Cost of affordable housing project likely to be debated again; update on senior living project; Downtown Lawrence Inc. launches new gift card program
This is the season where I’m reminded that we definitely can have differences of opinion about the idea of what’s affordable. (This is also the season where I’m reminded that the First Amendment protects my right to have an opinion, but does nothing to keep me warm while sleeping in the garage.) All this is to say that a difference of opinion may be brewing again on an issue related to an affordable housing project.
I’ve seen a city memo that indicates city commissioners next week once again will consider allowing the Lawrence-Douglas County Housing Authority to purchase a six-unit apartment building at 1725 New Hampshire St., near Dillons, to convert into rent-controlled housing units.
If you remember, the City Commission was asked to approve the purchase this summer, but a majority of commissioners balked because they thought the $485,000 purchase price was too high. The county had the property appraised at about $180,000.
Commissioners asked the Housing Authority to get a private appraisal of the property done. That appraisal has been completed and it comes back with a value of $290,000, based on it being used as a residential property.
The proposed purchase price of the property, however, hasn’t changed from the $485,000 mark, and the Housing Authority still wants to buy the property.
A couple of things to keep in mind here: The Housing Authority is not seeking city tax dollars to buy the property. The authority has reserve funds that it gets either from federal programs or that it accumulates through rental income of its other properties. But, with the way the authority is structured, city commissioners have to sign off on any purchase of real estate made by the authority, even though city tax dollars aren’t involved.
A second point to keep in mind is the location of the property. It shares a property line with the Dillons store on Massachusetts Street. The apartment complex easily could be demolished, and Dillons could use the property for additional parking. Rob Farha, who leads the local group that owns the property, has told me Dillons has a strong interest in purchasing the property. Farha’s preference — it seems — is to keep the property residential, but he’s not willing to take significantly less than what Dillons may pay for the property.
So, commissioners find themselves with an interesting question: Do you allow the Housing Authority to essentially overpay to get more affordable housing units in its program? The Housing Authority has made several points about why it believes the property is worth the money.
— The property is adjacent to Babcock Place, a large apartment complex already owned by the authority. The maintenance staff at Babcock will be able to maintain the property. If the authority were to buy a similar property elsewhere in town, it may have to add a new maintenance staff member to care for it.
— Residents of the six-unit apartment complex may be able to use some of the amenities — like a computer lab — that are available at adjacent Babcock Place.
— Owning the property may allow for the Babcock Place parking lot to be reconfigured and reduce the number of Babcock residents that are currently parking on neighborhood streets.
— The apartment building’s location next to Dillons and other services would be beneficial to low-income residents that would live in the apartment building.
If allowed to purchase the property, the Housing Authority hopes to work out a deal with KVC Health Systems and the Department for Children and Families that would allow youth who are aging out of the foster care program to live in the apartments. The Housing Authority is proposing to charge rents that range from $300 to $600 a month, depending on the income levels of the tenants.
The request comes at an interesting time. The commission is hearing more about the issue of affordable housing. The faith-based group Justice Matters is still actively calling for more to be done on the issue, the city has appointed a task force on affordable housing, and talk of a demonstration project to prove what could be done with city resources is underway.
This project at six units isn’t that large, but it may serve as a bit of a test to determine what commissioners are willing to do to add more rent-controlled units to the community’s affordable housing inventory. The past commission seemed pretty willing to provide incentives or make other accommodations for affordable housing projects. The most prominent projects have been in the Warehouse Arts District, where the past commission provided more than $1.2 million worth of infrastructure improvements to assist the Poehler Lofts and the 9 Del Loft projects, which both are rent-controlled affordable housing projects. The projects also have received some property tax rebates.
Commissioners are tentatively scheduled to discuss the latest request from the Housing Authority at the Dec. 15 City Commission meeting.
In other news and notes from around town:
• Some of you have asked me about the construction work that is underway behind the United Way building. As we previously have reported, that’s also an affordable housing project.
Tenants to Homeowners is constructing 14 living units that will be rent-controlled units available seniors who meet the necessary income guidelines. When I last checked with Tenants to Homeowners a few weeks ago, the project was going well. They hoped to have six of the units ready for occupancy by about March and the other eight ready by June.
Rents will range from $545 to $795 per month, depending on the income of the tenants.
The project — which is called Cedarwood Senior Cottages — is at 25th and Cedarwood. It is being built on a 2.2 acre site that Douglas County previously owned. In addition to the cottages, the approximately $2.3 million project also will include a small community center that will host a new piece of technology that will allow for residents to meet with their physicians via broadband connections. In other words, it will be telemedicine in action.
• If I don’t start getting some holiday gifts bought, even telemedicine won’t be able to save me. Well, there is news of a new gift card program in Downtown Lawrence. Members of Downtown Lawrence Inc. have launched a new program that allows them to replace their old paper gift certificates with plastic gift cards like you find from most major retailers these days.
Sally Zogry, executive director of Downtown Lawrence Inc., said Downtown Lawrence Inc. traditionally sells more than $100,000 in gift certificates each year. But the association has been looking for a way to make the program more efficient. With the old paper certificate, when shoppers redeemed the certificate, any unused amount was returned to the shopper in dollars and cents. That meant that money may not end up getting spent in Downtown Lawrence. The new card program, much like at any other retailer — keeps the unused balance on the card, meaning that money will have to be spent at participating retailers. The cards can be redeemed at more than 100 downtown businesses, Zogry said.
Iowa firm likely to create about 20 jobs at Lawrence foam manufacturing plant; Breezedale markers getting restored; Housing Authority seeks to buy apartment building
It sure looks like Lawrence is going to be in the foam insulation business and will get perhaps 20 new manufacturing jobs as a result.
As I briefly reported Thursday, I’ve seen signs that an Iowa company has plans to open up a manufacturing facility in Lawrence. Des Moines-based Iowa EPS Products indeed has filed paperwork at Lawrence City Hall to renovate about 60,000 square feet of space for manufacturing purposes at 910 E. 29th St. That’s the former E&E Display building just north of 31st and Haskell.
I haven’t yet had any luck getting in touch with officials at Iowa EPS Products, but I’ve done digging otherwise, and I’m told that the Lawrence project likely will mean about 15 to 20 new jobs in Lawrence.
The company manufactures a variety of foam products related to the building industry. Based on some items I’ve read online, it looks like one of the uses for the foam is for the interior of garage doors. In case you didn’t know it, Lawrence is one of the capitals of garage door construction in all of America. Amarr Garage Doors has a major manufacturing facility in the East Hills Business Park, and it seems likely that Iowa EPS Products is seeking a Lawrence presence to be closer to a key customer.
It has been awhile since Lawrence has had an announcement of a new manufacturer. Back in the 1990s, Lawrence got on a pretty good rolel with manufacturing announcements. Then post 2001, we started losing more than we were gaining, and it has been a bit stagnant since.
But there are some signs that manufacturing is making a comeback in Lawrence. The two biggest have been with existing firms that have expanded. Plastic cup manufacturer Berry Plastics has added a large new distribution center along Interstate 70 northwest of town, and Hallmark Cards has moved large amounts of work from its Topeka and Leavenworth facilities to its Lawrence plant. Both have been positive for Lawrence on the job front. Now we’ll see whether we’re about to begin a nice streak of outside companies moving into Lawrence.
The old E&E Display building — that was a company that we lost post-2001 as the market for products displays withered — will be a building to watch. With the completion of the South Lawrence Trafficway in 2016, that building will suddenly have much better transportation access. The building is owned by the group Big Industrial, which repurposes vacant industrial buildings. The building has a little more than 300,000 square feet of finished industrial space. I think the company has a few smaller tenants in the building now, but my understanding is additional space is available.
The area to watch most closely, however, is the Venture Park project. That’s the site of the former Farmland Industries fertilizer plant that has been repurposed into a business park. Larry McElwain, president and CEO of The Chamber, has confirmed his staff is now working with two promising prospects for that property. I don’t have a lot of details about those prospects, other than they are both in the manufacturing sector.
Thus far, I have not seen any applications by Iowa EPS Products for a tax abatement or other financial incentives from City Hall. That likely won’t be the case with prospects looking at Venture Park. Larger projects usually come with incentive requests that could involve tax abatements and offers of free land at Venture Park. The new City Commission likely will get a test on how aggressive it wants to become in attracting new manufacturing jobs.
In other news and notes from around town:
• Perhaps you are like me and have long noticed the ornamental stone markers at the intersection of 23rd and Massachusetts welcoming people to the Breezedale neighborhood just south of 23rd Street. If so, you probably have noticed that someone is tearing them down. Well, don’t worry. The markers are just getting restored, not removed for good.
As we’ve previously reported, the city won grant money from the Kansas Department of Transportation. The old Breezedale signs technically are along a state highway — 23rd Street still serves as Kansas Highway 10 until the eastern leg of the SLT opens — so there was state grant money available for their restoration.
Work on the project began earlier this month and is anticipated to be completed in August. City engineer David Cronin told me the work involves some dismantling of the monument signs, cleaning of the stones, and installing new mortar that matches the original. Some new stones may have to be used to replace stones that were too badly deteriorated. Lawrence-based Hernly Associates, an architectural firm noted for its historic preservation work, is overseeing the project.
The city received $96,954 in grant money from KDOT for the project. The Douglas County Community Foundation also provided $16,000 in grant money, while the city’s guest tax reserve fund is being used to pay for about $8,200 of the project.
• The need for an affordable housing trust fund has been a hot topic at City Hall, but city commissioners on Tuesday will be presented with a more concrete project to add new affordable housing units to the city’s inventory.
The Lawrence-Douglas County Housing Authority is seeking permission to buy an existing six-unit apartment complex at 1725 New Hampshire St. The Housing Authority would use its own funds to make the $485,000 purchase. But the the way the authority is structured, any real estate purchases must be approved by the City Commission. Technically, the property also will be in the name of the city.
Once purchased, the Housing Authority will operate the complexm and the units will be available only to low-to-moderate income residents. Rents will range from $300 to $600 per month, depending on the income level of the tenant.
The Housing Authority is working on a possible arrangement with state officials that would designate the apartment units for foster children who have aged out of the foster program. Finding affordable housing for foster children who have become adults has been problematic in Lawrence.
The property, which is just south of the Housing Authority’s Babcock Place facility, currently is owned by Woodoc Investments, LLC, which is led by Lawrence businessman Rob Farha, according to county and state records. The property is appraised for about $180,000, according to the Douglas County Appraisers office. UPDATE: Just as a reminder, the value of the property probably isn't solely being driven by its use as an apartment complex. The adjacent Dillons store also has had an interest in the property, and has had it under contract at various times, Farha told me. That corporate interest has driven up the fair market value of the property, but as is sometimes the case, that interest hasn't yet showed up in the county's appraisal process.
This isn’t the first time that the Housing Authority has bought an existing apartment complex to use as affordable rental housing. Back in 2006 it also bought and renovated the 58-unit Clinton Place Apartments near Clinton Parkway and Iowa Street.
It will be interesting to watch how many more opportunities like this become available in the future. There may be a significant number. Lawrence has seen a lot of new apartment units built in recent years, which has put pressure on older units to upgrade or change uses. In some cases, owners may be willing to sell to a group like the Housing Authority, which sometimes can get federal dollars to help make such purchases.
If a housing trust fund is established at City Hall, those funds also may be used to help make such purchases. Technically, the city could be on the lookout for such purchases today. As we mentioned last week, the city had a housing trust fund in the early 2000s, but struggled with how to spend the approximately $500,000 that was in the trust fund. As I was doing reporting on the city’s recently released financial audit, I did notice a line item about the housing trust fund all these years later. The fund still technically exists, and it has a little more than $102,000 in it.
Plans for rent-controlled housing near 23rd and O’Connell on the ropes; city concerned about historically low water levels at Clinton Lake
There is a fair amount of uncertainty hanging around Lawrence these days. When will spring finally arrive in earnest? Will Joel Embid stay or go? Was it a mistake to take out a sizable home equity loan with the assumption that I was going to win Warren Buffett's billion dollar bracket?
The answers to those questions are not clear, but it is becoming clearer that financial uncertainty is becoming a problem for a proposed low-income housing project near 23rd and O'Connell.
As we previously have reported, the Lawrence-Douglas County Housing Authority has a strong interest in partnering with a local development group to build rent-controlled housing near the northwest corner of 23rd and O'Connell Road.
But Housing Authority board members met on Monday, and it appears the group is no closer to figuring out a way to fully finance the project, which would be geared toward providing housing for low-to-moderate income working families.
"I don't really see us getting anything done in 2014," Shannon Oury, the executive director of the Housing Authority, told me. "Maybe we would figure out financing in 2014, but we probably wouldn't start building until 2015."
As we previously reported, an unexpected rise in interest rates has left the housing authority with a financing gap. Oury said the Housing Authority and its partner — a development group led by Lawrence businessman Bill Newsome — have redesigned the project. It now has 72 units, down from 128. That has cut the size of the project to about $8.8 million, down from about $15 million previously. But Oury said the project still has a gap of about $1.5 million that needs to be financed.
Figuring out how to fill that gap is where the project stands. And, as Oury notes, experts aren't predicting interest rates to go down any time soon.
"It is going to be tough," Oury said of finding a solution. "Nobody really expected the rates for tax credit projects to move, but they did, and that has created quite a bit of uncertainty."
But Oury said the group will continue to look for solutions, and that the project is not yet dead.
So, it is just like my billon-dollar bracket. BYU is still a Final Four contender, right?
In other news and notes from around town:
• Well, I've recently been informed that my strategy of picking BYU because it sounds somewhat similar to BYOB, was not a good one. I also was informed that I may soon be living in a green van next to Clinton Lake.
At the moment, though, it will be a Clinton Lake that is a bit starved for water. City commissioners at their meeting tonight will be asked to take an action related to Clinton Lake's low water levels.
Commissioners are being asked to send a letter to leaders with the U.S. Army Corps of Engineers asking them to alter their normal plans for releasing water from Clinton Lake this spring and summer. The Corps' policy is that from April through September, the Corps will release water into the Wakarusa River at a minimum rate of 21 cubic feet per second. That minimum release is done "for the benefit of downstream fish, wildlife and aesthetics."
But city commissioners are asking the Corps to adopt a temporary policy that would allow for a minimum release of 7 cubic feet per second. The Kansas Water Office also has made that request of the Corps.
The reason the city and the Water Office is seeking a change is because Clinton Lake levels are at a historic low. Clinton Lake is about 4.5 feet below its normal elevation, which may not sound like a lot, but it actually is the lowest level the lake has been since it was filled in 1981.
The city has a strong interest in maintaining healthy supplies of water at Clinton because the city receives about 60 percent of its supply of treated water from Clinton. (That number also includes the water the city treats for Baldwin City and a host of rural water districts.) The city is not pushing any alarm buttons about running out of water. The city has legal rights to keep pulling water out of Clinton Lake until it reaches about 23.5 feet below its normal pool, according to a city memo. The city also has significant water rights, and a water plant, on the Kansas River. So, Lawrence is in a better situation water-wise than many communities.
But pulling water from a depleted lake can create treatment problems, and there are a ton of recreational users of the lake who don't want to see water levels fall any more than they have to. My understanding is that at current levels, boat ramps, docks and other features for boaters haven't been affected greatly by the low water supply. But that will change if the lake doesn't start rising soon. The heat of summer will increase evaporation.
I'm sure, though, that decreasing the flow of water out of Clinton could have some significant impact on the ecosystems along the Wakarusa River. We'll have to see how the Corps balances those interests. No word yet on when the Corps may make a decision about future water releases.
More LJWorld City Coverage
There are only two explanations for the large swaths of bare dirt at the former Farmland site at 23rd and O'Connell: The area is either preparing for future development, or I've been hired to do the area's landscaping. (This August has been an exception. I actually have a healthy, lush stand of green . . . weeds.)
The former Farmland Industries site, of course, is being prepared to become a new industrial park. We've reported on that several times. But prepare to see more action on the south side of the 23rd and O'Connell intersection as well.
The leader of the Lawrence-Douglas County Housing Authority has confirmed to me that it is moving forward with a new 128-unit affordable housing development on portions of the southwest corner of 23rd and O'Connell. Also, a private development group has filed plans at City Hall to rezone about 10 acres for a multifamily rental development near O'Connell Road and East 28th Street.
We've previously reported that the Housing Authority has been studying the feasibility of an affordable housing, rent-controlled project on the corner. But now the project has moved to a new level. Housing Authority Director Shannon Oury said her board has agreed to devote up to $1 million in reserve funds to help the project get started.
The authority is still partnering with a private development group led by Lawrence developer Bill Newsome. Newsome's company owns the land on the corner and has been working with the state to secure tax credits to help finance the project. Once the units are built, however, the Housing Authority will be responsible for renting the units and using proceeds from the rent to pay off the project. The project is expected to have a total price tag of about $15 million.
Oury said her organization is excited about the project, in part, because it will be a bit different than traditional affordable housing projects.
"We're really gearing this project toward the working class," Oury said.
Families and individuals with incomes that are 40 percent to 60 percent of the median in Douglas County will be eligible to rent at the project. According to a HUD Web site, the median family income in Douglas County is about $70,000, which means a family making 40 percent of that would check in around $28,000 while a family at 60 percent would be at about $42,000.
Oury said the timing seems to be right for the project because the housing market is starting to gain steam again, which often means higher prices and more difficulty for working families to find affordable housing.
"We want to make sure we keep affordable housing developing as all the other housing develops too," Oury said. "We don't want to create a situation that we've seen in other vibrant communities where they price moderate- to low-income people out of the market."
The project still has to win the necessary planning approvals from Lawrence City Hall. That process will provide more details about what the project will look like, although this post from January includes a rendering of a proposed design. Oury said she hopes to have units ready to rent by the first quarter of 2015.
Farther south on O'Connell Road, plans are in the works for an apartment complex. A group led by Lawrence builder Heath Seitz and real estate appraiser Jeff Hatfield have filed for annexation and rezoning of about 10 acres at 1338 E. 1600 Road. That is the vacant land that is just east of the roundabout at 28th and O'Connell.
I'm still waiting to get details from the development group about what type of apartment complex it's planning. The zoning request seeks RM-15 multifamily zoning. The request also notes that the city's Southeast Area Plan calls for the property to be developed with medium density residential uses.
"There is strong demand for affordable housing, especially as our community increases its efforts to market Lawrence as a retirement destination," the developers say in their application.
The RM-15 zoning will allow for a variety of development, everything from row houses to the more traditional two and three-story apartment buildings. The developers will be required to file more details about their plans for the property as the project moves through the approval process. And if I hear more from them, I'll pass it along.
But clearly, the O'Connell Road area is one to watch. Part of it is that developers are betting on the former Farmland Industries site becoming an area for new jobs. People like to live near their work. Another part is that there has been a lot of investment in recent years to get improved sewer service to the area, and developers want to put that investment to work. The infrastructure upgrade will continue in a big way. The city's new sewage treatment plant will be just a ways south of O'Connell Road. The plant will be on the south side of the Wakarusa River, basically at the point where O'Connell Road dead ends at the river.
But another factor that likely is playing into all of this is that the area along O'Connell Road is going to be a pretty handy place to live from a transportation standpoint. Remember that as part of the South Lawrence Trafficway project, 31st Street is going to be extended from Haskell Avenue to O'Connell Road. That means the neighborhoods along O'Connell are going to have a major new thoroughfare that takes residents right onto South Iowa Street and the major shopping district. (If you see my wife scouting for property in the area, now you'll know why.)
In addition, the area will have very easy access onto the South Lawrence Trafficway itself. One of the few major interchanges for the trafficway will be less than two miles to the east, about where Noria Road currently intersects with K-10 Highway. The SLT will make the neighborhood an easy place for people who need to commute either to Kansas City or Topeka.
The next thing to watch is whether the increased residential development in the area will spur more commercial development at the southeast corner of 23rd and O'Connell. A development group led by Newsome owns that property as well. It already is zoned for retail development, but at the moment, only a Tractor Supply store has located in the development.
I know Newsome's No. 1 choice of a tenant would be a grocery store for the corner, but grocers usually like to see a certain amount of rooftop development before they commit to an area. How many rooftops it will take will be the big question for the future.
In the meantime, though, I may go out and support the Tractor Supply store this weekend. It is time to get back to landscaping, and Tractor Supply sells grass seed. It also sells chemicals to kill grass. Decisions, decisions.