The Oread Hotel, 1200 Oread Ave.

The great thing about property taxes is that you can complain about them. One day you can complain that you’re paying too much of them.

Another day you can complain that someone else is paying you too little.

The complaint about too much comes when you get your tax bill. Even if your property taxes haven’t increased, your tax bill has been going up for many years because property values ​​have increased.

As for the complaint that someone else is paying too little, most of the time it’s about tax breaks or general economic development incentives. I’m talking about the various types of tax breaks that governments give to businesses in the hope of persuading businesses to locate or expand in their communities.

There is certainly a section of the tax-paying population that claims that the average citizen would have a lower tax burden if the government simply stopped granting such tax breaks.

Well, the first step in that discussion should really be to figure out how much a municipality provides in tax relief. The point of this article, by the way, is not to determine whether the amount is too high or too low. Rather, I just wanted to determine the amount. That’s not always easy. The city, to its credit, publishes an annual economic development report that largely answers that question. But it doesn’t capture all of the incentives. The city’s annual financial audit — which was recently completed — fills in a few more gaps, but not all of them. I tried to fill in the last few gaps by getting some information from the Douglas County Treasurer’s office.

So how much does it cost in Lawrence? Just over $4 million in 2023.

More specifically, I calculated the value of tax abatements or tax rebates for projects in the City of Lawrence to be $4.34 million in 2024. Note that I did not say that the City of Lawrence received $3.99 million in tax abatements. Not all tax money comes from the city budget. For example, when a project receives a tax abatement, it simultaneously receives tax abatement from the city, county, and school district.

Here is a breakdown of the different types:

• Tax abatements, which provide a reduction in a certain percentage – typically 50% to 100% – of property taxes: $1.93 million.

• Tax increment financing, a program in which a percentage of new property taxes and sales taxes generated by a new development are refunded to developers for specific purposes: $1.18 million.

• Neighborhood Revitalization Act, a program that refunds a percentage of property taxes to a property owner who has improved a run-down property: $759,062

• Transportation Development District, a program that imposes a special sales tax on the revenues of a project. The project developer receives the proceeds from the special tax to finance the project’s transportation infrastructure, such as parking: $469,901.

It’s also interesting to look at what types of businesses in Lawrence receive the biggest tax breaks. For years, state law largely limited tax breaks to industrial projects. The idea was that industrial projects often created well-paying jobs, produced unique products that weren’t in direct competition with other businesses in the community, and that sales of those products often went to businesses outside the community. But in recent decades, the state has greatly expanded the types of businesses eligible for tax breaks. Today, industrial businesses are no longer at the top of the list of the biggest recipients of tax breaks in Lawrence.

Instead, a hotel does. The Oread Hotel on the north end of the University of Kansas campus was the largest recipient of tax breaks in 2023, at just under $600,000. Its neighbor — a student housing complex called HERE @ Kansas — is next on the list, at about $560,000. This multi-story building at 11th and Mississippi Streets is technically a multi-use building, but nearly all of the commercial space on the ground floor is vacant.

Next on the list is Rock Chalk Park, a unique public-private partnership between KU, the city and a private company. The fact that a private company is involved means the sports complex has to pay property taxes, but the city has given it a 100% tax abatement. That abatement gave it just over $475,000 in tax relief in 2023.

Next on the list is another hotel. The Marriott at the corner of Ninth and New Hampshire streets and its ground-floor commercial space received about $385,000 in tax breaks. Next is the Bauer Farms shopping center at the corner of Sixth and Wakarusa — the one with CVS, Sprouts, Theater Lawrence and other users. It received about $372,000 in tax breaks.

That brings us to the top five tax-reduced projects in Lawrence, and none of them are industrial projects. However, project number 6 is an industrial project. It is the US Engineering building in VenturePark in east Lawrence. The new plant produces complex piping systems for heating and air conditioning and other such products. It received a tax reduc-tion of about $350,000.

I will post the full list of projects at the end, but these six projects offer some interesting points.

First, Rock Chalk Park. It doesn’t show up in the city’s economic development report as a project eligible for a tax abatement. But it did show up in the city’s 2023 financial audit. Why it doesn’t show up in the more public economic development report, I don’t know. But previous city officials made it sound like the tax abatement for Rock Chalk Park was more of a formality than anything else. The argument is that KU property is automatically tax-exempt under Kansas law. Without the private partner, those uses would have been automatically exempt from property taxes. But of course, the private partner existed, so the city had to approve the 100 percent tax abatement to make the project tax-exempt.

Rock Chalk Park will soon be 10 years old. It opened in October 2014. Under state law, tax abatements expire after 10 years. Britt Crum Cano, the city’s economic development manager, told me she is not aware of any efforts to get an extension for Rock Chalk Park. She expects the project to be fully added to the tax rolls sometime in the next year or two.

We’ll see. KU could apply for special permission from the Kansas Legislature. Or KU and KU Endowment could try to buy out the private partner, a company headed by Lawrence businessman Thomas Fritzel, who was one of the city’s largest developers for the past decade but also served a prison sentence for fraud. Because of the nature of this public-private partnership, it’s difficult for me to know from ordinary land records what the ownership situation is today. But I’ll look into that more closely, since we should probably take a 10-year look back at Rock Chalk Park.

Finally, it’s worth looking at the list in terms of the types of projects receiving tax abatements. It’s worth noting that while there wasn’t a single industrial project among the top five projects, industrial projects account for the largest dollar amount of investment. That was a difficult fact to figure out, however. Neither the city’s economic development report nor the city audit listed the amount of tax abatements for several of the industrial projects. Instead, it listed the amount of taxes – or, technically, tax in lieu payments – that the projects made. However, I felt it was important to get an overall figure for the value of tax abatements in the community, so I used appraisal information from the Douglas County Treasurer’s and Assessor’s offices to determine approximately how much in taxes these projects would have paid without tax abatements. The projects with asterisks are the ones where I used that method.

Below is the list of all Lawrence projects that received either a tax abatement or tax refund in 2023. The dollar amount represents the value of the tax abatement. I’ve listed them by the industry I’ve placed them in. Some of the projects are mixed-use buildings. In those cases, I’ve identified the primary use of those buildings and placed them in that category. Each project also has a lot of nuance. For example, some of the apartment projects — most notably the one in the Warehouse Arts District — are federally designated affordable housing projects, while other projects, like Here @ Kansas, are not. So take the list for what it is: a comprehensive look.

INDUSTRY (total $1.32 million)

• Sunlite Science and Technology: $22,423

• VanTrust Warehouse VenturePark (Berry Plastics): $319,129

• Plastikon Expansion: $117,399

• Glassware and clothing for the grandstand: $95,306

• Standard drink: $133,600

• Hershey’s/Pretzels Inc: $286,566

• US Engineering: $353,619

APARTMENTS (total $995,217)

• 900 Delaware Warehouse Arts District: $37,679

• 826 Penn Warehouse Arts District: $19,786

• Here in Kansas: $561,326

• 800 Penn Warehouse Arts District: $75,471

• 9th and NH North: $272,870

• Downtown 2000 900 Block NH: $28,085

HOTELS (total USD 977,498)

• The Oreadin: $592,264

• Marriott on NH: $385,234

SPORTS/RECREATION/ARTS (total USD 501,956)

• Rock Chalk Park: $476,310

• Cider Gallery Warehouse Arts District: $25,646

RETAIL (total $371,975)

• Bauer Farms: $371,975

HEALTH/OFFICE (total $171,143)

• Heartland Clinic: $131,989

• 8th and Penn: $26,548

• Hernly Architects Studio: $12,606