Memorandum

City of Lawrence

City Manager’s Office

TO:              David L. Corliss, City Manager

CC:               Diane Stoddard, Assistant City Manager

FROM:          Roger Zalneraitis, Economic Development Coordinator/Planner

DATE:           May 10, 2010

RE:               Response to letter from Matthew Gough on New Policy

On May 7^th, the City received a letter from Matthew Gough regarding the City’s efforts to adopt a new Community Improvement District (“CID”) Policy.  In addition to pointing out the benefits of a CID, Mr. Gough made several recommendations for changing the CID Policy.  These were: Redrafting the language in three paragraphs; adding a new section to expand on criteria eligibility for a CID; and lowering the application fee.

Redrafted Language

Mr. Gough would like to see the language revised in three paragraphs.  Two revisions would be in Section Two.  Section Two provides the criteria for which a CID project will be considered.  The first paragraph speaks to redevelopment.  Mr. Gough appears to be concerned that the term “redevelop sites” may suggest only demolition of existing buildings.  He recommends changing this by adding “rehabilitate, or substantially remodel.”  However, the language in this paragraph is standard language that can be found in other City policies, such as the TDD policy.  Staff does not believe the language as it exists discourages or disallows refurbishment of existing buildings.

In the second paragraph of Section Two, Mr. Gough believes that “unique” provides too much of a limitation on potential projects and would like to see the paragraph rewritten as “unique or quality”.  Again, however, the language in this paragraph is consistent with the language in other City economic development policies.  Additionally, staff does not believe that the term “quality” offers sufficient assurance that CID will not be overused.  Staff recommends retaining the language as is both for consistency across policies and to ensure that incentives such as a CID have more targeted guidelines.

Finally, Mr. Gough believes that Section Seven may restrict the Governing Body from deviating from the CID Policy in any way.  However, Section Seven is standard language that the City uses to acknowledge the exact opposite: that with the exception of procedures and State law, the Governing Body has the right to deviate from any other portion of a policy as written.  The language in Section Seven is also very similar to the language found in other city’s ordinances on economic development issues.

New Paragraph

Mr. Gough also recommends adding a new paragraph to Section Two that will allow the Governing Body to use “any other criteria” it deems relevant in establishing a CID.  Staff believes that such language would be redundant with Section Seven, discussed above.  Further, policies are intended to offer guidelines for both Staff and potential applicants to evaluate projects.  Such a paragraph would not provide assistance to either staff or potential applicants when evaluating city policy toward the establishment of a CID.

Application Fees

Finally, Mr. Gough believes that the application fee should be lowered from $2,500 to, perhaps, $1000.  He cites Hays as an example of a low application fee.

Currently, at least five cities in Kansas have CID policies- Hays, Salina, Wichita, Olathe, and Shawnee.  Of these five cities, three of them- Wichita, Olathe, and Shawnee- have $5,000 non-refundable application fees.  Salina has a $2,500 non-refundable application fee.  Hays has a $250 non-refundable application fee, and a $4,750 refundable application fee.  

It should be noted that last week, Lawrence staff was contacted by city staff from Hays.  Their staff suggested that our application fee might be too low.  The first CID in Hays used the entire refundable portion of the application fee and $300 more in addition.

Effectively, then, only one City has an application fee equal to Lawrence’s, and that is Salina.  Based on comments from Hays, it would be more prudent to raise Lawrence’s application fee than to lower it.  Therefore, staff would recommend either keeping our application fee as is, or raising it.