City Hall loan may be too burdensome for new animal shelter; Lawrence Humane Society may seek private financing

A rendering of the exterior of the Lawrence Humane Society's new facility.

The Lawrence Humane Society could be changing its plans to finance its new $7.5-million animal shelter.

Significant financial support for the project is coming from the city of Lawrence, which plans to provide the project a $2.5 million grant. The shelter has also requested a $2.5 million loan from the city, which enables the shelter to get better financing rates. But recently the Humane Society notified the city it may seek a loan elsewhere.

Humane Society Executive Director Kate Meghji said the shelter is exploring the possibility of financing with a private financial institution instead. She said that consideration does not have to do with the interest rate of the loan, but rather the requirements attached to a city loan.

“What we’re looking at are the requirements of a loan from the city versus a bridge loan or a private loan,” Meghji said. “There may be non-financial advantages for our organization to seeking a loan elsewhere.”

When asked for examples, Meghji did not provide specifics, but said the requirements of a private loan might be less than those of the loan from the city. She said that from the beginning, the idea was to look at multiple options.

The shelter has met the fundraising requirements to move forward with the grant and the loan from the city, and Finance Director Bryan Kidney said the city’s legal department has begun drafting those contracts. The City Commission will ultimately review the grant and loan contracts, and the city manager’s office notified the commission last week that the Humane Society may not be seeking the loan after all.

The Humane Society has been raising money toward the project since last spring. The city asked that the shelter have $2.5 million cash on hand before moving forward with the financial agreements, and the Humane Society has met that stipulation, according to the memo. The shelter’s goal is to raise $5 million in private donations toward the project, and this week it announced that a $50,000 grant from PetSmart brought the overall amount it needs to raise to about $880,000.

Meghji said a lot of the donations are spread out over a period of years, so only a portion of the amount is held in cash. Still, she said it’s possible the Humane Society could finance the project with a smaller loan.

“Because of how capital campaigns work, a lot of these donations are going to be paid out over a multi-year period,” Meghji said. “I think it’s inevitable that we’ll have to do some type of loan, what has yet to be determined is how much it will need to be.”

The city has been open to providing financial support to the project, in part, because city ordinance requires that stray animals be impounded. The Humane Society provides that service for the city. In January 2017 the City Commission approved a resolution of intent to issue the $5 million in bonds to fund the grant and loan for the project.

Meghji didn’t have a date for when the decisions about the source and size of the loan will be made, but said construction on the new animal shelter is anticipated to begin in the spring.

About the project

The new shelter will be about 25 percent bigger than the Humane Society’s current shelter, according to plans submitted to the planning commission. In addition to more space, the new shelter will have an improved medical clinic and isolation rooms. Meghji said the shelter adopted out about 3,100 animals last year and had a live-release rate of 93 percent.

Meghji said that rate is the highest yet for the shelter, and she credited improvements to the medical treatment, housing and behavioral training provided to animals, as well as expansion of the shelter’s foster program. Though Meghji said there will always be a percent of animals that must be euthanized because they are too dangerous or too injured to be released, she anticipates the new facility will allow the shelter to save more animals overall.