City Commission approves housing authority’s $485,000 purchase of six-unit apartment building

After gaining approval from the Lawrence City Commission on Tuesday, the Lawrence-Douglas County Housing Authority plans to purchase a six-unit apartment building and lease the rent-controlled units to those aging out of foster care.

The City Commission voted 3-2 to authorize the purchase, which is $195,000 more than the appraised price of the property. The building at 1725 New Hampshire St. will cost the housing authority $485,000. Minor renovations are estimated at $12,000 to $15,000.

The housing authority is competing for the property against Dillons, which had written up a contract to pay $485,000. Dillons sought to rezone the property to a commercial use.

In discussions in 2009, Dillons had agreed to pay $500,000 for the property and convert the land into a parking lot, said Rob Farha, one of the owners of the building. That agreement did not come to fruition.

Farha said the new deal with Dillons was unsolicited, and he indicated he would give preference to the housing authority.

“We would rather work with the city, if this is something they want,” he said.

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Commissioners Lisa Larsen and Stuart Boley and Vice Mayor Leslie Soden voted to approve the purchase. Mayor Mike Amyx and Commissioner Matthew Herbert voted against it.

According to city code, the housing authority must get permission from the City Commission before acquiring real estate, and the property is titled to the city.

The money to pay for the building will be taken from the housing authority’s fund of about $1 million earmarked for acquiring more units, said Shannon Oury, the housing authority’s executive director. Those funds come mostly from the U.S. Department of Housing and Urban Development.

HUD has already issued its approval of the purchase, Oury said.

The housing authority first brought the request to the commission in May, but commissioners said the asking price was too high and asked for an appraisal.

In his vote to oppose the purchase, Herbert said the housing authority could use the funds to purchase more units at a lower price.

Herbert said Tuesday that when the issue came up in May, he found three four-unit apartment buildings on the market for a total $625,000 — or about $52,000 per unit. The cost per unit at 1725 New Hampshire St. is $80,833.

“We have an absolute need for affordable housing, which is why we have the need to efficiently use the dollars that we have,” Herbert said. “I 100 percent support affordable housing, but I also see we have 373 families on the waiting list, which means we can’t spend every dime we have on housing six of them.”

Herbert also said it was “not the job of a city government to be doing competing bids.”

Amyx agreed, saying he wanted the funds to be used to “get the greatest number of units we can.”

Before the vote, Larsen and Boley reiterated what Oury had told the commission: the building’s location added to its value.

The apartment building is near Babcock Place, which is also owned by the housing authority, meaning the group would not have to hire additional maintenance and management staff. Oury also cited the building’s vicinity to Kansas University, the transit system and grocery store as benefits to tenants.

Oury also talked about the cost, saying it was less per unit than Peterson Acres II, which the housing authority paid more than $850,000 to build in 2007.

“We would love to pay $290,000 for this property,” Oury said of the appraised price. “But we are competing against another bidder, which is Dillons… Our concern with this property was, ‘Can we make it self-sustainable.’ We believe we can.”

Though she argued for and voted in favor of the purchase, Larsen said she hoped the vote would not set a precedent that the city “will pay more” for similar properties.

The housing authority currently manages 428 units, Oury said. Of the 373 on the waiting list, 204 are seeking one-bedroom apartments.

The building at 1725 New Hampshire St. is comprised of five one-bedroom units and one studio.

Oury said preference for the apartments would go to those aging out of foster care, which is a new focus of the housing authority.

“We are not serving youth aging out of foster care; it has not been a focus,” she said. “It is going to be a focus for us.”


In other business:

• Commissioners unanimously approved the installation of a 138-square-foot outdoor seating area at The Bottleneck, 737 New Hampshire St.

• Commissioners unanimously accepted the donation of the one-bedroom home at 826 Oak St. in North Lawrence to the Lawrence-Douglas County Housing Authority. Veterans will receive preference to reside in the home.

• Commissioners unanimously approved the city’s $18,000 settlement with Brian Sexton, who was hit by a city trash truck while riding his bicycle last year. Police said at the time that driver inattention caused the collision. The item was on the consent agenda, and there was no discussion.

• Commissioners authorized a waiver be issued to Bayleaf Indian Restaurant & Bar, 947 New Hampshire St., to allow it to seek a drinking establishment license. A waiver was required because the restaurant is located less than 400 feet from the Salvation Army building at 946 New Hampshire St. City code prohibits the sale of alcohol less than 400 feet away from a school or church.

• Commissioners authorized a waiver be issued to Wingstop, 2233 Louisiana St., to allow it to seek a drinking establishment license. A waiver was required because the restaurant is located less than 400 feet from the Lawrence High School baseball field. City code prohibits the sale of alcohol less than 400 feet away from a school or church.

• The Lawrence Chamber of Commerce presented commissioners with a synopsis of Lawrence’s economic development in 2014 and 2015. Larry McElwain, president and CEO of the Chamber, said he wanted the Chamber to be involved in upcoming conversations among commissioners about the city’s economic development incentives policies. McElwain said the incentives are “essential tools” for providing economic development.

• Commissioners unanimously approved a 90-day extension for Leon Kimball to improve the condition of his home at 1231 Pennsylvania St. In April, the commission declared the home and surrounding structures unsafe and asked Kimball to make improvements or demolish them. Kimball’s lawyer said he had plans to demolish the home and make other improvements.

• Commissioners unanimously approved a list of their legislative priorities for Kansas’ next legislative session. The list includes opposition of the 2015 tax lid legislation, mental health issues, renewed support for state arts funding and public safety issues related to the state allowing firearms in public buildings, among other things.

• The Lawrence Jewish Community Congregation, which appealed a site plan for a new car was at Ninth and Iowa streets because of noise concerns, withdrew a consideration of the appeal from the City Commission’s agenda. Ronald Schneider, a Lawrence attorney, said late last week that the item could be pulled if the congregation reached a written agreement with the owner of the Zarco convenience store chain and Sandbar restaurants, the entity proposing the new car wash.

• The meeting recessed until Friday at 11:45 a.m., when the commission will convene to hold final interviews with the three city manager candidates. The interviews will be held in closed executive session. The session will end at 4 p.m.