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Committee recommends $82K tax break for Borders building project, but votes against $830K tax rebate

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Post last updated at 11:11 a.m. Thursday, June 15:

A city committee voted Wednesday in favor of one tax break for a project to redevelop the long-vacant Borders bookstore in downtown Lawrence, but against a much larger tax incentive that First Management Inc. had requested.

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First Management plans to remodel the building at 700 New Hampshire St. into corporate headquarters. The company seeks Industrial Revenue Bonds for a 100% sales tax exemption on construction materials for the building, and a 15-year, 90% Neighborhood Revitalization Area (NRA) rebate.

The Public Incentives Review Committee voted 4-1 Wednesday to recommend approval of the IRB. According to agenda materials, that amounts to a value of about $82,000. 

Committee members, who voted on the IRB and the Neighborhood Revitalization Area (NRA) rebate separately, voted against recommending the NRA rebate on a 3-2 vote. That was valued at about $830,000, according to reports in the meeting agenda. 

PIRC members Brad Burnside, Patrick Kelly, Kate Lorenz and John Mathews voted in favor of the IRB, with Christina Gentry opposed; Burnside and Mathews also voted in favor of the NRA, with Kelly, Lorenz and Gentry opposed. 

August Rudisell/Lawrence Times The former Borders bookstore at 700 New Hampshire St.

Doug Compton, founder of First Management Inc. and First Construction, spoke to the PIRC, joined by company president Robert Green and Brandy Sutton, director of operations. They said the redevelopment of the building was necessary because they’ve seen unprecedented growth, and the former Borders building would allow space to bring all the company’s employees under one roof. 

The company also anticipates adding seven new full-time positions with an annual pay range of $90,000 to $120,000, and 14 new full-time jobs paying $50,000 to $70,000 annually, according to the agenda materials. Sutton said without the move into the new location, the company wouldn’t have room to add more employees. 

Kelly asked the group whether the Borders building was their only option. 

“It’s the only option we’ve been able to locate that would be feasible to retain all staff in one location,” Sutton said. 

During public comment, some speakers mentioned that Compton said he had owned the building since 2011, and it has been vacant since. Though projects — including a grocery store with upstairs apartments — have been proposed for the building over the years, none has come to fruition. 

“If we approve this, what we’re really doing is rewarding this applicant for allowing the building to deteriorate for the last 13 years,” said Barry Shalinsky, who lives nearby. 

Public Incentives Review Committee members meet on June 14, 2023. (Screenshot / City of Lawrence YouTube)

Kelly, who voted against the NRA, said he agreed with that point, and that was a “hard stretch” for him. He also said he thought there was probably an existing property that could be used, and the company was asking for a lot of money from both the City of Lawrence and Douglas County. 

In addition, “While I appreciate the new jobs, I did not hear in the presentation and response they gave me enough comfort that these new jobs won’t happen unless the expansion happens to this place,” Kelly said. 

Gentry, who opposed both tax breaks, asked the company about negative reviews the company had received online from people who had leased apartments from First Management. She said she thought it was fair to ask what the company is doing to train agents to make sure they’re building strong relationships with people who live in their buildings and being good public relations initiators in the community. 

“I feel like renters have rights to understanding how their leasing agents are going to be treating them and understanding that this is a property that they’re building into,” Gentry said.

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Sutton said staff members at the corporate level try to reach out to property staff when they see negative reviews and try to resolve it. She said they also use maintenance surveys to see if they’re meeting client expectations. 

“We’re not just here to take their rent. We’re here to make them have a good and happy living experience,” she said. 

Compton said the company has “made a mistake here and there.” 

“But I don’t think we’d be as successful as we’ve been over the last 35 years, and 100% occupied right now, if we weren’t taking care of our customers, or our residents,” he said. 

The committee also voted to recommend approval of an IRB request from Heartland Community Health Center to aid in building a health center expansion. 

The building, which would be adjacent to Heartland’s main building on Sixth Street, would house Heartland’s psychiatric and behavioral health services, and an administrative space on the second floor, according to agenda materials. The nonprofit also estimates that the expansion will also allow creation of 17 new full-time jobs, 11 of those within the first year.

Heartland seeks a 100% sales tax exemption for equipment during the length of construction, which is estimated to cost around $62,000 for city sales taxes, and $50,000 and $260,000 in county and state sales taxes, respectively. 

PIRC members consider items for recommendation, but they do not give final approvals.

The projects will advance to the Lawrence City Commission. Heartland’s IRB request will be on the commission’s Tuesday, June 20 agenda, and the public hearing on First Management’s request is scheduled for the commission’s Tuesday, July 11 meeting, according to Sam Camp, economic development analyst for the city.

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Caroline Zimmerman (she/her) interned for The Lawrence Times in May – August 2023. She has also covered crime and public safety for the University Daily Kansan, and the Eudora City Commission for the Eudora Times.

Follow her on Twitter. Read her work for the Times at this link.

Mackenzie Clark (she/her), reporter/founder of The Lawrence Times, can be reached at mclark (at) lawrencekstimes (dot) com. Read more of her work for the Times here. Check out her staff bio here.

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