Memorandum
City of Lawrence
City Manager’s Office
TO: David L. Corliss, City Manager
CC: Diane Stoddard, Assistant City Manager
FROM: Britt Crum-Cano, Economic Development Coordinator
DATE: May 28, 2013
RE: 2012 Report: Economic Development Support & Compliance
On May 14, 2013, City staff delivered the 2012 Annual Report: Economic Development Support & Compliance to the Public Incentives Review Committee (PIRC). This report annually reviews the progress of companies receiving tax abatements from the City of Lawrence and includes information on other active incentive programs currently sponsored by the City, including NRAs (Neighborhood Revitalization Areas), TIFs (Tax Increment Financing districts), TDDs (Transportation Development Districts), and other economic development support.
During 2012, the City supported the following economic development programs:
Tax Abatements:
Three Lawrence companies received tax abatements in 2012: 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 invested over $17.6 million in real and personal property ($16.8 million projected), created 152 full-time positions (141 projected), and paid an average full-time wage of over $36,000 ($29,800 projected).
Industrial Revenue Bonds (IRBs):
Three companies had Industrial Revenue Bonds that remained outstanding at the end of the year. One IRB paid off during 2012. As a reminder, IRBs are conduit financing with the companies being entirely responsible for principal and interest payments on the bonds.
Neighborhood Revitalization Areas:
At the end of 2012, the City of Lawrence had three active Neighborhood Revitalization Areas: 8th & Pennsylvania Street district NRA (720 E 9th Street), 1040 Vermont Street NRA (Treanor Headquarters), and 810/812 Pennsylvania Street NRA (Cider Building). Currently, only one property has initiated rebate incentives (720 E 9th Street). Both the 1040 Vermont project and 810/812 Pennsylvania Street were under construction during 2012, with anticipated rebates occurring in later years. 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 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 2012, approximately $5 million remained outstanding on the bond debt (approximately $8.6 million).
o 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 is anticipated to be for taxes levied in 2012, with payment made in 2013.
· The Oread TIF District was created to help fund public improvements supporting the multi-level lodging, hospitality, and business venue at 12th and Oread. At the end of 2012, the district had generated TIF revenues from sales tax and incremental property tax of approximately $1,270,000 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 2012, construction had not yet proceeded on either project. It is anticipated that construction on the South Project will commence in 2013.
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 2012, the district generated approximate $321,000 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 2012, a little less than 28% of the buildable area within the district was occupied, generating a total of $141,000 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 2012, construction had not yet proceeded on either project. It is anticipated that construction on the South Project will commence in 2013.
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 2012 included:
· Employee Training Incentives—Argenta, Plastikon.
· Economic Development Services—Bioscience & Technology Business Center (BTBC), Lawrence Chamber of Commerce and KU Small Business Development Center.
· Neighborhood Infrastructure—East Lawrence Historic District (8th & Pennsylvania area)
· Retention Grant/Loan—EMR
· Expansion & Relocation Grant/Loan—Grandstand Sportswear and Glassware.
Actions by PIRC
PIRC voted unanimously to approve the report and pass it on to the City Commission. There was a brief discussion on the report, and this was recorded in the draft PIRC minutes.
Recommendation
Staff recommends the City Commission accept the 2012 Annual Report: Economic Development Support & Compliance.