PC Minutes 4/19/06

 

ITEM NO. 19G:  TA-03-02G-06:  Text amendments to 20-1107 regarding standards for Market Impact Analysis as part of site plan or zoning process.

 

Staff Presentation:

 

Amy Miller, Planning staff, presented a brief overview of the changes being considered, specifically comparing the original language developed by Development Strategies Inc. to the proposed text developed by an ad hoc committee to the Planning Commission. Staff also reviewed a memo, dated April 17, 2006, that suggested changing the language of the last paragraph to read:

“Additionally, the market impact analysis is not intended to regulate the specific types of businesses proposed, but coupled with information maintained by the Lawrence Douglas County Planning office, should be used to identify underserved retail sectors and provide compelling rationale for attracting retail businesses to satisfy this market demand.”

 

Ms. Miller presented the Commission with four options for action:

         

Option #1 is to recommend the ad hoc Committee’s alternate language with the proposed staff change to section 20-1107 (e) as outlined in the memo dated April 17th be approved.

 

Option #2 is to recommend the ad hoc Committee’s alternate language without the proposed staff change be approved.

 

Option # 3 is to recommend the alternate language as prepared by staff be approved. This option is for striking sections (c) and (d) from the original text that was developed by Development Strategies and adopted with the November 11th version of the development code. This leaves the discussion of criteria and responsibilities to a future date.

 

Option #4 is to take no action on the proposed text amendment.

 

PUBLIC COMMENT 

 

There was no Public Comment

 

COMMISSION DISCUSSION

 

Comm. Haase requested staff provide a brief history of the enclosed mall proposed in the 1980’s, the criterion that was used to prevent that from being built, and the bases of the comprehensive plan that supported that. 

 

Ms. Finger stated that the requests started in 1987, and the basis for the decision in the court case was the language in the comprehensive plan (Plan 95), which said that the downtown was the commercial heart of the community.  She said that when Horizon 2020 was being developed, there was no longer a clear community consensus on what the primary commercial center was, but there was still a clear consensus on what the heart of the community was; the downtown.  Ms. Finger also stated that the concern wasn’t just the downtown anymore, but the other smaller commercial corridors and the impact of large-scale commercial development on them. 

 

Comm. Eichhorn asked staff if the text amendment was adopted, if it would free up time and people in answering questions from the developers because they would have a certain path to take before they started to ask questions, and whether it would also smooth out the process from the developer’s point of view.

 

Comm. Lawson asked staff to comment on the difference between Horizon 2020 requiring that commercial developments with more than 150,000 square feet be reviewed versus the proposed language moving that threshold to 50,000 square feet.

 

Ms. Finger replied that it was a suggestion from Development Strategies, Inc. and that it was designed to set a low threshold that would also apply to larger building developments that are done in phases.   

 

Comm. Lawson expressed concern that if a project did not pass the “under 8% vacancy rate test”, then the project would not be approved.

 

Ms. Finger replied that is the way it is written, presently, but that it could also result in phasing of the project for absorption.

 

Comm. Lawson questioned what the benchmark costs are that are associated with these studies and whether these costs would be known to the developer before the project begins.

 

Ms. Finger replied that she has seen estimates that range anywhere from 1,000, to 10,0000 to 20,000 dollars. She also replied that if you’re the applicant and you’ve been in the market before, then you should be familiar what that range should be.  If this is a new venture for you then it will be a cost not anticipated. 

 

Comm. Lawson asked what would be the typical timeframe for a project and Ms. Finger replied that if the database were maintained on a regular basis then it should not add additional time to the application process.

 

Comm. Lawson wanted to know if the studies take into account the retail sales in the other areas of the county or are they strictly focused on Lawrence. Ms. Finger replied that the analysis was primarily based on Lawrence figures, but comparisons were made in the current DSI study to similarly sized cities.

 

Comm. Jennings inquired whether these requirements would restrict specific products and Ms. Miller responded that staff provided alternate language that specifically states that this is not the intent of the text.

 

Comm. Haase stated that he supports what staff has written because it does embrace the intent.  He also stated the aggregated sales tax information was originally intended to assist in recruiting retail businesses that are underserved in Lawrence and that this proposal is all about developing information and not imposing decision rules. 

 

Comm. Burress expressed concern that the proposed language could prevent the Commission from restricting certain uses in a planned development.

 

Comm. Jennings expressed concern that we are not taking into account sales tax that is lost due to people leaving town to purchase goods elsewhere. He also stated that un-leasable space should not be used as an argument for not allowing new retail square footage to be built, thus we should not rely solely on an 8% vacancy rate threshold. He also stated that we just filled our last 400,000 square foot corner, and therefore has concern that this impact analysis would not affect very many projects. 

 

Comm. Haase responded by saying that part of the analysis is to develop retail areas that are underserved and by trying to attract those businesses, it would naturally result in a higher capture rate.

 

Comm. Jennings stated concerns that a 50,000 square foot threshold was low and would be difficult to evaluate.  He also stated that this process would make it less attractive for existing businesses to make improvements.

 

There was Commission discussion with regards to whether an existing business could add an additional store, and whether they would then have to complete a Market Analysis. Comm. Haase responded that the intent it get the city database up and running and hopefully some projects could be approved administratively.

 

Comm. Erickson stated that she thought the Commission should move forward with some code language because of the importance of protecting the downtown area.

 

Comm. Haase was surprised by the strong opposition from the Chamber of Commerce, however Comm. Burress was not, given the misinformation presented in the newspaper.

 

Comm. Jennings expressed his opinion that he was in favor of option three because he felt that there is an attitude where the Commission is looking too much at the numbers.

 

Comm. Ermeling stated the intent is not to stifle development, but we need to get data and then use that objectively to make our decisions.

 

Comm. Eichorn stated that he was concerned that if this section of the code were left in limbo, that would put additional demands on Staff. Comm. Haase responded by reminding the Commission that the City Commission made it clear with the Northgate project that they would like to have some analysis in place.

 

ACTION TAKEN

Motioned by Comm. Burress, seconded by Comm. Haasee to approve the Text Amendment to HORIZON 2020, Option 1, as presented, and forward it to the City Commission with a recommendation for approval.

 

 

Motioned by Comm. Krebs, seconded by Comm. Haase to amend the motion to add “overserved” wherever “underserved” is seen in the report in order to be clear that the Commission is looking for both pieces of information.

 

Discussion on the Motion:

 

Comm. Krebs stated that the intent was to clear up confusion and make it clear that the Commission is looking for both pieces of information.  There was Commission discussion as to whether changing the language would change the intent.

 

Action Taken:

 

Motioned by Comm. Krebs, seconded by Comm. Haase to amend the motion by leaving the word “underserved” (without overserved), and following option #1 as presented.

 

Motion carried 7-3, with Eichhorn, Erickson, Ermeling, Burress, Harris, Haase, Krebs, voting in favor.  Lawson, Jennings, and Riordan voted in opposition.

 

Comm. Lawson stated his concern that this moves us on a slippery slope to a planned economy.

 

ITEM NO. 20:           ADOPTION OF STANDARDS FOR RETAIL IMPACT STUDIES                                               (AAM)

 

 

Overview:

 

The Ad Hoc Committee on Retail Impact Studies developed a set of “Standards for Retail Impact Studies” to act as a set of operating procedures that will guide analysis of retail market studies to be completed by City Staff for Lawrence as a whole, as well as independent retail market studies completed by developers of individual projects. These standards are designed to provide guidelines for the analysis of retail impact studies based on certain numerical indicators, as set forth in Horizon 2020 Chapter 6, Policy 3.11 and the proposed New Development Code, Chapter 20, Article 11.

 

Analysis of Standards:

 

With regard to Section V, Specific Materials of the standards memo, staff will disaggregate (separate into component parts) sales tax data to the legal extent possible based on geographical district and North American Industry Classification System (NAICS) sector for Lawrence, Kansas. In addition staff will, under Section V, Number 3, develop data based on total retail sales tax collected for the year not only for Lawrence, but for Kansas as a whole, where possible. This data will then be used, along with disposable or personal income figures to calculate a ratio of sales tax to disposable income for Lawrence and the State of Kansas as a whole. In addition, a location quotient (a ratio that compares the local economy to a larger economy) of sales tax for the NAICS sector and the region divided by all sales tax for the region (for both Lawrence and Kansas) will be computed. Other calculations will be conducted by staff as set forth in Sections III and IV, such as vacancy rates and ratios of sales tax per square foot to assist staff in monitoring conditions and developing trend data.

 

Section V of the standards memo outlines that all indicators should also be projected out to the 5 and 10 year future marks. The projection of the indicators will need to be researched and modeled in order to determine which models provide the best fit to the data. In some cases, it may not be possible to reliably project some indicators.

 

The interpretation of the materials section outlined in the standards memo provides thresholds for determining market stress based on the above analysis. In reference to Section VII, Additional materials, staff will correct all income and sales tax data collected for inflation if it occurs in the previous year.  Staff will also investigate the use of a set of multipliers, specific to each NAICS code, that convert sales tax revenue to total sales, as well as a set of parallel comparison data for other cities, however these explorations are not included in the estimate of staff time provided under the proposed alternate code language.

 

Conclusion:

 

These guidelines should be considered for adoption if the amendments to Section 1107 of the proposed New Development Code (Chapter 20) are approved. These are designed to guide interpretation of the analysis of such market studies and should work in conjunction with Article 11 of the Code.

 

COMMISSIONER BURRESS:  The proposal is a policy of the planning commission.

 

No public comment

 

COMMISSIONER BURRESS:  If we adopted this it would but us at the cutting edge.

 

COMMISSIONER KREBS:  Suggestion for changes—On II. 7, last sentence, there should be an ‘S’ added to “commissioner”.  On the second page IV. 2, CBD should be spelled out.  In section IV. 3, “city staff should develop annual time series”, I don’t know what that phrase means. 

 

COMMISSIONER BURRESS:  It means a series of numbers, one per each year over a given amount of time.

 

COMMISSIONER KREBS:  In section 3A “total resale sales tax collected each year”, I think this should say “in Lawrence”.

 

COMMISSIONER BURRESS:  It is language you were objectingto earlier in the document.    

 

COMMISSIONER KREBS:  But in section 3B, it is talking about Kansas as a whole.  So could we put in Lawrence in section 3A?

 

COMMISSIONER BURRESS:  It should be in Douglas County. 

 

COMMISSIONER KREBS:  In section IV. 3, another acronym needs to be spelled out.

 

 COMMISSIONER EICHHORN:  This may fall under a good midmonth topic. 

 

COMMISSIONER ERMELING:  Can we get a short synopsis from Commissioner Burress.

 

COMMISSIONER RIORDAN:  Would like to get more information about this than what I will learn from a short synopsis. 

 

COMMISSIONER LAWSON:  I agree with the Chairman.

 

Motion to table Item 20 and to have a midmonth meeting about this item no longer than 6 months from now, that would be November when we have a sunset by Commissioner Eichhorn.

 

COMMISSIONER BURRESS: I object to having that long of a time period before we have some kind of discussion.  We should put this into place before it takes effect in June. 

 

COMMISSIONER HAASE:  This is not being proposed as text amendment, it’s a work in progress.  If we delayed this 6 months, the members of the Planning Commission will not do much research with respect of what is contained in here.  I could support delay of 2 months, but no longer than that.

 

COMMISSIONER EICHHORN:  I suggested a sunset, which means we could go faster than 6 months. 

 

COMMISSIONER ERMELING:  I agree that we need a closer deadline.

 

COMMISSIONER RIORDAN:  We should have a dedicated session of this no later than June.  We could add a session, or bump what is scheduled for June already.  Put it on June 14th, 7:30am-9:00am.

 

COMMISSIONER HAASE:  When you say sunset, to me that means we need to pass something today, and then at some date it expires if no further action has been made to keep it alive.  We are not proposing a sunset date, but a date to take action.

 

COMMISSIONER HAASE:  Is it appropriate to add the instruction that members of the planning commission be encouraged to review this document and submit questions ahead of time?  This is difficult material, and I think there are areas that most people that don’t have an economics background would like some clarification.  If we could get that rolling before the meeting, it would help the meeting go much smother.

 

COMMISSIONER LAWSON: How should we do that?

 

COMMISSIONER HAASE:  To email the acting planning director and David could be in assistance in clarifying some of this stuff.

 

Motion to amend to study this in June and put this on June agenda for action by Commissioner Burress.  Seconded by Haase.  (This is accepted)

 

(Vote on original motion by Commissioner Eichhorn 10-0)

 

Miscellaneous items

 

COMMISSIONER HAASE:  Is everybody aware of the Federal Highway Administration and the SLT issue?  Federal money has been proposed to come into the project as such that Federal Highway Administration has to undergo a review for the proposed 32nd Street alignment because the Baker Wetlands is under consideration as a heritage area.  What the Federal Highway Administration is charged to do is the 4F process to evaluate if there is a prudent alternative.  The discussion heating up regarding the eastern bypass is going to trump the SLT.  We should draft an input to this process. 

 

MS. STOGSDILL:  Do you want this to be put on the May agenda as a discussion item?

 

COMMISSIONER HAASE:  Yes, and we don’t have a lot of time to do this.  We have the end of May to submit something.

 

COMMISSIONER LAWSON:  Does the City Commission have any intent to put in any formal input?

 

COMMISSIONER HAASE:  They already have.  They sent a letter saying that they have to find a route other than 32nd street that goes through Baker Wetlands.

 

Adjourn April Meeting—10:15pm