Lawrence city commissioners on Tuesday voted to approve tax breaks for a security company to redevelop a downtown building to use as its office space.
Alarm.com seeks to redevelop the building at 714 Vermont St., which was formerly home to Climb Lawrence. The climbing gym closed its doors in May.
The building’s potential 13,834 square feet of office space would provide enough room for Alarm.com’s roughly three dozen current employees, plus an additional 30 positions associated with the proposed expansion, according to the meeting agenda item. The positions’ average salaries are estimated at approximately $90,000 annually.
Developers had asked the city to create a Neighborhood Revitalization Area that would provide a 95% property tax rebate for 15 years, as well as industrial revenue bonds to receive sales tax exemptions for construction materials.
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However, “Following review of the project, redevelopment costs, adaptive reuse considerations, and financial analysis,” city staff members are recommending the NRA be for an 80% property tax rebate for up to 10 years.
Brendon Allen, senior director of software development for Alarm.com, told commissioners that the company looked at possibly moving to west Lawrence, but employees want to come to Lawrence to be downtown.
Commissioners heard from two people in favor of the incentives and three people who were opposed.
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“It would be nice when you guys approve this — and I’m sure you will — to explain to all the downtown business owners why some people get incentives and some people don’t,” Courtney Shipley, Lawrence resident and former city commissioner, said during public comment. “There are people who created the downtown area, they’ve given their blood and sweat for it, and they’ve never asked us for a single thing, except to patronize their business.”
Mayor Brad Finkeldei said that as a downtown office user for his day job who has been looking for a new space, it’s difficult to find Class A office space downtown.
Finkeldei said the incentive is because this is a revitalization, and there will be a value increase to the property. He also said he thinks Mass Street should be for retail businesses, and keeping office buildings off of the main stretch, but still downtown, was preferable.
“I think the great thing about an NRA is the existing tax base remains the same, and you’re incentivizing them to create that increased incremental value,” Susie Carson, the city’s director of economic development, told commissioners. “Just doing maintenance on a building doesn’t necessarily create that value, so we are encouraging people to actually diversify the tax base on the commercial side.”
“Based on current assessed valuation assumptions, the 2025 City mill levy, and an assumed 3% annual valuation growth rate, the City of Lawrence’s estimated portion of the NRA rebate over a 10-year term at 80% is approximately ~$162,000,” according to the meeting agenda. “Actual rebate amounts would vary based on future assessed valuation changes and mill levy adjustments.”
Developers also sought industrial revenue bonds for sales tax exemptions on construction materials. The IRB is estimated to cost the city about $4,100 in sales tax revenue, according to the agenda.
Commissioners unanimously approved the 80% abatement for 10 years, as well as the IRBs.
Finkeldei said it would be possible to create an NRA for an entire downtown district, and commissioners indicated they might be interested in learning more about that.
“It’s based upon increasing your value and putting the money in, and so — again, for another date — there is some question about if you do that, what do rents look like downtown? And landlords get the rebate, … and then they raise the rent, and then you have rent issues,” Finkeldei said. “There’s some studies on how NRAs work, and if they accomplish what you want, especially as it relates to tenants.”
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Mackenzie Clark (she/her), reporter/founder of The Lawrence Times, can be reached at [email protected]. Read more of her work for the Times here. Check out her staff bio here.
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