Welcome!

This forum is a sounding board for a range of issues facing eastern Boulder County. I will prompt discussions with my posts and elected officials can tap into the concerns of citizens here, and explain their rationale on decisions. Follow along with the latest discussion by checking the list of recent comments on the right. You can comment with your name, a nickname or anonymously if you wish. You can become a contributor as well. Thank you for your comments!
Latest Post:

Tuesday, February 20, 2007

Louisville Business Retention; Lafayette Wins the Sales Tax Graph War

The Louisville City Council is set tonight to approve a slate of members for the Business Retention & Development Committee The group will include, by Council ordinance:
  • Three members of City Council
  • One member of the Planning Commission
  • One representative from the Revitalization Commission
  • One representative from the Chamber of Commerce
  • One representative from the Downtown Business Association


Each of the above are to be appointed by their own organizations. The following appointments have been requested by each organization for the 2007 term:

  • City Council – Don Brown, Frost Yarnell, and Ron Sackett
  • Planning Commission – Hank Dalton
  • Revitalization Commission – Rob Lathrop
  • Chamber of Commerce – Eugene Caranci (Loren Loretti as alternate)
  • Downtown Business Association – Arlin Lehman

With the Daily Camera article Sunday about all the revenue sharing and cutthroat sales tax challenges, Louisville might be the first city to truly champion the idea. Check out the graphs that show Lafayette as the only community with positive year-to-year sales tax growth since 2002. Can it be true? I'm sure someone has "the rest of the story...."

But seriously, it is a solid trend that other East BOCO communities would like to emulate. Look for Boulder and Boulder County - each with their own "revenue stabilization" committees working on ideas, to recommend everyone in Boulder County get on board. Lafayette will be everyone's best friend all of a sudden...

13 comments:

Anonymous said...

It's true that Lafayette's trade area has very favorable numbers right now. I do believe Lafayette probably was the only City to consistently grow its sales tax base in the East County the last few years.

Whether the market really required Lafayette to intervene with incentives is an open question. To some extent, given the retail business climate generally, the answer is probably yes. This still leaves plenty of room for debate about the magnitude and mechanics of those incentives and the relationship of economic development to land use concerns.

I'd say the differences between Louisville and Lafayette's trending just shows the power of demographics and the market. With Rock Creek pretty well built-out and Louisville just recently coming out of virtual zero-growth mode (for how long?), is it any surprise that things were getting stagnant there from a sales tax perspective?

Trends will change over time, and Lafayette's build out is also foreseeable. I do believe a regional revenue sharing plan may help to rationalize economic development. There are some lessons to be learned from the experience in Louisville.

Anonymous said...

Did the Daily Camera article on Sunday have two graphs, one showing change in sales tax collections and the other showing rounded sales tax collection figures? I saw those somewhere recently but can't find them now so I will just paraphrase to say that the total sales tax collections for Lafayette are still far below those of Louisville, even with Louisville's recent downturn. And we have a larger population so sales tax dollars per capita would be lower still. The way I remember it is like a student who was earning a grade of D raising their grade to a C. Better, but lots of room for improvement and nothing to brag about.

Anonymous said...

The truth is we are the beneficiary of demographic trends going on around us. The huge expansion of Broomfield and Erie to the east of us put us in the economic cross hairs of businesses that locate based on rooftops. Just 5 years ago they would not even look at us. However, this 'sweet spot' is transitory, and we have window of maybe 5 years before it fades. Economic development will be a balancing act since we need to evaluate each large business that wants to be here and balance the potential revenue impact against the fit according to the Comp Plan.
We need to continue to encourage small businesses too.
Further we do need to provide a more targeted business development plan, for both large and small business, as guidance for city staff with specific goals and communicate these to the citizens.
Forming a development committee like Louisville's is not a bad idea.
Lafayette's growth ordinance will continue to control residential development and we will see a small steady growth of residential development. Residential build out will not occur for many years yet.

Dan Powers said...

Frank, would a development commmitee be a challenge to or otherwise be something the Chamber or LOTA may find suspicious? The creation of such groups often brings out the grumbling of toes being stepped on. "We're already doing that now, grumble grumble..." Especially if it apears to benefit newer arrivals and corporate chains.

Anonymous said...

I believe the Chamber and LOTA are more focused on serving the small businesses in the community and their resources are limited. I think an economic development committee could leverage what they are doing by adding a citywide development perspective and take a more aggressive approach to attracting specific businesses to the city based on the city's business plan (which is being reviewed currently) and the comprehensive plan. I see this as an evolutionary step as the city develops, not due to any shortcomings by the chamber or LOTA.

Dan Powers said...

I'm fascinated with the mechanisms to attract businesses, espoeically specific businesses as you mention. I percieve Lafayette's surface vision is to attract more retail sales tax generators, however the potential to pull light industrial or creative-class businesses from Boulder because of cheaper property expenses and transportation options could be put out there as a more blatant vision too.

This would be a challenge perhaps to the "small town feel". But just as the annexation brought out good debate, the economic development vision for the city should also be on the table. Perhaps Lowe's EDA request will push the issue. I don't think they should be given anything special; the idea that the support of the annexation means they should get some great incentives is a stretch.

Anonymous said...

What's this? Lowe's has made an EDA request? So soon? Yikes, that can't be right.

"Creative class" businesses do not, in my opinion, run counter to the small town feel. I suppose gentrification is one attribute associated with the creative class that threatens the small town fabric, but feel free to remind me why else this would be a concern.

And, taking this all in reverse order, isn't the revenue aspect of retail and commercial property development a huge variable that could be controlled by looking at the regional tax pool? I'm not an expert in this, but it seems to me that you could form an economic development committee to devleop a vision, or you could just have an arm of the city government that might add some muscle but not break out of the mold of every other city. There's nothing terribly wrong with sticking with the proven business models, but I would hope for more of a vision than stealing some of Boulder's thunder. Ideas?

Dan Powers said...

Alex - sorry to cause a scare. I just expect some type of EDA will be requested, nothing more than that. I take my cue from the oppoonents who stressed annexation approval would embolden Lowe's request for special financial treatment - they can say "look, the people love us".

It seems as common sense to me they'll ask for something as it did that they'd pursue an Erie locale if the vote failed. Although Mayor Moore spilled the beans on that one (and Lafayette City Council wasn't too pleased, there's no deep throat sources on this one for me....

Don't overlook the potential to pull from Boulder - and Longmont and Broomfield, for that matter. I believe one of Lafayette's greatest strength is simply where it is located - we count on Boulder to be the place creative class companies think of, then they get here and see the prices, regulations and other variables and glance around. Boulder's reputation is an undeniable attractor to the kinds of businesses that would never have heard about Lafayette.

If people didn't want to be so close to the foothills, Boulder and Denver they could get true "small town feel" for way less expense on the eastern plains. I see people liking "small town" as long its still pretty close to the amenities of "big town".

Anonymous said...

Last year at the Council's goal setting workshop, I proposed the City form an Economic Develpment Commission. I think Councilor Phillips supported the idea. But the city administrator pushed backed and the idea was dropped.

I had several reasons for doing so at the time. My view was that the city did not have an up-to-date economic development plan. The one I have seen was authored in 1998 by a CU student (my memory may not be accurate on this). It appeared that the plan was whoever showed interest.

In addition, all EDAs flowed through two gste keepers, the city administrator and the economic development director. Oddly enough, the finance director was not involved in the process to provide financial expertise and credence to any of numbers and financial projections. Also, the amount and quality of the information (sometimes misinformation) provided from which the Council was asked to give direction and make decisions was sketchy at best. Critical factors were often not addressed.

You would all be somewhat surprised how difficult it was to have the city document and report on the EDAs currently in place. To do so was to provide a way to measure the results. Yet there was resistance to the concept of measuring return on investment (ROI), a critical measurement used by most responsible bodies. Finally the results are being reported. But conclusions are not being made.

Even "negotiating" the yearly goals involving economic development was an adventure as usually the draft returned by the city admin was often disappointing. At least now the city is working on a "business plan", looking to match projected revenues against projected costs.

Unfortunately a lot of dialogue now takes place in executive sessions and can not be publicly shared. But a couple of the faux pas are public. For example, the cheese guys EDA who got a $2.4M city loan were not required to open a store in the Coal Creek Shopping Center. So the council had to pass an ordinance amending the contract to set a drop dead date. Meanwhile they expanded their Longmont store.

Another involved a LURA loan to a catering company located in the Center. LN reported that the catering folks were holding off because the cheese guys were not meeting their commitments to the tenants to develop the property.

A third is that the city EDAs don't enforce the recipients commitments for traffic mitigation. We are on year four for King Soopers to get the traffic light installed on Crossing Road and Baseline (I hear it is now May). The EDA has expired after 3 years.

Speaking of the actual EDA contracts, the city council gets essentially two business days to review and make queries on them. Not a lot of time given the magnitude of them.

Your tax money at work. I've been chipping away at this for 3 years now. Progress is there but extremely slow.

By the way, the graphs are very misleading. Graphing percentages does not tell the real story. The good news is the trend is up, primarily because of food and utility taxes. The numbers don't get adjusted for inflation. These two items have grown faster than the CPI. The city does not report same store sales which is the true indicator.

Anonymous said...

Sorry, the anonymous is me on the last comment was me.

Dan Powers said...

Kerry, you said "Finally the results are being reported. But conclusions are not being made." When the inevitable Lowe's EDA request comes in, can Council tell staff to come prepared with the manifestations of other EDA's to help Council determine what loopholes to avoid? Or is this all apples to oranges?

It appears the EDAs have no real enforcement capability; performace that mandates City concessions is nearly guranteed whereas performance on the EDA receipient side is allowed to be flexible to reflect market conditions. Is that the nature of EDAs? I'm curious to know how much real leverage Council has when constructing an EDA. The two days notice you reference puts a lot of blame/credit on your backs when staff likely knows much more of the details and context (and risks).

Anonymous said...

Dan, the basic question is how good is the staff work and how experienced is the council in querying the staff and serving in a "watch dog" capacity.

A couple of examples right now. The Super Wal-Mart is scheduled to open around August or so. The PUD calls for traffic mitigation providing for turn lanes on W. Baseline on to Aspen Ridge. That intersection across from Caria is considered to be one of the two worse and most dangerous in town. So it is now March and I called city hall asking when will work begin. The response is the city will have to check it out. So is anyone monitoring this PUD and "enforcing" its provisions?

Then of course we have the infamous Crossing Road and E. Baseline controlled intersection, now going on four years.

And where are the Cheese guys? What did not get a lot of PR is even when the "drop dead" date was finally passed, the Cheese guys asked for a number of absurd concessions, which we ignored. Meanwhile they expanded their Longmont store.

The latest one is a confidential report on measuring the EDAs. The council has been told several times that when King Soopers opened, Albertson's business dropped but then recovered to its pre KS level of business. Guess what? Not the case. Not even close. And that was not pointed out in the report. The reader has to have the training to figure it out. So what will happen to KS and Albertsons when WM opens (visit the WM Superstore at Flatiron Crossing - unbelievable)?

There was no explanation of the WM EDA in laymen's terms by the way.

Now that Issue A has passed, here is another tidbit that did not come out in the debate. Take the drive west from the eastern Lafayette city line to 287. Note all the cracks and potholes, especially between Public Road and 287. That is CDOT country and the city is NOT allowed to repair the road. We will have to wait in line until CDOT gets around to it. So what happens a few years from now with a Lowes store and a 160 unit housing project now popping up?

Tuesday the council meets with the Planning Commission. One of the discussion topics is "Unintended Consequences". So I plan to put this on the table. The retail center of town has shifted to Baseline and 287. What are we going to do about it?
The council is not involved in the "nose to nose" negotiations. So it is not clear how tough the city position is on the deal points. It is becoming clear that experience should dictate what to watch out for. The council needs to become more demanding. But the horse may have left the barn.

Lastly, perhaps we should have a betting pool (a cup of coffee) on when the Lowes will open. Three or four years from now? Target is nowhere at the moment.

P.S. The city's position is that Lowes has not asked for an EDA for other stores opened around here. So that is not going to happen.

Anonymous said...

Kerry, I'm curious what kind of special training is required to determine if Albertson's has recovered sales volume to its pre-King Soopers level? How is that not a simple comparison of two numbers?

What I do know is that I should have set up a betting pool on how long it would take for the non-existent Lowe's EDA to be acknowledged as such, by the same person who was still so certain, not even a week before, that the City had utterly compromised its ability to avoid it.

Speculation is a great tool for analysis, if used properly. If it takes an Economic Development Commission to get away from all the hand waving and smoke screens to achieve other political objectives, we can't implement that idea fast enough.