photo by: Nick Krug

Lawrence City Hall, 6 E. Sixth St., is pictured on May 3, 2016.

Lawrence city leaders will soon continue their discussion regarding how the city should spend close to $8.5 million in remaining pandemic relief aid.

As part of its meeting Tuesday, the Lawrence City Commission will receive an updated recommendation from city staff regarding how it should spend the remaining $8.485 million in American Rescue Plan Act funds.

Previously, the city recommended spending $8.29 million on eight projects or initiatives related to housing and homelessness. Following input from the commission, the city is recommending spending the higher amount, with some modifications, eliminations and additions to what was previously recommended.

Commissioners began discussing the recommendation earlier this month. The biggest item was a recommendation to spend $4.65 million to invest in tiny, modular homes that can be an alternative to tents for those experiencing homelessness. Commissioners said they would be interested in discussing that and other items, but that they wanted more details and were not ready to commit to a dollar amount for the modular homes project or to commit to spending all of the city’s remaining ARPA dollars on the projects identified by staff.

The new spending recommendation increases and modifies funding for affordable housing construction, eliminates funding from two projects, decreases funding from one project, and adds funding for another.

Previously, the city had recommended $1.6 million toward property acquisition and infrastructure for future affordable housing construction, but some commissioners expressed interest in putting funding toward existing projects out of a desire to provide housing more quickly. The updated recommendation provides an additional $560,000, for a total of $2.16 million, toward specific affordable housing projects. The recommendation calls for the city to fully fund three projects recommended to receive a grant from the city’s affordable housing trust fund that did not receive the full amount they requested, namely the New Hampshire Street Lofts by Flint Hills Holdings Group; The Estates of Lawrence by a partnership of same name; and Union at the Loop by The Annex Group. Part of the funding will also go to support an affordable housing project by nonprofit Tenants to Homeowners.

The new recommendation removes funding for two initiatives: a tenant rights education /counseling program and a housing program AmeriCorps member. It also adds funding for part-time staffing for the emergency winter shelter. The Winter Emergency Shelter, which provides 75 overnight shelter spaces, will operate through March 12 at the Community Building, 115 W. 11th St., with 40 overflow spaces available at the East Lawrence Recreation Center, 1245 E. 15th St. The updated recommendation provides $150,000 less for the modular homes projects.

A listing of the projects or initiatives included in the updated recommendation is as follows, and a full description is available as part of the commission’s agenda:

• Fully funding three existing affordable housing projects and providing funding for Tenants to Homeowners project: $2.16 million

• DCCCA transitional housing for women recovering from substance abuse and their children: up to $600,000

• Bert Nash supported and rehabilitative permanent housing for people with serious mental illness who are experiencing homelessness: $900,000

• Two employees for city’s Housing Initiatives Division, one to provide homeless outreach and the other to manage public engagement: $200,000 ($100,000 for each position)

• Part-time staffing for Winter Emergency Shelter and WES overflow: $50,000

• Updated housing needs assessment and market analysis to identify current housing needs after changes in market conditions during the pandemic: $75,000

• Modular homes project/service campus for unsheltered homeless (land acquisition/lease, site preparation, modular homes): $4.5 million

As part of the agenda item, the commission will also receive more information about the Union at the Loop project, which is currently under construction in southern Lawrence. The Affordable Housing Advisory Board previously recommended that the commission award $400,000 to the project, which is under construction by The Annex Group at 1381 North 1300 Road. If the commission also approves the city staff recommendation to fully fund the project’s grant request using ARPA funds, the total amount of city funding for the project would increase to $750,000.

The funding recommendation was previously part of $1.66 million in grants the board recommended for approval. The commission approved seven grants totaling $1.26 million earlier this month, but deferred The Annex Group’s grant for more discussion. Mayor Lisa Larsen expressed concern that development fees for the project were 11%, which she said were higher than what the city usually sees. Larsen suggested, and other commissioners agreed, that the grant be deferred for further discussion.

A city staff memo states that staff subsequently reached out to The Annex Group for clarification on the developer fee, and was provided with the following information:

• The gross developer fee is $4.4 million, of which approximately $3 million is deferred back into the project, making the net developer fee about $1.4 million.

• While the fee is 11% ($4.4 million), with the $3 million contributed back into the project, approximately $1.4 million of the developer fee is actually paid out to the developer, for a net fee of about 3.5%.

• This fee is paid over a four-year period and goes to pay for the company’s overhead so it can continue to build additional affordable housing.

The Lawrence City Commission will convene at 5:45 p.m. Tuesday at City Hall, 6 E. Sixth St.