City of Lawrence

Retail Task Force

June 8, 2010 meeting minutes

 

MEMBERS PRESENT:

Robert Chestnut, Earl Reineman, Leslie Alhert, Allision Vance Moore, Tom Kern, Susan Cook, John Ellena, Diane Oakes

 

MEMBERS ABSENT:

None.

 

STAFF PRESENT:

David L. Corliss, City Manager

Diane Stoddard, Assistant City Manager

Roger Zalneraitis, Economic Development Cord./Planner

Scott McCullough, Planning and Development Services Director

Amy Brown Miller, Long-Range Planner

 

PUBLIC PRESENT:

Hank Booth, Hubbard Collinsworth

 

 

Call meeting to order:

Commissioner Rob Chestnut called the meeting to order at 4:35 pm on Tuesday June 8, 2010.

 

Minutes:

Mr. Kern moved approval of the minutes from the May 4, 2010 meeting, seconded by Mr. Reineman.  Minutes were approved 8-0.

 

Retail Conditions Report:

Roger Zalneraitis provided an overview of his report on retail services in the Lawrence economy.  Roger indicated that the retail sector is stronger here than it is typically nationally.  Only 4 counties in Kansas out of 105 grew in terns of retail sector jobs in Kansas: Wyandotte County, Sedgwick County, Riley County, and Geary County.  He indicated that when adjusted for income, the pull factor for Lawrence did increase slightly.  The largest retail sales category is general merchandise.  He noted that if the City of Lawrence retail sales categories were compared to average retail sales categories from other peer cities, there would exist a surplus in some categories, such as food and beverage, and a deficit in some categories, such as general merchandise.  Roger reported that there was over 200% growth in internet sales over the 2003-2009 timeframe.  The bulk of taxable retail sales in Lawrence, approximately $30 million, is generated roughly on the South Iowa and 23rd Street corridors.  The next highest geographic area was the downtown, or northeast quadrant of the City.

 

Commissioner Chestnut requested a follow up regarding what types of retail stores are included in each category.  Commissioner Chestnut indicated that relative to other cities, Lawrence did not grow in the areas of lodging, furniture and home furnishings, and sporting goods/hobby/books/music.  He thought it would be helpful to look at what stores these categories represent.  He also indicated that it was important to be thinking ahead about how these categories looked in the future.  Mr. Kern thought it would be interesting to see retail sales trends in the other Big 12 cities, compared to Lawrence. 

 

Mr. Ellena indicated that his desire was to focus on what Lawrence was doing well in, rather than focusing on the areas in which Lawrence has deficiencies.  Mr. Reineman indicated the growth and dominance of category killers, such as Dick’s Sporting Goods, or Nebraska Furniture Mart, has made an impact on independent retailers, but that those stores also attract people from a larger area.  He thought that the way that Lawrence was situated geographically would make it a challenge to attract some of these category killers and that the category killer was represented somewhat by those retail categories that were underrepresented in Lawrence.  He suggested the geography was a possible factor. 

 

Mr. Reineman asked about the effect of internet sales.  Mr. Corliss indicated that sales are paid locally on internet sales when there is a nexus, or physical location, of that store in Kansas.  Sales taxes are remitted to the state and then distributed back to cities.  Mr. Corliss indicated he would get additional information on this subject.  Ms. Stoddard also noted that a concept to understand is destination sales tax, which ties the sales tax to the delivery of certain merchandise.  For example, when a Lawrence resident purchases furniture at Nebraska Furniture Mart and has it delivered at their Lawrence address, the sales tax paid goes to Lawrence.  However, when someone from Lawrence loads furniture in their vehicle at the store, the sales tax is paid at the point of sale. 

 

Mr. Reineman asked for a snapshot of our lodging industry, specifically occupancy rate and other similar statistics.  Commissioner Chestnut indicated that he thought that the Oread filled a need in this area. 

 

Amy Brown Miller provided an overview of the City’s planning documents related to retail.  Specifically summarized was Horizon 2020, which emphasizes support for downtown as the regional retail center, focusing on nodes of retail at key intersections, and support for commercial design standards.  She also stated that the document indicates that the City maintain an inventory of commercial space, requires a market impact analysis for projects that create more than 150,000 square feet of retail.  In the City’s development code, there is a requirement that a retail analysis be completed for projects that add over 50,000 square feet of retail and that the City staff maintain a database of retail space and update it annually.  Mr. Kern asked why there was a difference between the two documents.  She indicated that it is because the documents were approved at different times.  It was noted that these were key issues of debate in the community over the past decade.  It was noted that the last retail inventory analysis was done in 2007 for the fiscal year 2006.  Commissioner Chestnut indicated that relative to our peer communities, our general merchandise was not growing at a similar rate and that there are hurdles that have likely impacted that area.  Mr. Reineman indicated that these regulations were meant to avoid the “donut” effect that some other cities suffer from.  However, he questions what hurdles have been either protectionists against existing retailers, or have stopped a retailer from moving to town. Mr. Kern indicated that recently Landplan did three identical CVS stores in Manhattan, Lawrence and Kansas City, Kansas.  Lawrence was the highest cost area.  He said that costs area factor when locating a business.  Mr. Reineman indicated those were things to look into, but they also look at market demand, which may affect our ability to get certain businesses. 

 

Commissioner Chestnut suggested July 6 as the next meeting date.  It was suggested to move the meetings up to 4:00 pm, rather than 4:30 pm.  Mr. Reineman indicated a desire to know from staff or others what we have that is a deterrent to development. 

 

The meeting was adjourned at 5:50 p.m.  The next meeting is set for Tuesday, July 6 at 4:00 pm.