planning<br /></strong><br />The amount of time it takes to plan and development a project in Lawrence is comparable to the time it takes in other communities. It is not true that Lawrence takes longer; this is a myth pushed by those who oppose careful planning. Good planning takes a reasonable amount of time in Lawrence, just like it does everywhere else.<br /><br /><br /><br /><em>Practical realities of economic development<br /></em><br />Thousands of communities across the nation are engaged in economic development, yet only a few hundred firms will build significant new facilities in any single year. This means that the job growth rate in Lawrence will be driven the natural expansion and contraction of existing firms and only rarely will a new firm be added to the mix.<br /><br />Manufacturing is declining in Lawrence as it is for the nation as a whole. While manufacturing jobs pay well, Lawrence is going to lose its share of these jobs, and the return of these jobs is not likely in the foreseeable future.<br /><br />Lawrence should avoid repeating the mistakes that it and other communities have made in the past in the false belief that these efforts improve the competitive position of the city in attracting tourists, new residents, and new businesses. Lawrence should continue to improve the quality of its work force, seek to raise the wage levels of the work force, and seek to make Lawrence a community where everyone wants to live.<br /></span>Kirk McClurehttp://www.blogger.com/profile/05289172523302036414noreply@blogger.com0tag:blogger.com,1999:blog-34311931.post-58774591580627507382009-02-28T14:14:00.000-08:002009-03-07T11:28:04.987-08:00Is it time to impose a long cooling off period on development?<span style="font-family:arial;"><strong>Watching the market work and fail to correct itself.</strong><br /><br />Too often our elected officials subscribe to the false notion that all construction is good. They adhere to the "build it and they will come" theory of real estate development. This theory falsely holds the new supply creates demand. One need only look around Lawrence to see the error in this type of thinking. We have empty homes, apartments, retail stores, and offices throughout the community. In fact, demand ebbs and flows; the supply that can be supported is not a function of what we build but of the amount of demand that exists in the community. <br /><br />The success of our real estate markets depends upon us keeping the supply in balance with the demand.<br /><br />Why is this? The development industry is not good at pacing itself; it is prone to overbuilding. When it overbuilds, the taxpayers suffer.<br /><br />We pay for the roads, utilities, plus police and fire protection for these excess developments. Example: Since 2000, the developers built over 3,200 home more homes than the population growth would support. The only good thing that you can say for the current credit market freeze is that it called a halt to the overbuilding spree.<br /><br />We also suffer from the blight created by the reduced value to the neighborhoods surrounding the empty space. Example: North Lawrence is hurt by the blighting effect of the dead Tanger Mall.<br /><br />We all lose directly through lost investment in redevelopment plans. Example: The empty $8 million parking garage in the 800 block of New Hampshire Street. The City built the garage on the promise that a developer would redevelop the surrounding area in mixed-use buildings. All that was built was the small building that contains PepperJax. The rest of the development was halted by the overbuilding that created too much competing space, mostly in the west side of town.<br /><br />We lose indirectly through the diminished efforts to redevelop our downtown. Examples: The Hobbs-Taylor Building is unable to attract retail tenants and the redeveloped 600 block of Massachusetts Street has vacancies. These two attractive developments should be the most valuable space in town. Unfortunately, the City has done its best to hurt these investments in our downtown by approving excessive amounts of competing retail space elsewhere, more space than the spending in Lawrence will support.<br /><br />Two quick facts show the pace of the overbuilding:<br /><br /><br />1. From 2000 through 2007, the builders built 800 homes per year when the population added only 400 households per year. Over and eight-year period, this was about 3,200 surplus homes.<br /><br />2. From 2000 through 2007, the builders built over 160,000 square feet of retail space per year when the growth in retail spending would support only 50,000 square feet per year.<br />This shows that the construction industry was vastly oversized, and we are now paying for it.<br />We need a City Commission that will keep the construction industry in check. It is not that hard to keep the pace of growth of housing in line with the growth of population. The City simply needs to plan for the pace of growth, approving only as many subdivisions as are really needed. It is not that hard to keep the pace of growth of retail space in line with the growth in retail spending. The City simply needs to pace the growth, approving only as many new shopping centers as the growth in retail spending will support.<br /></span><br /><span style="font-family:arial;">This has been made harder by the current City Commission’s excessive allegiance to developers. The City Commission has approved virtually every development approval brought before it when the market analysis told it that the city could not absorb all of the new space without harming existing developments. Because of this excessive amount of space both recently built and under construction, the city needs a long cooling off period.<br /></span><br /><span style="font-family:arial;">The economic recession is having some positive effect in that is it slowed down the building spree. However, recession is too crude a tool for this job. The City Commission should have managed the pace of growth in real estate, keeping it in line with the growth in demand for that real estate. Having failed to do that, we must now recognize that it will be a long time before we will need any significant additions to the supply. We have too many single-family homes. We have too many apartments. We have too many retail stores. We must wait for the demand to absorb this space before adding to this damaging oversupply. If we fail to impose a cooling off period, the development industry will only repeat its mistakes as soon as the recession bottoms out and credit markets thaw. <br /></span><br /><span style="font-family:arial;">We should learn from out mistakes and prevent future cycles of overbuilding. It is what good planning and good growth management is all about.<br /><br /><br /> </span>Kirk McClurehttp://www.blogger.com/profile/05289172523302036414noreply@blogger.com0tag:blogger.com,1999:blog-34311931.post-6653967911928099482008-12-11T20:54:00.000-08:002008-12-11T20:58:09.840-08:00What should citizens of Lawrence expect from its City Commission for the development of its housing stock?<span style="font-family:arial;font-size:85%;"><strong><em>What should citizens of Lawrence expect from its City Commission for the development of its housing stock?</em></strong></span><br /><span style="font-family:arial;font-size:85%;"></span><br /><span style="font-family:arial;font-size:85%;">The City Commission failed to reign in the excessive growth of the housing stock brought on by the developers. The taxpayers now pay the price for this excessive growth.<br /><br />In any community, it is the goal of a city to maintain balance between the demand for housing and the supply of housing. If the supply runs ahead of demand, values fall. If the supply runs ahead of demand for a long period of time, whole neighborhoods lose value and blight occurs. Older neighborhoods suffer especially hard. This is what has happened in Lawrence.<br /><br /><br /><em>Growth in the population is a good measure of growth in demand for housing <br /></em><br />In Lawrence:<br /><br />From1990 to 2000, the population grew:<br />· About 700 households per year,<br />· About 2.0 percent per year.<br /><br />From 2000 to 2007, the population grew more slowly at:<br />· About 400 households per year,<br />· About 1.7 percent per year.<br /><br /><em>Growth in the number of housing units is a good measure of growth in the supply of housing<br /><br /></em>In Lawrence:<br /><br />From 1990 to 2000, the housing stock grew:<br />· About 900 units per year,<br />· About 3.0 percent per year.<br /><br />Since 2000, the housing stock grew:<br />· About 800 units per year,<br />· About 2.1 percent per year.<br /><br /><em>Matching the growth of demand and the growth of supply<br /></em><br />In a well-planned market there should be a close correspondence between the growth in population and the growth in supply of housing. Developers have added units at a much greater rate than the growth in population:<br /><br />· During the 1990s, the growth of supply outpaced the growth of demand by 200 units per year.<br />· Since 2000, the growth of supply outpaced the growth of demand by 400 units per year.<br />· The surplus stock totals to about 5,000 units. This means that developers have built surplus units that are more than the size of Eudora, all within the city limits of Lawrence.<br /><br /><em>Implications:</em></span><br /><span style="font-family:arial;font-size:85%;"><br />· The surplus has brought about an out-migration from older neighborhoods, mostly in the eastern parts of the city, resulting in a loss of units.<br />· The loss of units resulted in a loss of value and deterioration in<br />the city’s older neighborhoods.<br /><br /><em>What should citizens of Lawrence expect from its City Commission?<br /></em><br />· In a growing community, there is no need for any neighborhood to suffer a loss of population, housing units, or property values.<br />· In a growing community, the City Commission and its planners should manage growth to keep the pace of growth of supply in balance with the growth in demand for that housing.<br />· The City Commission and its planners should direct sufficient investment into older neighborhoods so that they maintain value and attract new families.<br /><br /><br /></span><span style="font-family:arial;font-size:85%;"></span>Kirk McClurehttp://www.blogger.com/profile/05289172523302036414noreply@blogger.com0tag:blogger.com,1999:blog-34311931.post-63680636884133905072008-11-17T20:54:00.000-08:002008-11-18T19:42:49.217-08:00The Pace of GrowthThe national election is over; it is time to think ahead to the election of our next City Commission.<br /><br />The current City Commission has favored developers and builders to the point of harming the community. The City Commission confuses growth in the supply of real estate with economic development. It is easy to be confused because a coalition of developers, builders, and others engaged in the real estate development industry incorrectly equate growth in supply with growth in demand. This coalition also gives lots of money to the election campaigns of pro-developer candidates who will listen to this false claim and act upon it by approving virtually every development proposal.<br /><br />The truth is that economic development is the growth of the aggregate income within the community. This can be the result of increasing income among the existing population, usually from wages growing faster than inflation. This can also be the result of increasing the population itself with the new residents bringing new spending to the community.<br /><br />With growth in aggregate income in the community comes growth in demand for real estate. More households seek more housing. More income increases demand for retail goods and services.<br /><br />Without growth in aggregate income in the community, there is no growth in demand for real estate. More housing without more households simply causes neighborhoods to compete for a finite, and insufficient, number of households. More retail space without increased income simply spreads the finite amount of retail spending very thinly, with weaker shopping centers failing and becoming blighted.<br /><br />The community is in need of a City Commission that understands the most basic tenet of real estate economics, that real estate development must be supported by growth in demand for that real estate. If real estate is allowed to grow faster than growth in demand, the older space and the older neighborhoods lose value. Developers make money when they overbuild, but the community suffers. The City takes on the costs of new infrastructure that is not needed. Older neighborhoods lose value and deteriorate. Older shopping centers lose value and become blighted, reducing the value of surrounding neighborhoods.<br /><br />The next City Commission needs to call for, and act upon, good planning from its planning staff. This means monitoring the pace of growth and ensuring that the developers are not allowed to add subdivisions, shopping centers and other developments that are not needed.<br /><br />Over the next few weeks, I will itemize some of the specifics of the overbuilding that has taken place in Lawrence along with the harm that this overbuilding has created.<br /><br /><br />For more on this pace of growth in Lawrence see my recent study at:<br /><br /><a href="http://www.saup.ku.edu/People/UBPLFaculty/KirkMcClure/Pace%20of%20Growth%20Study.pdf">http://www.saup.ku.edu/People/UBPLFaculty/KirkMcClure/Pace%20of%20Growth%20Study.pdf</a>Kirk McClurehttp://www.blogger.com/profile/05289172523302036414noreply@blogger.com0tag:blogger.com,1999:blog-34311931.post-34693020521721516022008-09-23T11:50:00.000-07:002008-09-23T12:19:12.588-07:00Planning in Lawrence has failed<span style="font-family:arial;"><strong>How the City has let the Growth of Supply Outpace the Growth of Demand<br /></strong></span><br /><span style="font-family:arial;"></span><br /><span style="font-family:arial;">Lawrence has grown in population and income, and that is good. But the growth in real estate development has outpaced the demand for that real estate, and that is bad. It causes disinvestment and blight, and all too often the taxpayers suffer.<br /><br /><em>Housing<br /></em><br />Since 2000, developers added about 800 units per year while the population growth would support only about 400 units per year.<br /><br />The surplus has brought about an out-migration from older neighborhoods resulting in a loss of units. The loss of population and units resulted in a loss of value and deterioration in the city’s older neighborhoods.<br /><br /><em>Retail Development<br /></em><br />Inflation adjusted growth in retail spending since 2000 is growing at 0.2 percent per year, enough to support about only 25,000 to 30,000 additional square feet per year. <br /><br />From 2000 through 2007, the stock of retail square feet is growing at 3.1 percent or about 150,000 square feet per year.<br /><br />The developers added about 1.3 million square feet beyond what the growth in retail spending could support. This is approximately the size of the retail space in the entire downtown or about one-fourth of the total stock of space.<br /><br />The situation is rapidly becoming worse as an additional 750,000 square feet of space have been approved for West 6th Street from Folks Road to the South Lawrence Trafficway. If all of this space is built, it will swell the stock of surplus space to over two million square feet.<br /><br />The surplus development has stalled redevelopment plans downtown and has pushed the vacancy rates so high that disinvestment and blight now threaten several older shopping centers.<br /><br /><em>Industrial, Warehousing, and Office Development<br /></em><br />Employment growth, like population growth, has slowed since 2000. It has declined for manufacturing and warehousing jobs but continues to grow slowly for office jobs.<br /><br />Manufacturing space grows in incremental steps as facilities are added. However, there have been no significant additions to the stock of manufacturing space since 2003. Manufacturing space has stabilized with no additions because demand for the space is contracting rather than growing. This means that empty space is available on the market.<br /><br />The supply of warehousing space is growing at about 2 percent per year, adding about 85,000 square feet each year. Warehouse space is growing despite declining employment. This means a surplus condition exists.<br /><br /><br />Office space is growing at about 2.3 percent per year, adding about 67,000 square feet each year, a rate close to the rate of growth in employment. The office sector is reasonably balanced with growth in supply closely matching growth in employment, but the market is negatively impacted by the surplus of retail space that is being offered as office space.<br /><br /><br /><em>Conclusions<br /></em><br />Allowing the supply of real estate to grow faster than growth in demand adds to costs. Unneeded roads, sewer lines, water lines are built to service this space. Police and fire protection must be provided even if the space is empty.<br /><br />Growing supply faster than growth in demand does not stimulate more demand. Lawrence has been overbuilt for years. Yet, surplus housing has not attracted more population. Surplus retail stores have not attracted more vendors. Surplus industrial and warehouse space has not attracted more employers.<br /><br />Growing supply faster than growth in demand causes older areas to deteriorate. Older neighborhoods are not receiving sufficient investment in the form of replacement homes and improvements to existing homes to maintain their value. Older neighborhoods are losing value, schools and people. Downtown, which is one of Lawrence’s strongest attractions, is stagnating and failing to attract vendors into its newly renovated shops.<br />Employment centers sit empty while the City rushes to build more.<br /><br /><br /><em>Lessons to learn<br /></em><br />Growth in supply is not growth in demand. <br /><br />City and county leaders, and their planners, should view it as part of their job to fix a failure in the marketplace, which is the propensity to overbuild. These leaders should keep the growth of supply in balance with the growth in demand. This means limiting growth to just that amount that can be absorbed without harm to the community at large.<br /><br />The community is overbuilt, and a long cooling off period is needed. The city should stop adding to the problem and work toward redirecting growth into existing space.<br /><br />The community needs to stop the overbuilding and permit only very selective development that can clearly demonstrate that it responds to an unmet need, despite the surplus stock that exists.<br /><br />In the housing sector, the city needs to take steps to redirect growth away from new sprawling subdivisions on the perimeter of the city and toward the older neighborhoods that are suffering from disinvestment and decay.<br /><br />In the retail sector, the city needs to protect and enhance its downtown, the retail district that attracts the coveted tourist dollars. The city needs to stop the unneeded expansion of retail space at the perimeter of the city and help to redirect retail spending to the downtown and the other shopping centers distributed around the city.<br /><br />In the industrial and office sector, the city needs to carefully gauge the pace of growth of employment and limit the expansion of employment centers, whether office parks, industrial parks, or other form of employment center, to just that level that can be absorbed.<br /><br />None of these steps means a complete moratorium on development. Moratoria have been tried and failed in other communities. Except in a few short-term situations, they do not work. However, city leaders need to realize that the stock of real estate is in trouble largely because the city has pursued a pace of growth that cannot be sustained.<br /><br />In the housing sector, the city should stop the development of any new subdivisions until it is clear that more are needed. Evidence of this would be found in low vacancies among existing homes and small inventories of homes for sale.<br /><br />In the retail sector, the city should avoid adding to the problem by approving any more retail proposals. However, from time to time, a neighborhood center may be needed because it will serve a newer subdivision that does not have a neighborhood center. Despite the retail market being overbuilt, some small quantity of new space may be needed to service the homes in this new subdivision. However, the city has approved several new retail developments that, if built, will be harmful to the city as a whole. Some of these developments cannot go further because they are unable to obtain the needed leases to leverage loans from banks. The development permission given to these projects runs for 18 months. As this permission expires, it is customary for the city to grant extensions without scrutiny of the impact of these unneeded projects upon the remainder of the city. This should be stopped. Until such time as the city can easily absorb new space without hurting existing shopping districts, the city should stop renewing the development approvals. When these retail developments come up for renewal, they should be shelved.<br /><br />In the industrial and office sector, the city should avoid adding to the problem of surplus employment centers. While land needs to be available for the small number of new firms that may locate in Lawrence, there is already an ample stock of unused and underutilized buildings. The city should make every effort to make use of these structures before sprawling into new sites. In addition, the city should make every effort to use the existing employment center land before bringing more onto the market. Sprawling development, whether housing or manufacturing or office space, adds unnecessary and costly public improvements, and it stretches city services that are already stretched.</span>Kirk McClurehttp://www.blogger.com/profile/05289172523302036414noreply@blogger.com0tag:blogger.com,1999:blog-34311931.post-71213859115876854562008-04-21T07:31:00.000-07:002008-04-23T06:29:17.457-07:00Which city, Overland Park or Lawrence, is practicing smart growth?<p><span style="font-family:arial;">Lawrence has been on a spree of approving retail shopping centers that are not needed. The City Commission approved a second Wal-Mart. It approved another shopping center at 6th and Wakarusa, far beyond the square footage called for at that intersection. It approved two large shopping centers at 6th and the South Lawrence Trafficway.<br /><br />This excessive approval of retail development proposals has been going on for some time, and it is harmful to the community. It hurts the downtown generally by siphoning spending away. It makes it impossible to complete various downtown redevelopment projects, such as Downtown 2000, which has left the taxpayers paying for an empty parking garage building. It hurts the capacity of other downtown projects to attract tenants, such as the Hobbs-Taylor building. It adds to the stock of vacant and deteriorating space found all over town. </span></p><p><span style="font-family:arial;">Lawrence has developed retail space at a growth rate of 3.0 percent per year from 1995 through 2007. Yet, inflation adjusted retail spending--a good measure of demand for this space--has grown by only 0.9 percent per year during the same time period. Thus, Lawrence has allowed its supply of retail space to grow at over three times the pace of growth of demand for that space. This means that new space, if absorbed at all, simply takes demand away from existing space. The result is widespread vacancy, deterioration, and blight. </span></p><p><span style="font-family:arial;">Overland Park is a nearby city confronting similar growth problems. It is interesting to note that Overland Park has kept the pace of growth of retail supply in line with the growth in demand for that supply. From 1990 through 2007, inflation adjusted retail spending in Overland Park grew by 2.1 percent per year. During the same years, Overland Park allowed its stock of retail space to grow by 1.7 percent per year. </span></p><p><span style="font-family:arial;">Overland Park is practicing smart growth. It is keeping the growth in supply in balance with the growth in demand. As a result Overland Park’s retail market is in much better shape than is Lawrence’s retail market. Lawrence is not practicing smart growth, and it is paying the price. </span></p><p><span style="font-family:arial;"></span> </p><p><span style="font-family:arial;"><em>What happens when developers control the pace of growth? </em></span></p><p><span style="font-family:arial;">The Planning Commission tends to worsen these mistakes by granting the developers unlimited extensions of time in which to develop. When these developments initially go before the Planning Commission and the City Commission, they promise to initiate development within 18 months. Several have failed to move forward because they cannot find sufficient tenants. Rather than admit a mistake, they ask for--and receive--extensions of time to look for tenants. The Planning Commission should admit the mistakes of approving these unneeded developments and refuse the extensions.<br /><br />Lawrence city government is controlled by the coalition of developers who contributed heavily to get pro-developer individuals elected to the City Commission. These elected pro-developer city commissioners have appointed pro-developer friends to the Planning Commission. This means that developers are getting all that they ask for, even when it runs contrary to the community’s plan which calls for balanced growth. </span></p><p><span style="font-family:arial;">There is value in smart growth. It prevents loss of value to existing centers. It protects the existing downtown. It helps maintain a healthy level of investment in existing shopping centers. It promotes redevelopment plans.<br /> <br />Lawrence is losing value rapidly. Smart growth can help resolve that problem, but we need leadership that understands the harm that results from letting developers set the pace of growth. We need leadership that understands that smart growth will not happen by itself; we need to consciously plan for our future and work hard to achieve it.<br /><br /><br /> </span></p>Kirk McClurehttp://www.blogger.com/profile/05289172523302036414noreply@blogger.com0tag:blogger.com,1999:blog-34311931.post-47744592278612551312008-04-21T07:26:00.000-07:002008-04-21T07:29:50.440-07:00What does the tax abatement report really say?<span style="font-family:arial;"><br />On Friday, the Lawrence Journal World stated, “The [Public Incentives Review] committee on Thursday unanimously approved its annual report, finding that all eight companies receiving tax breaks are in compliance with the city’s economic development policies.”<br /></span><br /><br /><span style="font-family:arial;">This is not what the Public Incentives Review Committee (PIRC) did. The PIRC made no finding of compliance or lack of it. Rather, the PIRC swept the high level of non-compliance under the rug as it has for many years in the past.<br /></span><br /><br /><span style="font-family:arial;">The newspaper also said, “In total the companies had exceeded their job creation projections by 87 full-time jobs and 123 part-time jobs.” This is a case of looking at the glass as one-quarter full rather than three-quarters empty.<br />Here are the facts:</span><br /><span style="font-family:arial;"><br /><br />· In terms of making the promised investments, of the 11 currrent abatements, only 8 delivered, 2 fell well short, and 1 chose to lease the property.<br /><br /><br />· In terms of paying wages at or above the average found in the community, 4 of the 8 firms have substantial numbers of workers being paid from $3 to $6 per hour below the community average within each occupation group.<br /><br /><br />· In terms of producing the promised jobs, 4 firms fulfilled their promises, 1 firm fell 2 workers below the promised amont, and 3 fell well below the promised job production.<br /><br /><br /><br /><br />It is true that the total number of jobs at all firms given tax abatements is in excess of the total number of jobs promised. The firms that met the promised number of jobs produced more extra jobs than the shortfall experienced by the firms that failed to meet their promises. However, this statistic would have merit only if the jobs would not have been generated in the absence of the tax abatement. This is simply not the case.<br /><br />The tax abatement is a needless giveaway. The firms would have produced the jobs without the tax abatement. Some of the firms have made public statements to this effect. All of the published research on tax abatements finds this to be true. Property taxes are too small a percentage of a firm’s total operating expenses to be crucial to the decision to build or expand. However, lower taxes are always helpful to enhance profits; thus, firms ask for the tax abatements even when they are not important to the decision to build or expand. The firms will even lie to the City saying that without the tax abatement the firm cannot build or expand.<br /><br />What the report shows is that Lawrence has an ongoing problem with its tax abatement program. In a normal economic development program, non-compliance should be minimal. The PIRC should be discussing what to do with no more that one firm that is out of compliance. Instead, the PIRC is trying to cover up the fact that non-compliance is normal in Lawrence. Six of the eight firms are substantially out of compliance in at least one of the important areas or investment, wages, or jobs. This is not a new or temporary condition; it has been going on for years.<br /><br />The City has been misled. It has been told by business advocacy organizations, such as the Chamber of Commerce, that tax abatements are needed to attract firms even though the experience both locally and nationally says the opposite. The City has been led into a position of offering abatements, almost automatically, to firms just for the asking. Yet, these firms fail to make the promised investments, fail to pay wages comparable to other firms in the community, and fail to produce the promised jobs. In many cases, the firms go out of business before the City can hope to realize any benefits. (Note that the PIRC report is deficient in that it only reports on existing abatements; it does not report of the firms that have been given abatements that went out of business such as Davol or E&E.)<br /><br />An ongoing problem of non-compliance hurts the City. Not only does the City not get the jobs and wages and taxes promised, but it cannot negotiate effectively with future firms. Word is out; Lawrence is a pushover town. A firm can promise much, produce little, and still keep its tax break.<br /><br />The City of Lawrence is confronting a severe budget problem. Revenues are not flowing into the City as expected. Planned expansion of the library has been scrapped. Social service agencies saw their budgets cut (although the Chamber of Commerce was given even more taxpayer money to further its failed economic development activities). Discussion has already been started on possible elimination of the bus system, the public transit needed by many people of low-income. We would all have been better served if we had not offered needless giveaways to firms in the form of tax abatements. Those lost tax revenues are sorely needed.<br /><br /></span><br /></span>Kirk McClurehttp://www.blogger.com/profile/05289172523302036414noreply@blogger.com0tag:blogger.com,1999:blog-34311931.post-53132595948795186782008-04-12T08:14:00.000-07:002008-04-15T07:00:47.817-07:00How should Lawrence conduct its economic development efforts?<span style="font-family:arial;"><strong>It is time to change the role of the Chamber of Commerce.<br /></strong><br /><br /></span><span style="font-family:arial;"><em><strong>Recent developments present an opportunity.<br /></strong></em><br />The City of Lawrence, Kansas does not conduct its economic development planning through city staff. Rather, the City hires the Chamber of Commerce to conduct these tasks.<br /><br />In the wake of controversy and legal embarrassment, the Chamber of Commerce is about to replace its Executive Director.<br /><br />This provides an opportunity for the City to rethink how it goes about conducting its economic development efforts.<br /><br /><br /><br /></span><span style="font-family:arial;"><em><strong>Definition of economics development.<br /></strong></em><br />Economic development means helping a city achieve higher levels of employment as well as attracting higher levels of tax revenue from non-residential sources than would otherwise be the case. This usually involves:<br /><br /><em>Outreach:</em> This means advertising the City to prospective businesses who might locate here.<br /><br /><em>Subsidy packages:</em> This means generating analysis to determine whether or not the city should offer incentive packages to firms to locate here or to firms already here that may expand. These incentives may come in many forms. They may take the form of tax reduction through rebates or refunds. They may offer financial assistance through various forms of loans, which may come at below market interest rates. They may offer cost reduction through providing land, buildings, and infrastructure at reduced prices.<br /><br /><em>Planning:</em> This means conducting research to identify weaknesses in the local economy and to identify the needs of the community in the future. This research should monitor which sectors of the economy suffer from the greatest levels of unemployment and underemployment. It should also project the needs of the community for future employment and use this research to guide future actions.<br /><br /><br /></span><span style="font-family:arial;"><strong><em>Current state of economic development in Lawrence.<br /></em></strong><br />For many years, the City has hired the Chamber of Commerce to conduct its economic development activities. The Chamber provides some outreach services. The Chamber has supported numerous applications for subsidy packages from the City to private firms without analyzing the need for the subsidy packages. The Chamber conducts little to no planning research.<br /><br /><br /></span><span style="font-family:arial;"><strong><em>The record.<br /></em></strong><br />The record of the Chamber of Commerce in the field of economic development is one of failure.<br /></span><br /><span style="font-family:arial;"><br /></span><span style="font-family:arial;"><em>Tax Abatements:<br /></em><br />The Chamber has actively led the City into a large list of tax abatements. Of the 17 firms granted abatements:<br /><br />· Only 6 produced the promised jobs and wages.<br />· The remaining 11 are either out of compliance, out of business, or not reporting.<br /><br />This record of success is unimpressive. The abatements are:<br /><br />· Successful only: 35% of the time;<br />· Non-compliant: </span><span style="font-family:arial;">40% of the time; and<br />· Complete failure: 25% of the time.<br /><br />(See Annual Reports of the Public Incentives Review Committee.)<br /></span><br /><br /><span style="font-family:arial;"><em>Secret meetings:<br /></em><br />The Chamber actively sponsored secret meetings to arrange for packages of taxpayer-funded subsidies to private firms. The parties at these meetings included the City Commission, the buyers of the property, and the sellers of the property. The only people excluded were the taxpayers. The Attorney General found these meetings to be in violation of the Kansas Open Meetings Act. (See “AG: City leaders broke law: Morrison proposes open meetings training for settlement” Lawrence Journal World December 1, 2007.)<br /><br /><br /></span><span style="font-family:arial;"><em>Failed projects:<br /></em><br />The Chamber has led the City into failed projects. The Chamber recently held a celebration of its accomplishments in a building developed, at least partially, at taxpayers’ expense that has remained vacant for years. Many other failures such as Serologicals and Decyphera exist. (See Mark Fagan, “Business Park Marks 20 Years,” Lawrence Journal World April 1, 2008.)<br /><br /><br /></span><span style="font-family:arial;"><em>Enforcement:<br /></em><br />Chamber staff actively resisted any and all efforts by the Public Incentives Review Committee to investigate the level of compliance by firms with the terms of their tax abatements. (See Minutes of the Public Incentives Review Committee.)<br /><br /><br /></span><span style="font-family:arial;"><em>Lack of Planning:<br /></em><br />The Chamber conducts virtually no planning in its economic development exercises. It has supported proposals for such grandiose projects as the development of 1,000 acres of industrial park space, yet it has failed to produce any planning analysis that would justify such a large facility. (Lawrence Journal World, Group recommends 1,000 acres to assist in creation of jobs, December 5, 2001.)<br /><br /><br /></span><span style="font-family:arial;"><em>Lack of Analytical Skills:<br /></em><br />The City has recently fielded requests from the developer of the Oread hotel for subsidy through the Tax Increment Financing and Transportation Development District programs. The City had to hire outside consultants to review the subsidy request because neither the City staff nor the Chamber staff possess the capabilities to perform this type of analysis.<br /><br /><br /></span><span style="font-family:arial;"><em><strong>What Lawrence needs.<br /></strong></em><br />Lawrence needs to bring economic development skills inside City Hall.<br /><br />The Chamber of Commerce is a business advocacy organization. Economic development strategies need to be good for business, but, more importantly, they need to be good for the City and its taxpayers. Everything that is good for business is not necessarily good for the City and its taxpayers. The Chamber has shown itself to advocate for the interests of business at the expense of the interests of the City.<br /><br />Lawrence needs intelligent, knowledgeable, highly skilled economic development leadership that is an advocate for the City and its taxpayers.<br /><br />Lawrence needs economic development planners that can guide the City through detailed negotiations with firms to ensure that a subsidy package, if any, is in the City’s best long-run interests, not simply a giveaway to any business that asks.<br /><br />Lawrence needs economic development planners that can accurately project the City’s future needs without exaggeration or bias.<br /><br />Lawrence needs economic development planners that will be open and transparent in the development and analysis of subsidy packages and will understand the confines of the law prohibiting secret meetings.<br /><br />Lawrence needs economic development planners who will enforce the terms of agreements between the City and private firms receiving taxpayer dollars.<br /><br /><br /><br /></span><span style="font-family:arial;"><em><strong>Recommendation.<br /></strong></em><br />It is time for Lawrence to learn the difference between economic development and business advocacy.<br /></span><br /><span style="font-family:arial;"></span><br /><em><span style="font-family:arial;">Redefine the role of the Chamber.</span></em><br /><br /><span style="font-family:arial;">The Chamber has lost the respect of the taxpayers by leading the City Commission into failed projects, into illegal meetings, and into tax giveaways that do not produce as promised. The Chamber’s role in economic development should be redefined. The Chamber needs to be heard as economic development issues arise, but the Chamber should not be performing any of the analysis or planning duties.<br /></span><br /><span style="font-family:arial;"></span><br /><em><span style="font-family:arial;">Bring professional economic development planning expertise onto the City staff.</span></em><br /><p><span style="font-family:arial;">Bring the job of economic development inside City Hall. Increase the skill level of the planning staff to include:<br /><br />· Analysis of the feasibility of real estate development projects so that the need for subsidy can be determined by someone who interests lie with the City and not with the businesses who will be subsidized,<br /><br />· Analysis of market conditions so as to determine the true need for commercial and industrial space, protecting the City from engaging in unneeded industrial parks, retail centers, or office parks that will further expand the surpluses that already exist, and<br /><br />· Analysis of existing programs to fairly assess their effectiveness so that they can be expanded when they succeed and redesigned or discontinued when they fail.</span></p><span style="font-family:arial;"></span>Kirk McClurehttp://www.blogger.com/profile/05289172523302036414noreply@blogger.com0tag:blogger.com,1999:blog-34311931.post-92189694771534860102008-01-22T21:15:00.000-08:002008-01-24T06:24:37.349-08:00Should Lawrence adopt the Smartcode?<span style="font-family:arial;"><em>Is the Smartcode worthy of its name?<br /><br />“Smart growth, or sustainable development, has been tested as a policy in at least two-dozen states since the 1970s, when the term first appeared. It's evolved over the decades, to be sure, but the chief goals remain: to plan better, rein in sprawl, redevelop in established urban areas, promote mixed-use growth near transit and in environments that are easy to walk around, and offer a range of housing types that are affordable to different incomes. “ - Lincoln Land Institute Smart Growth: Form and Consequences (2002).<br /><br /></em>The Smartcode does nothing to rein in sprawl, it works against the redevelopment of established areas, and it does not ensure that development proceeds at a sustainable pace. While it makes a nod to mixed-use and the ability to walk around, it does nothing to ensure that affordable housing is provided in new developments. As such, the Smartcode fails to deliver what it promises.<br /><br />The Smartcode is a poorly designed development code that removes most public input from the development process and circumvents needed review of many development projects by both the Planning Commission and the City Commission.<br /><br />The basics are as follows:<br /><br />Certain districts would be designated as appropriate for development. Once designated and zoned, no further public input is permitted on any development proposal. Yet, we know from experience that citizens rarely become involved in the zoning process; they only become involved when a development proposal comes forward.<br /><br />If a developer plans a development within these districts, and if a committee of planning staff members (called the Consolidated Review Committee or CRC) finds that the architectural design of the development meets the design guidelines of the Smartcode, then a building permit is issued.<br /><br />There is no review by the Planning Commission, and there is no review by the City Commission. Because public input is only received through hearings before these two bodies, there is no public input on the process.<br /><br />The Smartcode assumes that if land is zoned, that the developer can build at any time with only cursory staff review. If the market cannot absorb the new development without negative impact upon existing space, the Smartcode does not prevent this negative impact. In fact, it facilitates growth at an unsustainable pace.<br />If the CRC does not approve the development plan, the developer may appeal to the Planning Commission. There is no obligation for the CRC to inform the public of the development plan or seek out public input. If the public does learn of the development plan, it has no capacity to provide input. The public cannot appeal the decision of the CRC to either the Planning Commission or the City Commission.<br /><br />The Smartcode calls for subsidies to certain types of developments that meet the architectural guidelines within the code. It is apparent that the Smartcode calls for subsidies to development that will take place without subsidy and fails to assist development in older neighborhoods that will not take place without subsidy. This is wasteful and counterproductive.<br /><br /><em><br />Good design does not resolve all planning problems<br /><br /></em>Smartcode is a needless giveaway to the developers. The Smartcode derives from a false belief that if development meets certain design guidelines, that all of the other planning and developments problems resulting from the proposal are resolved. It would be nice if beautiful architecture could overcome all the other problems, but it cannot. There is nothing in the Smartcode that prevents the development community from its continued overbuilding. If the district is zoned and if the development plan meets certain architectural guidelines, then the development can obtain its building permit even if the neighbors object and even if the development will have a negative impact upon other parts of the community (such as traffic congestion or adding to an already overbuilt supply of space).<br /><br />The planning staff made a few modifications to the initial draft of the Smartcode by agreeing that the CRC will examine a developer provided market analysis and traffic impact study. The staff has not demonstrated either the skill or the willingness to respond appropriately to market studies in the past. There is nothing in the Smartcode mandating attention to these issues now. Further, there is little reason to believe that developer provided studies will tell the truth. In Lawrence, we have seen many false reports, making phony claims and exaggerated promises. For every piece of failed real estate, there is a market study saying the property would succeed. The planning staff have accepted and approved these studies in the past. They have made few, if any, efforts to correct these studies or to create their own studies. This record does not suggest that the public can trust the planning staff to do better in the future.<br /><br /><em><br />Building space faster than growth in demand for that space<br /><br /></em>The greatest threat to Lawrence is the excessive pace of growth in the supply of real estate. The community should expect, even demand, good design without offering subsidies or accelerated access to building permits. The community should be a part of the development process from the zoning decision all the way through to the final development plan approval.<br /><br />The development industry confuses growth in supply with growth in demand. Economic growth is assessed by the growth in demand, which is the growth in people and their income. When we have more people and these people have more income, then their spending will demand more goods and services.<br /><br />These goods and services may include more homes and support more retail stores. Note that building more homes and stores does not generate more people or income. Demand must precede supply and support supply. If supply is built beyond the available demand, then bad things happen. Older shopping centers empty out and become blighted. Older neighborhoods decline. Developers never pick up the cost of this blight; they simply look to the taxpayers to pay the very expensive costs of redevelopment. Even this expensive redevelopment fails unless there is sufficient demand for the revitalized space.<br /><br /><br /><em>Sustainable growth means supply growing no faster than the growth in demand<br /><br /></em>It is crucial to the health of any community that the growth in supply be kept at a pace that matches the growth in demand. Unfortunately, the development and construction industries are prone to overbuilding. Cities, under pressure from developers, are prone to over-zoning. This is true throughout the nation, not just here in Lawrence. Preventing excessive growth in supply is easy and costless; it only takes well-managed growth controls by the community.<br /><br />This is the purpose of the market analysis requirement integrated into the planning process. Lawrence has ignored this analysis because it has, for years, indicated that Lawrence is building more homes than it needs and more retail space than it needs and more office space than it needs. Developers and builders have brought political pressure on the planners to ignore the market signals indicating that the market is building at an unsustainable pace. Except at the extreme, developers make money even in overbuilt markets. Thus, the builders and developers have captured control of the political process to prevent the community from taking steps to slow the pace of growth.<br /><br />What Lawrence needs is smart growth management tools not misnamed smart development codes that are giveaways to a development industry that has proven itself prone to overbuilding.<br /><br />Lawrence should not adopt the Smartcode and should actively work toward bringing the pace of real estate development in line with the growth in demand for that development.<br /></span><br /><span style="font-family:arial;"><br /></span><br /></span>Kirk McClurehttp://www.blogger.com/profile/05289172523302036414noreply@blogger.com0tag:blogger.com,1999:blog-34311931.post-5346242694996615092008-01-18T14:59:00.000-08:002008-01-19T06:44:03.264-08:00Oread Inn, Eldridge Expansion, and TIF Loans<p><span style="font-family:arial;"><strong><em>How should the City approach reqests for TIF and TDD financing?</em><br /></strong></span></p><p><span style="font-family:arial;">The developers of the Oread Inn (the Fritzel family) bring a very interesting project to the community. It may be a project worth the community’s investment, but the devil is in the details. The community needs to be very careful with its scarce resources, including its future tax revenues. The community should subsidize commercial projects like these hotel proposals only:</span></p><ul><li><span style="font-family:arial;">Where it is sure that the net result is beneficial to the community, and </span></li><li><span style="font-family:arial;">The financial commitment is not one dollar more than is minimally necessary for the project to move forward. </span></li></ul><p><span style="font-family:Arial;"></span> </p><p><span style="font-family:arial;"><em>Here are the basics of the Oread Inn proposal:</em><br /><br />The development will cost about $31 million. Of this total, about $6 million is for a parking garage and $5 million is for off-site improvements (road, pipes, walks, etc.) The developer will finance about $20 million, and the city will finance about $11 million (the parking garage and the off-site improvements) though Tax Increment Financing (TIF) bonds and Transportation Development District (TDD) bonds.<br /><br />TIF bonds are bonds sold to investors through the normal bond market. However, these bonds are sold with the understanding that the revenue to repay the principal and interest on the bonds will come from pledging some or all of the incremental taxes generated by the project. Thus, the project will pay to the city, county, and school district the taxes that would have been collected from these properties had no new development taken place. The taxes collected above these original levels, called the tax increment, can be pledged to repay the TIF bond debt. Kansas law permits some or all of the city and county tax increments to be pledged to repay TIF bond debt. Kansas law prevents all of the school tax increment from being pledged to repay TIF bond debt; a portion of the new tax revenues must be given to the school district. To the extent that portions of these city, county, or school district taxes are pledged to repay TIF bonds, these future tax revenues are lost to local government. Until the debt is retired, government services will have to be paid by other taxpayers.<br /><br />TDD bonds are very similar to TIF bonds. The difference is that the tax revenues pledged to repay the bonds come from a special sales tax that is added to the properties within the district. This TDD tax giveaway is of less concern to a community than the TIF giveaway because, if used appropriately, all of the tax revenue comes from non-residents (i.e.: tourists staying at the hotel). There is no capacity for the city to impose the tax without pledging it to repay TDD bonds; thus, there is no loss of future tax revenue to the city as there is with the TIF.</span></p><p><span style="font-family:Arial;"></span> </p><p><span style="font-family:arial;"><em>What the developer wants<br /></em><br />The developer wants all legally available local taxes generated by this project pledged to repay the bonds. The developer has offered a letter of credit to fully cover the debt on the bonds in the event of default by the property. Thus, the city cannot suffer out-of-pocket losses on this project, but the city will not see any tax revenues from this project until the bonds are fully repaid. This could be as long as twenty years. </span></p><span style="font-family:arial;"><p>Some of the taxes that would come to the city from this project will go to paying for the hotel’s parking garage. As such, these funds will not be available to meet the city’s other needs. Also, some of the taxes that would come to the city from this project will go to paying for the hotel's road, sidewalk, and utility line improvements that would not otherwise be needed by the city.<br /><br /><em></em></p><p><em>The city's decision process</em></p><p>What this means is that the taxpayers are giving property taxes from this development back to the development itself. If the community believes that this project will be so beneficial that it merits this return of taxes, then it may be a subsidy deal worth undertaking. Unfortunately, the process is not designed to help us make this assessment.<br /><br />What the developer is offering is:<br /><br />Option 1: A 7-story hotel (7 stories above Oread Avenue with 3 stories of garage below) which would require 20 years to retire the TIF bonds.<br /><br />Option 2: An 8 or more story hotel (with condominium units on the top stories) which could permit repayment of the TIF bonds in ten years bringing the property onto the tax roles much earlier.<br /><br />The developer claims that the project is not feasible without the TIF bonds. This may or may not be true. The city can and should determine the accuracy of this claim by careful examination of the developer’s projected expenses and revenues. It is possible that that a smaller project would be feasible with no tax increment financing. It is possible that the project, as proposed, is feasible with TIF bonds paying only for portion of the public improvements and the parking garage.<br /><br />It is unclear if anyone within city hall is examining these issues and guiding the negotiations toward an optimal design for this project from the perspective of the taxpayers.<br /><br />The developer is doing a masterful job of boxing the city into a corner. The city should hold off on the deciding about the historic issues, the zoning issues, or the design issues for now. First it should decide what is the best option for the city and negotiate for that option. However, the developer is pushing ahead on these issues so that the city effectively will be given a “take it or leave it” choice. This is unfortunate and should be avoided.<br /><br />The developer is also planning a similar expansion of the Eldridge Hotel downtown. It wants to expand the hotel to the west to Vermont Street with underground parking, conference facilities and additional rooms. It is very likely that a similar or even larger TIF and TDD request will be made for the Eldridge.<br /><br />The process that the city is following is reminiscent of the process followed years ago to approve the financing of the parking garage on the 900 block of New Hampshire. The process ensured that the financing was legal, but the process did not ensure that it was beneficial to the city. As a result, the city is now paying for a parking garage for which it is struggling to find cars. Much of the concern over the Oread Inn financing is resolved with the letter of credit guarantee offered by the developer. However, much remains unresolved.<br /><br />Being legal is not enough; the project should be beneficial to the city and avoid any unnecessary giveaway of much needed tax revenues.<br /><br />The city has hired a consultant to address the feasibility issues. This feasibility study is to be completed by January 30th. The city has published a “calendar of events for TIF and TDD” for review and approval of the Oread Inn project. The calendar provides no time for negotiations between the city and the developer. Rather, the calendar is couched entirely in terms that assume approval of the developer defined proposal. The calendar’s language assumes the developer alone defines the proposal; there is no provision for negotiations and modifications by the city. Further, the calendar assumes approval of the developer’s proposal at each and every step along the way. There is no conditional language stating that approval at a later stage is conditioned upon approval at an earlier stage. There is no decision tree showing alternative paths that may be taken to a negotiated agreement if the city agrees to partner with the developer in the building and financing of this hotel.</p><p><br /><br /><em>What should happen next?<br /></em><br />The city should take command of the approval process and enter into negotiations with the developer. The city should seek to maximize the tax revenues that can flow to the city from this hotel. Giving away all of the tax revenue means that the city’s economy gains a few jobs, but the city must provide police and fire protection to the hotel plus other services for which it will not be compensated. It also means that the city will lose this hotel as a source of much needed revenues to pay for the ever growing costs of running the city. To maximize these revenues, the city must negotiate with the developer on alternative development schemes that may reduce the need to tax increment financing.<br /><br />These questions need to be answered:<br /><br />1. Will more hotel rooms permit the bonds to be repaid earlier, bringing the property onto the tax roles earlier?<br /><br />2. Can alternative design schemes be feasible without pledging all of the tax dollars to the project?<br /><br />It is the role of the city Manager and the Director of Development to assure the taxpayers that these issues are being addressed. Both are relatively new to their positions. Being new, neither has developed a track record of prior success in such negotiations that can build public trust.<br /><br />We cannot afford to sit back and depend upon the developer to propose a scheme that is optimal for the city. Provision of TIF and TDD bonds is a significant participation by the city. If the city is to become a partner in this development, city staff members need to take a lead role in the examination of alternative design schemes which may be better for the taxpayers.<br /><br /><br /></p></span>Kirk McClurehttp://www.blogger.com/profile/05289172523302036414noreply@blogger.com0tag:blogger.com,1999:blog-34311931.post-8913978018722045012007-07-25T07:52:00.000-07:002007-07-28T10:13:37.307-07:00What happens when the Planning Commission does not plan?The Lawrence-Douglas County Planning Commission consciously defined itself as the "land use" commission when it reviewed the development plan for the city's second Wal-Mart, this one to be located at 6th Street and Wakarusa Drive. Anytime a planning commission shirks its duty to plan and attempts to redefine itself as something less, such as a "land use" commission, a city is hurt.<br /><br /><br /><br />On July 23rd, the Planning Commission reviewed the development plan for the second Wal-Mart. The Chair of the Planning Commission stated, "We are the land use commission". With this statement, the Chair asserted that the role of the Planning Commission is very narrow, that of administering zoning ordinances that specify the height, size, and use of buildings. Zoning administration is part of the job of the Planning Commission, but this is far short of all of its full job.<br /><br /><p><em>Horizon 2020</em> is the comprehensive plan for the community. The zoning ordinance and zoning map derive from this plan, but they are not the whole of the plan. The plan calls for the city to monitor the pace of growth of retail space and to protect and preserve the city's existing retail districts. </p><br /><br />Maintaining the proper pace of growth is crucial to the success of a city. If the retail space grows too fast, the new space will be occupied, but the surplus will cause older space to become vacant, to deteriorate, and to cause blight. If a city can pace the growth of retail space so that the pace of growth in supply is balanced with the pace of growth in demand, then the retail market can remain healthy.<br /><br /><br /><br />In the absence of such planning, a city is letting the developers determine the pace of growth of retail supply. History shows that developers are prone to overbuilding. Lawrence is particularly troubled with overbuilding as the supply of space has been growing at three times the pace of growth in retail spending over a period of 12 years. This is a long-term problem. A twelve-year period is not a short-term fluctuation; it is a chronic problem. The harm of this overbuilding is that is causes widespread vacancy in older commercial districts, causing loss in investment, loss in value to surrounding neighborhoods, and lost public investment in revitalization. In Lawrence, the problem is so widespread that the retail oversupply has spread to the office market as dead malls seek out office tenants to avoid total vacancy. This depletes demand from the office market, hurting its capacity to survive.<br /><br /><br /><br />The Planning Commission chose to ignore these issues. When it narrowly defined itself as the "land use" commission, it took the position that if the land is zoned for commercial space, that the developer, not the community, decides when that land is developed. It is this type of thinking that has generated many of Lawrence's real estate problems. It perpetuates the overbuilding that has resulted in:<br /><br /><br /><br />1. A blighting level of vacancy in North Lawrence,<br /><br />2. New retail space downtown unable to attract tenants,<br /><br />3. Wasted large-scale investment in downtown revitalization with the new parking garage unable to leverage new commercial development,<br /><br />4. Office usage of retail space in several malls along 23rd Street, and<br /><br />5. Widespread vacant and deteriorating retail stores.<br /><br /><br /><br />There is little doubt that adding a second Wal-Mart (or any other store of this scale) will add no new spending to the community. It will only displace retail spending from other stores. Thus, adding this new space will only vacate space elsewhere. The City currently suffers from:<br /><br /><br /><br />1. Over 300,000 square feet of surplus vacant space (vacant space beyond a normal 5% vacancy rate),<br /><br />2. Over 800,000 square feet of retail space in the planning process (including the Wal-Mart proposal), and<br /><br />3. An ability to absorb only about 50,000 square feet per year given the pace of growth of retail spending.<br /><br /><br /><br />The arithmetic is sobering. If no more space were to be built, it would take 6 years to absorb just the surplus vacant space that exists now. If all of the proposed space is built (Wal-Mart, Bauer Farms, Northgate, and Mercato), it will take an additional 16 years to fill all of this space.<br /><br /><br /><br />The space may be built, and most of it may be occupied early in its lifespan, but the result will be continued widespread vacancy, deterioration, and blight elsewhere in the community. This can be avoided if the Planning Commission ceases to be narrowly defined zoning administrator and becomes what it is called upon to be, a commission that plans.Kirk McClurehttp://www.blogger.com/profile/05289172523302036414noreply@blogger.com0tag:blogger.com,1999:blog-34311931.post-1190063342622475872007-06-12T19:12:00.000-07:002007-06-12T19:14:27.202-07:00Should the City treat demand for real estate as a scarce resource?<span style="font-family:arial;">The Lawrence Journal World (“Downtown’s future looking up: Leaders may consider guidelines for vertical redevelopment”, June 12, 2007) reports that the City Commission is thinking about ways to help redevelop the downtown. This is a good and useful exercise. The article also reports that the City is considering ways to permit buildings taller than experienced in the past. Again, this is a useful exercise. What is missing in the article is recognition by the City that buildings, at any height, need tenants who want to fill them.<br /><br />The demand for real estate is a function of the population, its income, and its spending habits, not the number or height of the buildings available. There is only a fixed amount of demand available to the various real estate markets of Lawrence. Creating more buildings will not create any more demand. It is a zero-sum game. There is some opportunity to import dollars from elsewhere through tourists, but the capacity to do this is very limited and often overstated. The various households and firms who operate here allocate the total demand for real estate across the City. If a market is overbuilt, attracting demand to any one area of town means that the demand is taken away from another area of town. <br /><br />If the City wants all the built space to be occupied and viable, then it should not permit more space to be built than this finite amount of demand can support.<br /><br />What has been our experience in the various sectors of the real estate market?<br /><br /><em>Retail Sector<br /></em><br />The supply of retail space is growing at an annual rate of over 3 percent per year with demand for that space growing by less than 1 percent. This excessive pace of growth doomed the retail market to what we have today, a market with widespread vacancy and blight. The overall retail vacancy rate is over 8 percent and over 10 percent for general merchandise space, the type of space sought after for downtown. At its extreme, this empty and under-utilized space is blighting some districts such as North Lawrence where nearly one-half of the retail space is empty. But the problem is not peculiar to North Lawrence. Many other retail centers, in all parts of the City, in buildings of all ages and sizes, are experiencing high vacancy.<br /><br />Yet, the developers want to build more.<br /><br />A second Wal-Mart will have little direct impact on downtown. Its competitors will be such vendors as Dillon’s grocery and Ace Hardware. However, the proposed Bauer Farms, Northgate, and Mercato developments are direct competitors with downtown. If built, these three developments will add over 600,000 square feet, equivalent to over one-half of all the retail space downtown. The growth in retail demand is sufficient for the City to absorb only about 50,000 square feet of new retail space per year. Clearly, these three developments constitute many years of growth in retail demand. It is doubtful that any downtown redevelopment proposals can be successful if the City has already approved over a decade’s worth of additional retail space elsewhere.<br /><br />There are too few vendors to fill all of this space as well as redevelop large parts of downtown. Letting the vendors and the developers decide where this space will be filled is not the best way to achieve the city we want. The citizens, working through their planning process, should decide.<br /><br /><em>Office Sector<br /></em><br />The office sector is in even worse shape. The retail sector is so overbuilt that owners of empty malls have leased space to office tenants rather than let their space go empty. This can be seen in the old Tanger Mall, 10 Marketplace, and the Southern Hills Mall. This has not been a temporary problem. Had it been, the mall owners would have taken the more lucrative retail tenants at the first opportunity, but office uses have occupied this surplus retail space for many years.<br /><br />Spreading the problems of an overbuilt retail market into the office market has repercussions for the City’s downtown redevelopment plans. Evidence is found in the office space in the Hobbs-Taylor development. The space built for lease has been empty for too long. <br /><br />Can the City hope to succeed in its redevelopment plans if a high quality project like the Hobbs-Taylor building is unable to lease either its office or its retail space? Usually, the first project in a redevelopment plan captures the latent demand that has been unsatisfied for some time, while buildings built in subsequent phases of redevelopment are slow to be leased. Given the overbuilt markets in Lawrence, even this initial building is struggling to find commercial tenants.<br /><br /><em>Residential Sector<br /></em><br />The stock of homes grew much faster than the growth in population throughout the 1990s. The net growth in the stock of housing (new units minus demolitions) was 27 percent from 1990 to 2000. The growth in population was only 22 percent during the same time period. In round numbers, this means that about 120 more housing units were built per year than were needed. This resulted n unneeded new subdivisions that pulled residents out of older neighborhoods. This fostered deterioration and blight in these older neighborhoods, when the City should be ensuring that these neighborhoods maintain their population and the level of investment in the homes. Of the 40 neighborhoods of Lawrence, 14 experienced a decline in population and/or housing during the 1990s. There is no need for this to happen a growing city. The growth is being squandered. The high level of vacancies and the slow pace of home sales suggest that the problems continue today.<br /><br /><strong>Lessons to Learn<br /></strong><br />The City should treat demand for real estate as a scarce commodity.<br /><br />The market does not do a good job of pacing the growth of supply with the growth of demand. Developers and builders generate more supply than is needed. This creates vacancies and blight in otherwise good markets. The City needs to bring discipline to the market, helping to keep the pace of growth in supply in check with the pace of growth in demand.<br /><br />The City also needs to take the initiative to direct that growth where it can do the most good. <br /><br />For the retail market, the City should not only help to redevelop the downtown, but it should prevent other developments, such as West 6th Street, from damaging the downtown redevelopment plans. There is not enough demand for two downtowns. Lawrence can support one on Massachusetts Street or one on West 6th Street; there is insufficient demand to support both. The City needs to recognize that Massachusetts Street is the core of its unique destination shopping district, a destination that can be imitated but not duplicated on West 6th Street. That core cannot survive if too much additional space is created elsewhere, diluting the demand. We need only look at the Hobbs-Taylor building downtown for evidence. Its retail space remains empty; the market is saturated, leaving very desirable projects such as the Hobbs-Taylor building hurting.<br /><br />For the office market, the process is very similar. The growth of office space needs to reflect the growth in employment among firms in the finance, insurance, health care, and other sectors that occupy this type of space. It is in the City’s interest to keep this component of the commercial real estate market healthy. To the extent that any downtown redevelopment plans contain office space, the success of these plans depends upon new demand materializing. It is hard to foresee success in future office space when a new office building such the one in the 1800 block of Wakarusa Drive has stood empty for years.<br /><br />For the residential market, the City needs to pace the growth of residential space so that it matches the pace of growth of the population. If the net growth in homes is any faster, older neighborhoods are harmed and redevelopment plans for these areas will be foiled. It will add to the City’s debt burden, as it must pay for the new roads, sewers, and other services needed to support this surplus space. A growing city does not need to experience decline in any neighborhood; a smart city manages its growth seeing to it that some amount of growth and investment is attracted to all neighborhoods.<br /><br />Demand for real estate is a finite scarce resource. The amount available dictates the success of any development or redevelopment plan. Good design and location are important, but they are of little consequence if the supply is far in excess of the demand for that space. If the City wants to succeed in its redevelopment plans for downtown, it must do much more than debate the number of stories in the buildings. It must carefully gauge the available demand for new space, permitting no more space to be built throughout the City than can be supported. The City must also allocate that space to downtown and elsewhere with equal care so that the finished space is able to be occupied and remain financially viable. <br /> </span>Kirk McClurehttp://www.blogger.com/profile/05289172523302036414noreply@blogger.com0tag:blogger.com,1999:blog-34311931.post-81957905896239198472007-04-26T20:12:00.000-07:002007-04-26T20:16:54.347-07:00Is the retail market of Lawrence overbuilt?<a name="OLE_LINK2"></a><a name="OLE_LINK3"><span style="font-family:arial;">The retail market of Lawrence, Kansas is out of balance, with space growing much faster than demand for that space.</span></a><br /><span style="font-family:arial;"><br /><em>Growth in supply</em><br /><br />· From 1995 into 2007, the stock of retail space grew by 3.0 percent per year.<br /><br /><em>Growth in demand<br /></em><br />· The inflation adjusted pace of growth in demand for retail space is growing at a rate of little less than 1 percent per year.<br />· The number of retail firms has been effectively flat and retail employment has fallen from 2001 to 2007.<br /><br /><em>Mismatch<br /></em><br />· The mismatch between the pace of growth in supply and the pace of growth in demand is large (supply is growing at a pace 3 times the pace of growth in demand), and it is long-term (lasting more than a decade).<br /><br /><em>Proposed developments<br /></em><br />· Proposed developments will add over 800,000 square feet of retail space. This represents an increase in the already overbuilt stock of over 12 percent.<br /><br /><em>Consequences of the mismatch</em><br /><br />· There is over 540,000 square feet of vacant retail space in Lawrence, 395,000 south of it river.<br />· About 364,000 square feet of this vacant space south of the river is in general merchandise, automotive, and food use, a category that developers are seeking to expand further.<br />· General merchandise space, which makes up about one-half of the total stock of space, has a very high vacancy rate of 13.5 percent. Even if North Lawrence is removed from the stock general merchandise space has a vacancy of 10.1 percent, which is twice the level of a healthy market.<br />· The surplus stock is creating blight that was contained in North Lawrence, but now it is spreading.<br />· The City cannot absorb more space; additional stock will only increase vacancies throughout the City.<br />· The City needs to protect itself from the harm of this overbuilding by slowing the pace of retail development.<br /></span>Kirk McClurehttp://www.blogger.com/profile/05289172523302036414noreply@blogger.com0tag:blogger.com,1999:blog-34311931.post-75109154166737864742007-04-11T16:08:00.000-07:002007-04-19T18:59:12.634-07:00Who should set the pace of development?<span style="font-family:arial;">George Gurley (LJW April 8, 2008) is correct that “the champions of growth and the proponents of preservation could learn to negotiate with one another.” However, his view of the planning and development process in Lawrence is incorrect on many counts.<br /><br />Horizon 2020 is the community’s expression of what it wants. At 6th and Wakarusa, the plan called for 200,000 square feet of space. The developers built that amount, but they want to build more. They are manipulating the planning process, seeking to build over 400,000 square feet, more than twice the planned amount. When blocked from overbuilding, developers criticize the planning process for its “lengthy delays” and “inconsistent interpretations.” What is really happening is that developers will not take “No” as an answer. If an intersection’s retail space is built to capacity, then no more retail space is needed. Proposals to build more should be met with a firm “No” and calling this response a “lengthy delay” or an “inconsistent interpretation” is incorrect and unfair to the community.<br /><br />Gurley disparages efforts to control the growth of retail spaces saying that “overbuilding is usually self-correcting.” The facts show this to be untrue. If the process was self-correcting, there would be no long-terms trend of excessive development or high vacancies. Unfortunately, Lawrence has witnessed both. From 1995 through 2005, the retail space in Lawrence grew by 3.0 percent per year. During the same years, real growth in spending increased only 0.8 percent per year. Thus, retail space grew at a pace over three times greater (in fact almost four times greater) than the growth in demand for that space. The result is a high vacancy rate and conversion of retail space to other uses, spreading the harm of overbuilt markets beyond the retail sector. </span><br /><p><span style="font-family:arial;">The vacancy rate for general merchandise space in Lawrence is over 10 percent, double the normally accepted standard, and this figure excludes North Lawrence and space converted out of retail use, such as the Riverfront Mall. Some of the converted retail space is now in office use, making it hard if not impossible for the office market to succeed. Think of the empty office structure in the 1800 block of Wakarusa; it has stood empty for years. Some of the converted retail space is in hotel use, making it hard if not impossible for the lodging market to succeed. Converting the Riverfront Mall into a hotel has reduced the capacity of other downtown redevelopment plans to materialize including the plan for which the taxpayers built the $8 million parking garage in the 900 block of New Hampshire.<br /></span><span style="font-family:arial;"></span></p><p><span style="font-family:arial;">Developers build in saturated markets because they are willing to gamble that they can still make money. They believe that new, larger, better located space can capture tenants away from older space. They believe that their project will succeed and others will fail. They believe that they can make their money quickly and get out before suffering the long-term consequences of a glutted market. The evidence is mounting against this thinking. For all but North Lawrence, the vacancy rates show that newer space is no different than older space when it comes to maintaining occupancy. The vacancy rates show that larger space is no different than smaller space. Finally, the vacancy rates show that the far west side of town is no different than the east side.<br /><br />The community is paying the price for this overbuilding. The taxpayers endorsed a redevelopment plan for downtown, contributing the parking garage, but that plan never materialized. It was delayed by the 2000-2001 recession, but now it is doubtful that it can ever succeed because the City has approved large amounts of retail space in west Lawrence at 6th and Wakarusa and at 6th and the SLT. The shopping centers and downtown are all competing for the same tenants. The retailers are aware of the slow pace of growth in retail spending in Lawrence and will enter into the market only to the extent that they will be supported by this sluggish growth or can capture spending away from existing stores. This means that only part, and definitely not all, of the development can succeed. The blight is spreading. It was confined to North Lawrence, but now “dead malls” and underperforming shopping centers can be found throughout the city. These poorly performing retail centers tend to receive little maintenance. They become liabilities rather than assets to their surrounding neighborhoods. We need only look at Topeka to see what happens if this overdevelopment process is allowed to continue for too long.<br /><br />Planning for the growth of retail space is hardly “farfetched” as Gurley states. Rather, pacing the growth in supply is a good way for the citizens of Lawrence to protect themselves from the overbuilding and blight that has plagued so many other cities when the developers are left to their own devices. Only the City, not the developers or the builders or brokers, can bring discipline to the development process and ensure that the pace of growth of space does not exceed the pace of growth of demand for that space.</span></p>Kirk McClurehttp://www.blogger.com/profile/05289172523302036414noreply@blogger.com0