Lawrence weighs STAR Bond district as Costco plan raises concerns

Lawrence city leaders were weighing a STAR Bond district that could steer nearly all sales tax revenue from new businesses inside its boundaries to a private developer, raising questions about Costco, housing west of the South Lawrence Trafficway and the future shape of growth on the city’s southwest side. The proposal has become less about one project than about how far the city should go in backing multiple large developments with one financing tool.

The application came from K-10 Development Group LLC, a group associated with Wichita businessman Phil Bundy. It sought a special taxing district that would capture sales tax generated by new businesses in the area, a structure that could help pay for major private investment but also redirect revenue the city otherwise would expect to flow into public services.

The district could cover both the proposed Beacon Landing housing project west of the South Lawrence Trafficway and the south Lawrence development previously known as New Boston Crossing. Those plans have already been reworked to include attractions such as a multi-use arena and an interactive life-sized board game experience, underscoring how much the projects have evolved from their original form. If the district advances, it could help lock in a development pattern on the west and south sides of Lawrence for years.

What worried commissioners most was the possibility that the district would also include Costco, even though the retailer is not part of Bundy’s project. Vice Mayor Mike Courtney said he was concerned about taking any action that could make the new Costco store less certain, especially because the city is counting on it to become a major sales-tax contributor once it opens. Lawrence only recently issued a building permit for Costco, and the store is now viewed as part of the city’s near-term economic picture.

The choice before city leaders is high stakes: approve the district and give developers a powerful financing tool, narrow it and force the projects to change again, or reject it and leave the west-side and south-side plans to be reshaped another way. However the city decides, the STAR Bond proposal is forcing a broader public question in Lawrence and Douglas County about how to balance private development incentives against the tax revenue and certainty tied to one of the city’s most important new commercial projects.