News and notes from around town:
• The proposal to redevelop the parking lot near Ninth and Vermont streets has caused a $7 million plan to renovate the former Poehler grocery warehouse building in east Lawrence to get lost in the shuffle a bit. We briefly reported on Kansas City-area developer Tony Krsnich’s plan to convert the building into about 40 apartments.
While it is not looking to dramatically change the center of downtown, the Poehler project is interesting in its own right. First, the approximately 40 apartments would have an element of rent control to them. Krsnich is seeking state tax credits through the Kansas Housing Resources Corp. Use of the tax credits puts some limitations on how much the apartment units can be rented for. Krsnich is estimating that there will be 36-one bedroom units that will start at $500 per month and four two-bedroom units that will start at $600 per month.
Krsnich is hoping to use the bottom floor of the four-story building at 619 E. Eighth St. for office or retail use, while the top three floors would house the apartments. If the bottom floor plans don’t work out, apartments likely would be added to that floor as well.
Krsnich is a new face to Lawrence’s development scene. Based in Leawood, he’s currently leading a major restoration project in midtown Kansas City. His Landmark Investment Group recently received a 25-year tax abatement for a $9.3 million renovation of the 1920s-era Chatham Hotel at 3701 Broadway. Krsnich is proposing 40 units of affordable senior housing for the property, which has certainly seen better days.
The Poehler project won’t be receiving any 25-year tax abatement. Kansas laws are different from Missouri laws when it comes to tax abatements. But do expect the project to ask for some incentives. The building already is part of a Neighborhood Revitalization district that was formed when Lawrence developer Bo Harris planned to rehabilitate the building. That project, however, hit financial difficulties and the building became available. The Neighborhood Revitalization Act is a lot like a tax abatement. It allows for cities to rebate property taxes paid on new improvements at a location. In other words, the act will allow the city to rebate all or a portion of the taxes that will be paid on the $7 million worth or renovations at the building. Look for that issue to show up at City Hall in the coming months.
• Affordable rental housing is a becoming a hot topic in Lawrence. In addition to the Poehler project, the city is set to receive $475,000 in federal/state grant money through the Neighborhood Stabilization Program. The city plans on partnering with Lawrence-based Tenants to Homeowners to build up to four new affordable rental units in the city.
Rebecca Buford, executive director of Tenants to Homeowners, told me she’s looking across the city for sites for a project. She said one scenario is that the project would build two units on vacant lots in the city, while two other houses that currently are in foreclosure could be bought and rehabilitated. Buford wasn’t ready yet to talk about specific locations for the project.
Buford is hoping to build two and three-bedroom units, and wants rents that will be in the $650 to $750 per month range. Tenants will have to meet certain low to moderate income guidelines.
The new grant is the second time in the last two years that the city has received money for affordable rental units. The city also received about $560,000 in grant money in 2009. The city partnered with Tenants to Homeowners and Douglas County to build five new rental units in the 1100 block of Rhode Island Street.
• One of the reasons the city has gotten the affordable rental grants is because of the city’s foreclosure rates. Although foreclosures haven’t been as prevalent in Lawrence as in some cities, they have been high enough for the city to qualify for the program. The latest numbers from the Douglas County Appraiser’s office show that 217 foreclosure sales had been completed through November. That’s up 77 percent from the 122 completed in 2009. In some communities foreclosure sales have become so prevalent that they’ve impacted the fair market value of all homes. But County Appraiser Steve Miles said he doesn’t believe that is happening here. Although foreclosed homes are being bought for less than other similar homes, Miles said he doesn’t believe that is lowering the value of other homes in the community. In other words, don’t expect the appraiser to lower the taxable value on your home because of the foreclosure issue.
“In many of the foreclosure sales reviewed by the appraiser’s office, there were significant damage and condition issues which had a detrimental effect on the final sales price,” Miles wrote in a memo. “The sale may be indicative of that specific property, but it is not an indicator of the market as a whole.”