Post updated at 11:15 a.m. Friday, Dec. 13:
The University of Kansas is looking for a lot of tax breaks to make the $759 million Gateway District project a reality, but the chancellor’s office anticipates billions of dollars coming back to Lawrence in the long term.
Chancellor Douglas Girod and CFO Jeff DeWitt shared an update on the project and its second phase on Wednesday. Here’s a quick look at some of the key points.
See links to previous coverage of the project below this article.
What was Phase 1 again?
The first phase of the project includes the west and north sides of the stadium, a 55,000-square-foot conference center and a renovation to the Anderson Family Football Complex. That’s on track to be completed in August, and KU football’s home games should return to Lawrence in the upcoming season, if all goes as planned.
The Jayhawks played their home games at Children’s Mercy Park and Arrowhead Stadium in Kansas City this year.
The approximate price tag of the Phase 1 construction is $448 million.
What’s included in Phase 2?
Parking, student housing and a hotel, among other things. It also includes the south and east sides of the football stadium.
The second phase of the project is slated to include almost 450 student housing beds; a 162-key full-service hotel topped by 16 condos; 43,000 square feet of retail, restaurant and office spaces; and an outdoor event plaza.
The existing 361 parking spaces will be replaced with 1,000 or more, according to the presentation. That’s intended to assuage neighbors’ concerns about already-tight parking situations near campus, though if each student housed there and each hotel guest is parking a vehicle, that would leave around 400 spots for the rest of the district.
The estimated cost of Phase 2 is $311 million, according to the update.
Where will the money come from?
A lot of the $759 million total for both phases of the Gateway District is coming from donors, according to the update.
About $346.1 million is coming from KU Endowment and university fundraising. Another $115 million is coming from Kansas Athletics debt to be paid incrementally with revenues from the stadium, and $85 million came from ARPA (federal COVID-19 relief) funds from the state.
The private developer would spend an estimated $126.2 million on the hotel, housing, retail and office space. DeWitt said KU is in negotiations with Edgemoor Infrastructure and Real Estate and Sunflower Development Group as partners. Altogether, those funds constitute about 88.6% of the budget, according to the update.
KU is planning to ask for a total of $86.7 million in economic development bonds, including sales tax and revenue bonds, or STAR bonds; sales tax exemptions for construction materials from the county and city; and property tax breaks from the city. Altogether, about 11.4% of the Gateway District budget would come from state and local tax breaks, according to the update.
An additional community improvement sales tax of 1.5% in the district would provide for the sales of $15.1 million on bonds, according to the update.
KU will bring its requests for city tax breaks to the Lawrence City Commission soon. The commission on Tuesday, Dec. 17 will consider accepting an application from KU and allowing the city manager’s office to draft an agreement for the commission to consider at a later date. The public will have the opportunity to comment on the requests.
DeWitt said KU will offer to pay for the City of Lawrence to hire a financial adviser to look at the project.
How could it benefit the city?
As Girod and DeWitt see it, the prospects for the conference center, hotel, restaurants, retail and office space are big. They also think the district will be attractive to prospective KU students.
They anticipate 200-plus events each year at the stadium and conference center. That could include sporting events, concerts, trade shows and more. And out-of-town guests who come to those events could benefit local businesses in downtown Lawrence and beyond.
All land owned by the university is property tax-exempt. Private developers, however, would have to pay property taxes, which would create new revenues for the state, county and city — KU estimates $8.5 million over 20 years for the city, county and state, and $5.7 million to schools.
They anticipate $1.4 billion in net new direct spending in the form of salaries of employees who work in the district, and induced spending of $550 million, or those workers spending their money, over the next 20 years.
See the full update video and slides via the chancellor’s website at this link.
If our local journalism matters to you, please help us keep doing this work.
Don’t miss a beat … Click here to sign up for our email newsletters
Click here to learn more about our newsletters first
Mackenzie Clark (she/her), reporter/founder of The Lawrence Times, can be reached at mclark@lawrencekstimes.com. Read more of her work for the Times here. Check out her staff bio here.
More about the KU football stadium project:
KU Gateway District update sheds light on parking, student housing, tax breaks and more
Latest Lawrence news:
Molly Adams / Lawrence Times
Molly Adams / Lawrence Times
