City approves incentives for Q39 restaurant to redevelop former Journal‑World building

The Lawrence City Commission on May 6 approved incentives for a private redevelopment of the former Lawrence Journal‑World building at 639 New Hampshire for a Q39 barbecue restaurant, adopting a first‑reading ordinance to form a community improvement district and authorizing industrial revenue bonds for construction material sales‑tax exemptions.

Assistant City Manager Brandon McGuire and the city’s financial advisor, Tom Calico of Baker Tilly, told the commission the proposed incentives met legal and policy requirements and were necessary to make the rehabilitation feasible. Tom Calico said the project budget is roughly $5.6 million; the requested CID would be a 2% sales tax within the district for up to 22 years and is proposed to reimburse “core and shell” rehabilitation costs. The IRB authorization would allow the developer to claim sales‑tax exemptions on construction materials; staff estimated that exemption at about $177,000 depending on where materials are purchased.

RKM KU LLC — the ownership entity for the project — and Q39’s CEO Kelly McGee presented the project as a catalyst for the larger Journal‑World block. “Taking on this development of this historic aged property has proven more complicated than I initially anticipated,” McGee told the commission. “The development costs are too great to proceed without the needed CID and IRB.” The development team said Alarm.com has expressed interest in other parts of the building, which could add private office jobs and stimulate further redevelopment.

The public hearing included both support and opposition. Downtown and business leaders argued the redevelopment would activate a long‑vacant site and help attract foot traffic and new employers. “When you have a dormant area like this that has sat for a long time, the longer the building sits unrevitalized, the harder it gets and the more money it will take,” Andrew Holt, executive director of Downtown Lawrence Inc., said.

Opponents called the incentives corporate welfare and questioned whether a restaurant should be supported with public tools. “We’re looking to spend $5,000,000 for a restaurant to take market share from other restaurants in the area, and it just seems unethical to me,” said commenter Steve Jacob.

Commission debate echoed themes from the KU Gateway discussion: commissioners said they wanted to see the long‑vacant building put back into productive use, and several noted incentives of this form have been used previously for downtown redevelopment. Council members asked staff to confirm that the CID funds would be limited to eligible “core and shell” costs, that the IRB would not create property‑tax abatements in this case, and that the sales‑tax exemption applies only during construction.

Commissioner Fingoldye moved the CID ordinance on first reading and the IRB resolution; both measures passed on first reading 4–1, with Commissioner Larson recorded as opposed. City staff noted the CID is performance‑based — receipts are collected only if and when the business generates taxable sales — and that the IRB sales‑tax exemption applies only to construction materials purchased within the jurisdiction and only while construction is underway.

Why it matters: The measures are designed to lower the upfront cost barrier for a private investor to renovate a structurally complex, historically significant commercial building. Supporters view the incentives as a way to catalyze broader redevelopment in a part of downtown that has been vacant for roughly a decade; critics counter that public incentives should not be used to support a single private restaurant project without firmer community guarantees.

Next steps: Staff will complete required agreements and conditions for the CID and finalize IRB paperwork; the project will proceed to building permits and construction once financing and contracts are in place.