Developement will benefit ESU
Michael R. Lane - ESU president
Saturday, October 11, 2008
AS A MATTER of neutrality I try to stay away from issues of political sensitivity whenever possible.
However, there are times when the issue is important to the future of Emporia State University. In those cases, I have the responsibility to communicate the needs of the University. This is the case in the matter of the commercial development proposal at the intersection of 24th and Industrial.
As I begin, I want to address any issue of financial conflict of interest. I have no financial connection with any of the following: the current land owner, the developer, Lowe’s, or any other party to this development. My interest is in the impact of this proposed development on ESU.
I hear from many constituents in the Emporia area that ESU is a very important asset for Emporia and Lyon County. I hear that one of the methods to help our community expand is to grow the university. I concur with both of these opinions. There are several factors in growing the university. I am addressing the internal factors with an internal reorganization and hiring a new assistant vice president for enrollment management. However, there are several community factors that will help us (or hinder us) as we work to expand. In order to bring more students and more faculty members to Emporia, we must have the quality of life to support those additional students and faculty members. The following are some of the important factors which relate to that quality of life for students and staff:
- First, an employer such as any “Big Box” store will offer part-time employment opportunities to our students.
- “Big Box” or destination stores such as Lowe’s bring with them restaurants that our students and staff want in the area.
- Stores with national recognition, whether we like it or not, provide a level of status to our community.
There are also several factors that impact the decision of such a retailer locating in a city. I know the planning commission indicated that there are other sites available. However, it is important to realize that these retailers have elaborate models to identify the best location for their stores and they seldom vary from those models. That is, in part, the reason so many restaurants and other retailers locate near these stores. Developers make decisions based upon traffic patterns and cost. Whatever the availability of sites, this is the one they have selected. I do not believe there is any reason to believe they would consider an alternative site since they have already researched issues impacting location.
The community benefits of such a retailer locating in Emporia are significant. Let’s begin with the fact that the developer has reported that Lowe’s currently tracks sales of approximately $15 million from zip codes in our primary market area. Moving those sales to Lyon County after the implementation of the additional 1 percent sales tax would increase sales tax revenue to Lyon County by $225,000 each year. Those taxes are currently being paid in counties outside this area. Consider the savings in gas for those individuals who currently travel outside the area to shop at Lowe’s. At nearly $4 per gallon and minimally 110 miles for the round trip the savings are likely to exceed $16 for each trip.
Another concern raised is the increase in traffic on industrial and on 24th. It is important to note that one of the primary purposes for commercial development is to bring more people to the community to shop. In other words, increased traffic is the point of the development.
Finally, commercial development is critical to the future of this city. This is the first significant opportunity to attract a major commercial development in several years. Should this effort fail, it might be many more years before any serious developers look at Emporia. Why? I believe we will have the reputation of being unable to deliver on the basic requirements for significant commercial development. This region has succeeded well in industrial development because the agreements reached succeed through zoning and the city commission.
For the good of Emporia State University and for the good of Emporia, I encourage the city commission to approve the requests coming forward regarding this commercial development project at their Oct. 15th commission meeting.
Comments
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Posted by bobsuth (anonymous) on October 11, 2008 at 1:54 p.m. (Suggest removal)
It's not realistic to expect an extra $15M in "capture" from a Lowe's. The Downtown Market Analysis Study shows the total market for L&G and Home Improvement in Emporia to be $25M. That is currently being served by Walmart, Bluestem, Waters, Mark II, and Sutherlands. Mr. Lane's math takes no LOSS in business that other retailers might suffer by a Lowe's into account.
The Buxton Retail survey identifies a strong opportunity in automotive retail, a segment that Emporia loses much more money to other markets. Why is the city doing nothing to attract those businesses? Has anyone examined the potential conflicts of interest around this issue with regard to elected city officials?
The fact that the data comes from Lowe's and Christie is dubious.
Christie has a track record of promising communities more than they end up getting as a way of extracting subsidies. Hays can't service their bonds from Christie's project due to low sales volume. If Christie and Lowe's are so confident in their data, where is the guarantee? Why should Emporia take risks with no risk to Christie?
Mr. Lane ignores evidence that TIF-based retail development generally does nothing to grow overall economic activity or create more net jobs. Why wouldn't an important citizen like him demand a little more from local economic development efforts?
Having a Lowe's is fine, but not in a way that favors one developer and one retailer over another. Ada, Oklahoma refused Home Depot a TIF subsidy and they opened anyway. The notion that Emporia can't attract development without corporate welfare is false. Every current business in Emporia came here without taxpayer giveaways, why can't Lowe's? Mr. Lane's warnings about Emporia's "reputation" are speculative and have no basis in the experience of other communities who have thrived by intelligently and strategically using tax incentives to actually grow their economies. This project is neither intelligent or strategic.
I will also point out that Mr. Lane's remarks do nothing to address the abuse of the condemnation laws this project represents and the threat to private property. Also, neighbors of the project should be heard in their concerns about traffic, noise and the impacts to the appeal of their own property.
These discussions are important. I urge concerned citizens to be on hand October 15th to voice our opinions to city leaders and become more acquainted with the deeper facts.
Posted by justthefacts (anonymous) on October 11, 2008 at 3:34 p.m. (Suggest removal)
I'm confused about the condemnation statement. I was under the impression that the current property owner is a willing participant in this process? Is this not correct? I was also under the impression that there has been research that shows that there is a certain dollar amount represented the amount that Lowes currently collects based on credit card zip codes. That would be easy enough to prove.
Whether I agree with this project or not, I respect members of the community who will speak their minds on the record and put their information out there. I'm sure Mr. Lane would be happy to meet with any of those concerned to share his source of information.
People forget that the University is a major player in this community from an economic development standpoint. We need to work with them just as we would any other industry to help them grow and prosper.
Posted by momus (anonymous) on October 11, 2008 at 5:47 p.m. (Suggest removal)
I think the condemnation comment is referring to the fact that the city must deem a property blighted for the property to be eligible for TIF funding. It's obviously not blighted, so that should be a fun discussion.
Mr. Lane's source of information, evidently, is the same source that's been quoted (Christy) repeatedly, but I can't seem to get my hands on the raw data. I know that we do have two studies (Caplan and Buxton) that directly refute the claim of 26 million being spent from inside our trade area at a Lowes. I also know that we have had people attempt to artificially expand what is considered the Emporia trade area in an attempt to make our disposable income and population look much better than they actually are. The study conducted in between Caplan and Buxton attempted to do that by stating that Shawnee county (among others) was in our trade area (when they obviously are not). Simply put, you don't have a $21 million dollar variation in leakage data within a certain category for a city of our size. Someone isn't being truthful, and I'm guessing that someone is the someone who is trying to sell us something. Make the study, with dollars spent per zip code and the time period in which the study was conducted public, or expect a big heaping helping of disbelief from anyone with a brain.
Posted by bobsuth (anonymous) on October 11, 2008 at 5:53 p.m. (Suggest removal)
Whether or not the property owner is a willing participant, other property owners in other places have seen their property condemned for commercial redevelopment. It sets a bad precedent.
Mr. Christie has not produced any real data to show the zip code sales assertion, which the community at large should be able to see. The figure Mr. Lane cites is OVER HALF of what the Downtown Market Analysis of Emporia's total home improvement market shows. It's not logical that most Emporians' dollars in this category are driving an hour away. The Downtown Market Analysis was an independent study.
And speaking of hard data, why has the Commission not released the results of its Buxton Retail Market Study to the public. Has Mr. Lane seen this?
The University is mistaken in thinking this project will benefit them because it is relying on DJ Christie for its information. It has a responsibility to weigh all the information. Mr. Lane is free to call me at 303-775-2790.
Posted by Penny (anonymous) on October 11, 2008 at 6:40 p.m. (Suggest removal)
Momus, it's Dr. Lane, actually. I believe his advanced degrees and his expertise are in Business. Seems like someone with a brain to me...
Posted by slvrnblck (anonymous) on October 11, 2008 at 9:21 p.m. (Suggest removal)
Dr. Lane makes a good argument for adding Lowes. I still would like to see them come in here because of the "potential" it could bring to the community. Glass half full people will understand that bringing in a willing business to our community could be a very good thing.
I do think we need to tread lightly with Mr. Christie and protect ourselves a little bit. I have heard a lot of disturbing things but it is a lot of hearsay so I am not sure how accurate the info is.
Also, take everything Mr. Sutherland says with a grain of salt. He is the one with the most to lose if Lowes ends up in Emporia. Even if he is attempting to be unbiased, raw emotion will make it tough on him.
Posted by momus (anonymous) on October 11, 2008 at 10:02 p.m. (Suggest removal)
Penny,
Maybe Dr. Lane, with his advanced degrees, can tell us where he saw the actual data that Mr. Christie continues to cite. Otherwise, he is making decisions based on at least one flawed assumption. And, someone with advanced degrees in business, I would think, would wonder why two studies were listing leakage in an entire category between 4-5.7 million while a developer cited data at $26 million. Aren't you at all curious about the descrepency? Who has the most to gain by inflating data? And, if the data is wrong, who has the most to loose?
Posted by create (anonymous) on October 12, 2008 at 6:15 a.m. (Suggest removal)
I wonder why the city commission does not contact the city manager of Junction City to see if the kinds of problems we continue to hear involving Christie are true. What about Pittsburgh? Hays? I know I was not impressed at all with his having to be reminded in a news article that he owed $38,000 in unpaid taxes. He called it a "clerical error." Uh huh.
Hey Gwen, want to write a great news article? Why not interview those city managers regarding any problems they may have had with Christie?
Posted by bobsuth (anonymous) on October 12, 2008 at 9:35 a.m. (Suggest removal)
Before we take Dr. Lane's opinion as definitive, perhaps Emporia should listen to the many other academics who have questioned the value of TIF handouts:
Tax increment financing is usually sold to the public with assurances that ‘TIF does not increase your taxes.’ However, NCBG’s study indicates clear warning signs that the liberal use of TIF captures the natural growth in property tax base, putting more strain on every taxpayer and all taxing bodies, a strain more acutely felt in public budget belt-tightening times.” -- Neighborhood Capital Budget Group, which includes economists at University of Illinois and Loyola, DePaul, and Chicago State Universities.
“Our analysis of 235 municipalities in the metropolitan Chicago region finds cities, towns, and villages that had TIF districts actually grew more slowly than municipalities that did not use TIF.” -- Professors Richard F. Dye and David F. Merriman for a study published by the University of Illinois.
“TIF does not tend to produce a net increase in economic activity; favors large businesses over small businesses; often excludes local businesses and residents from the planning process; and operates in a manner that contradicts conventional notions of justice and fairness.” -- Developing Neighborhood Alternatives Project, a consortium of Chicago neighborhood groups and university economists.
Economists who have studied TIF almost universally agree with these findings.
Also, I encourage the press and citizens, as well as Dr. Lane to contact the following communities and get their opinions on TIF:
Hays, KS
Pittsburg, KS
Harrisonville, MO
Lake Zurich, IL
Oakton, IL
Chicago Public Schools
Hugo, OK
Ada, OK
White Bear, MN
West Bend, WI
Chanhasson, MN
...just to name a few
Posted by pittsburg (anonymous) on October 13, 2008 at 10:51 a.m. (Suggest removal)
There are MANY businesses to be effected by this whole ordeal. Sutherlands would be the most comparible around Emporia to what a Lowes would be. I highly doubt that ANYONE involved with that store is scared of competition, especially Mr. Sutherland himself. Atleast he is voicing his opinion on the subject.
Yes, if the proposal passes and the new development is built, EVERY business in town will see a decline in sales. But this does not mean that Lowes will continue to keep the business after everyone sees that the prices are NOT lower and that the competitors can offer more quality service. I am not saying that more employment opportunities around the area wouldn't be nice to see, but the part time associates that Dr Lane has suggested to fill the positions may not work out like he thinks. When you consider how much it takes to be a full time student, you will see that the 'Big Box' will not be a very good fit. Students need flexibility. They need a place that can easily fill their spot at last minute. Last minute deadlines to be met and lack of responsibility are two main reasons for this. I'm not stating that students could not handle the stress, but not many want to.
Sure they say that other businesses will follow. But have they even mentioned any that would be willing? The economy is already suffering, does anyone really expect the area to keep expanding with the way things are?
There are so many things to consider with the new development and it seems to me that only a few are being looked at. Look at the whole picture! You can't have positives without negatives. Are the negative effects less important than the positives? The surrounding homes and families, for the most part, do not seem to be in agreement with the site. It will change the lifestyle that is set in the area dramatically! Industrial is already a chaotic mess... Why would anyone want to add to it?
Posted by nutsaboutools (anonymous) on October 13, 2008 at 11:12 a.m. (Suggest removal)
Very well written Mr. Lane. Although I'm not sure about the location at Industrial & 24th (some major modifications will be necessary to accommodate the increase in traffic, both on Industrial and 24th), I am sure this would be one of the first steps to growth in Emporia and building some revenue to attract others (and bigger businesses/employment).
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