Lawrence has a big housing proposal on its west edge, a new Costco about to open, and a developer who wanted to tie the two together. On Tuesday night, Oct. 13, city commissioners said no to the tie.
The Lawrence City Commission voted unanimously against a resolution to set a public hearing on a sales tax and revenue bond district, known as STAR bonds, for a pair of developments along Kansas Highway 10. Commissioners also told city staff not to pursue any STAR bond district that includes the Costco, according to the Lawrence Times.
The vote doesn't kill the housing. The developers can still pursue the projects, though they had said the incentives were key to making them work.
What was on the table
The developer is K-10 Development Group, led by Wichita developer Phil Bundy. In its preview of the meeting, the Times laid out the two projects the group wanted to link with one STAR bond district.
The first is Beacon Landing, on newly annexed land west of K-10. It calls for 1,200 single-family homes and 500 rental units, plus attractions including the Free State Arena, a venue built around a cycling track that could hold up to about 5,000 people, and a 51-acre Wildflower Meadow Park.
The second is the 1059, south of K-10 and Iowa Street, the site long debated as New Boston Crossing. It would hold a large soccer complex run by Sporting Kaw Valley, a nonprofit youth soccer program, along with retail and about 70 acres of conservation area. Earlier plans for high-density housing there drew strong opposition because the land sits in the Wakarusa River Valley floodplain. The developers have also floated a women's flight school near Lawrence Airport.
The developers told the city they would use local builders and suppliers as much as possible.
Why Costco was the sticking point
The Costco has nothing to do with either development. But under state law, the baseline for a STAR bond district is set when the district is created, so the developers needed it in place before the store opens at the end of October to count Costco's sales tax as new revenue for their project. They argued they needed that money to get started.
Curtis Petersen, an attorney for K-10 Development Group, offered to pay the city $2.5 million a year in 2027 and 2028 to help cover the lost Costco revenue. "We're trying to make the city way better off from private money in our pockets," he said.
The city's own advisers weren't sold. Jeff White of Columbia Capital called a Costco a "unicorn" for sales tax. The city's advisers projected the district would bring in about $144 million over its life, compared with the developers' $182 million, and White said the developers used an interest rate that was too aggressive for today's market. "It feels rushed. It feels underdescribed," he said.
Commissioners made clear they weren't against growth. "I am in support of this growth," Commissioner Kristine Polian said. "I approved the annexation for it. I just can't see it with Costco." Vice Mayor Mike Courtney noted that Costco built its store without city help.
Commissioner Mike Dever said the city has made commitments to build infrastructure out west. "This is not an if; it's a when, and we don't need help. We just need to do it fast," he said.
Not everyone in the room wanted the plan shut down. Trent Santee, a local home builder, asked commissioners not to kill the project yet, arguing that growth on the edge of town brings infrastructure costs the city may have to cover, and STAR bonds would let state sales tax pick up part of that tab. Steve Kelly of the Chamber of Lawrence called Beacon Landing "the largest annexation that we've had in many, many years."
Why it matters for Contractors
Seventeen hundred homes and rentals would be a major residential pipeline for a city of Lawrence's size, and the developers promised to lean on local builders and suppliers. That's land development, site utilities, streets, foundations, framing, roofing and finish work for a long list of local trades. For now, the financing that was supposed to jump-start it is off the table, and the developers will have to decide whether to go ahead without the Costco money. Contractors in Douglas County should keep an eye on what K-10 Development Group does next, and on how the city handles its promised infrastructure push to the west, which Dever called a matter of when, not if.