Lawrence school board approves tax breaks for Turnhalle building revitalization; no cost to district

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The Lawrence school board on Monday approved tax breaks for a project to revamp the historic building at 900 Rhode Island St., at no cost to the district.

Turnhalle LLC — owned by local entrepreneur Mashur Zarif Haque — originally requested a 15-year, 85% Neighborhood Revitalization Area (NRA) tax rebate from the school district. With a vote of 7-0, the board unanimously approved a 15-year, 70% rebate, as recommended by district staff.

The historic revitalization project on Lawrence’s Turnhalle building is set to result in a new community space and restaurant. 

Development projects seeking tax breaks must gain approval from the city, county and school district, as the three are the local taxing jurisdictions. State statute requires the district to consider its participation.

Board Past President Shannon Kimball expressed frustration with community backlash she sees when tax incentive requests come before the board. She asked Executive Director of Finance Cynde Frick to confirm whether or not the district loses any of its funding.

The school board last August approved tax breaks for First Management Inc. to renovate the old downtown Lawrence Borders building and last November approved tax breaks for Flint Hills Holdings Group LLC to build affordable housing at 1000 New Hampshire St.

“Every time we’ve had one of these come before the board in the last couple of years, there’s been a lot of assertions that we are financially mismanaging the district by approving these,” Kimball said. “And I just want to make very clear that you do not believe that to be the case.” 

Frick responded that she did not, and she said the district’s taxes will also remain the same. The district’s funding comes from the state and is determined by a formula based on student enrollment, so it would receive the same amount of property tax revenue whether the NRA rebates are approved or not. 

The district’s capital outlay fund could immediately benefit from the growth and value of the revitalized property. According to Sam Camp, economic development analyst for the city, the project’s benefit-cost analysis shows the district will earn approximately $2 for every $1 in the assistance package.

Camp took the board through a brief presentation on Monday. He said the project has means to enhance the local economy.

“The city, just as a whole, where our tax dollars come from is overwhelmingly from residential property, which is an assessed rate lower than commercial,” Camp said. “So the more commercial property that we can bring in that has higher value to the district, to the city, to the county, the less that we have to rely on residential properties, property owners, homeowners to bear the brunt of tax cost.”

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The Turnhalle building, constructed in 1869, is the oldest standing community building in the city, according to the presentation.

“It’s not an exaggeration to say that it’s a miracle that this building is still standing,” said Patrick Watkins, attorney for Turnhalle LLC.

Plans for the project include building a 5,000-square-foot community and event space on the first floor in addition to a 4,500-square-foot commercial kitchen and restaurant space, according to the presentation. The capital investment is estimated at approximately $4.8 million.

Construction will involve structural improvements; window, floor and exterior rehabilitation; and compliance with the American with Disabilities Act.

Turnhalle LLC has also requested an Industrial Revenue Bond (IRB) sales tax exemption on construction materials and labor for the project, as well as a 20-year, 2% additional sales tax through a Community Improvement District (CID) once the building is in use. Sales tax breaks will not affect the school district, however, because schools are financed through property taxes.

Additionally, the company estimates the project will receive approximately $900,000 from State and Federal Historic Tax Credit programs.

The company has already received both the Lawrence City Commission’s and Douglas County Commission’s approval for the 70% NRA rebate. City commissioners will soon consider approving the proposal on a second reading, likely as part of their consent agenda.

View all materials associated with Monday’s presentation attached to the agenda item on BoardDocs. Learn more about the Turnhalle building on Lawrence Preservation Association’s website, lawrencepreservation.org.

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Maya Hodison (she/her), equity reporter, can be reached at mhodison (at) lawrencekstimes (dot) com. Read more of her work for the Times here. Check out her staff bio here.

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Kaw Valley Almanac for April 22-28, 2024

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