Douglas County approves 10-year, reduced tax incentive for apartment development

The Douglas County Commission stayed in step with other local governments on Wednesday evening when it approved a reduced tax incentive for a proposed $75 million mixed-use apartment complex on Indiana Street.

In a 3-0 vote, commissioners signed off on a 10-year, 85 percent tax rebate for the project, mirroring incentives the city of Lawrence (3-2 vote) and the Lawrence school district (6-1) already approved. The project’s developers, HERE INC., originally submitted a request for a 12-year, 95 percent rebate to all three governing bodies.

Jim Heffernan, a partner for HERE LLC, said the group is doing its best to make the project work with the reduced tax incentive. He stated in June that a 10-year, 85 percent deal could be “terminal” for the project.

“There are some challenges we’re trying to overcome,” he said.

An analysis of the tax incentive options by the Lawrence City Manager’s Office concluded an 85 percent rebate would produce $97,000 in property tax revenue the first year after the complex is completed. The existing properties at that site — apartments and a private home at 1101 and 1115 Indiana St. — currently bring in $46,000 in tax revenues.

Commissioners repeatedly referred to those statistics as a leading reason for their approval. They also noted the building meets the criteria of the city’s Horizon 2020 plan and the Oread neighborhood’s plan.

“I see a tremendous long-term benefit,” said Commissioner Jim Flory.

The proposed apartment complex, aimed at attracting Kansas University students, would stand seven stories and include more than 230 apartment units, with retail spaces on the first floor. Design plans also feature a parking garage with an automated storage and retrieval system.

The project will be discussed again by the City Commission at its Aug. 5 meeting.

In other business Wednesday, commissioners:

• Approved a 10-year, 85 percent tax rebate for the rehabilitation of three historic structures and redeveloping property at 1106 Rhode Island St. for office, retail and residential space.

• Authorized the Public Works Department to apply for a grant from the Kansas Department of Wildlife, Parks and Tourism to design and construct an ADA-accessible trail near the Lone Star Lake marina building. The grant requests $275,000 from the state. The project would then require $55,000 from the county.

• Approved an agreement with Central Power Systems to conduct semi-annual inspections, service and maintenance for county-owned backup generators for five years. The total cost is $89,500.