Memorandum

City of Lawrence

City Manager’s Office

 

TO:

David L. Corliss, City Manager

CC:

Diane Stoddard, Assistant City Manager

 

Cynthia Wagner, Assistant City Manager

FROM:

Britt Crum-Cano, Economic Development Coordinator

DATE:

April 3, 2014

RE:

2013 Annual Report: Economic Development Support & Compliance (Draft)

 

Staff has completed a draft 2013 Annual Report: Economic Development Support & Compliance, to be forwarded to the Public Incentives Review Committee (PIRC) for review and recommendation to the City Commission.  This annual report examines the progress of companies receiving tax abatements from the City of Lawrence and includes information on other active economic development programs currently sponsored by the City, including NRAs (Neighborhood Revitalization Areas), TIFs (Tax Increment Financing districts), TDDs (Transportation Development Districts), and other support programs.

The below are highlights from the 2013 report:

 

Tax Abatements:

Three Lawrence companies had active tax abatements in 2013: Amarr Garage Doors, PROSOCO, and Grandstand Sportswear and Glassware (Screen-It Graphics).  All met compliance measures as per performance agreements signed with the City.  In summary, the companies have made over $7.8M million in real property and over $10.3M in personal property investment, created 223 full-time positions (146 projected), and paid an average full-time wage of over $40,700 ($30,208 projected).

 

Based on the portion of property receiving an abatement, the three companies receiving a tax abatement paid a combined $376,711 in property taxes out of a total $535,235 due in 2013 ($158,524 abated). 

 

Two companies/projects had tax abatements authorized in 2013, but were under construction in 2013 and therefore did not receive a tax abatement for that year:  Sunlite Science & Technology, Inc. and Rock Chalk Park.

 

Industrial Revenue Bonds (IRBs):  

Five companies had active Industrial Revenue Bonds at the end of the year:  Bowersock, PROSOCO, Inc., 9th & New Hampshire LLC-South Project, Rock Chalk Park, and Neuvant House II.  As a reminder, IRBs are a conduit financing tool with the companies being entirely responsible for principal and interest payments on the bonds. 

 

Neighborhood Revitalization Areas:

During 2013, the City of Lawrence had four approved Neighborhood Revitalization Areas:  8th & Pennsylvania Street district NRA, 1040 Vermont Street NRA, 1001 Massachusetts Street NRA, and 810/812 Pennsylvania Street NRA.  Two properties received an NRA rebate during 2013: 720 E 9th Street and 1040 Vermont Street.  Since the 810/812 Pennsylvania Street project (Cider Building) was under construction during 2013, the first rebate will be for taxes levied in 2014.  Although approved, the 1001 Massachusetts Street NRA (Masonic Temple) had not yet proceeded by year’s end.

 

Tax Increment Financing Districts (TIF):  

The City currently has three TIF districts: The Downtown 2000 TIF district, The Oread TIF district and the 9th & New Hampshire TIF District

·         The Downtown 2000 Redevelopment TIF District was created to support the development of the parking garage at 10th and New Hampshire and other cultural, commercial, office, and apartment developments.  At the end of 2013, approximately $3.94M million remained outstanding on the bond debt (approximately $8.6 million). 

In January 2012, the City Commission authorized a 10 year, annual reimbursement of TIF revenues generated from the original Downtown 2000 Redevelopment District (approximately $28,085 each year) to be paid for developer-paid public improvements made to 901 New Hampshire, a mixed-use retail/office/apartment project located within the district.  The 1st annual reimbursement was paid in 2013 for taxes levied in 2012.

·         The Oread TIF District was created to help fund public improvements supporting the multi-level lodging, hospitality, and business venue at 12th and Oread.  Public improvements to streets and infrastructure, including a parking garage, were financed initially by the developer and are reimbursed annually through both TIF and TDD revenues generated within the district.  The district began generating TIF revenues in 2009.  At the end of 2013, the district had generated TIF revenues from sales tax and incremental property tax of approximately $1,722,500 to date.

·         The 9th & New Hampshire TIF District was created in 2012 and includes two project areas: South and North.  As of the end of 2013, the South Project area was under construction and construction had not yet proceeded on the North Project area.

 

Transportation Improvement Districts (TDD):  

Currently, the City has three authorized TDD districts:

·         The Oread TDD District (located at W. 12th Street & Oread Avenue) began generating sales tax revenues in 2009.  At the end of 2013, the district had generated approximately $430,811 to date in TDD revenue.

·         The Free-State (Bauer Farm) TDD District (located at West 6th Street and Wakarusa Drive) began generating sales tax revenues in 2009.  At the end of 2013, 52.5% of the buildable area within the district was occupied, generating approximately $214,000 to date in TDD revenue.

·         The 9th & New Hampshire TDD District was created in 2012 and includes two project areas: South and North.  As of the end of 2013, the South Project area was under construction and construction had not yet proceeded on the North Project area.

In all TDD districts, public improvements are financed initially by the developer and are reimbursed annually via a one percent transportation district sales tax on retail or taxable services occurring within the district.

 

Other Economic Development Programs:

The City also participates in non-traditional support programs to help initiate and support economic development within the community.  The programs supported in 2013 include:

 

·         Employee Training Incentives—Argenta

·         Economic Development Services—Bioscience & Technology Business Center (BTBC), Lawrence Chamber of Commerce and KU Small Business Development Center.

·         Neighborhood Infrastructure—East Lawrence Historic District, Phase II (8th & Pennsylvania area)

·         Expansion & Relocation Grant/Loan—Grandstand Sportswear and Glassware.

·         Shared Infrastructure & Fee Rebates—Rock Chalk Park

 

Recommended Action

City commission to receive the draft 2013 Annual Report: Economic Development Support & Compliance and refer to PIRC for review and recommendation.