photo by: Sylas May/Journal-World

Developer Tony Krsnich, right, addresses the Lawrence City Commission about his 9 Del Lofts II project on Tuesday, April 14, 2026. At left is Affordable Housing Administrator Lea Roselyn.

Instead of getting their city funding clawed back on Tuesday night, two affordable housing projects got another chance – but one of them will also have a deadline.

At its meeting on Tuesday, the City Commission voted not to recoup about $46,000 in affordable housing trust funding from developer Tony Krsnich’s 9 Del Lofts II project. Commissioners also voted to defer for six months their decision on whether to claw back more than half a million from Bert Nash Community Mental Health Center for the Rockledge supportive housing project.

Awards from the city’s trust fund are recommended by the city’s Affordable Housing Advisory Board each year, and the board can also recommend that the funding be clawed back if projects don’t start construction on schedule or don’t meet their contractual obligations. But city staff said Tuesday this had never happened before in the trust’s history.

For the roughly two-dozen-unit Rockledge project, which has received $558,000 from the Affordable Housing Trust Fund over multiple years, it’s missed its construction deadlines, and Bert Nash said it was stepping away from it earlier this year.

But Matthew Herbert, chair of the Bert Nash governing board, said Tuesday that Bert Nash didn’t want to give up on the project – it was more that “this project will not be captained by Bert Nash.”

Herbert said that it had been a difficult year for the mental health nonprofit, whose previous CEO resigned last summer. He said he was “embarrassed by the way the Rockledge project has proceeded,” and that he was working with the Lawrence-Douglas County Housing Authority to find a way forward, possibly through a land transfer of some sort.

The project doesn’t just have city funding, he said; it also has about $2.5 million in county funding and could have a $2.5 million federal HOME-ARP grant. But that grant is dependent on it securing its other financing for the project, said Mathew Faulk, Bert Nash’s director of housing.

“That is a contingent-based grant, so it’s not like we have that ($2.5 million) sitting in the bank,” Faulk said.

Commissioners agreed they wanted to give Bert Nash a chance to come up with a new plan before trying to claw back the money. They settled 4-0 on deferring the clawback vote for six months. (Mayor Brad Finkeldei recused himself from this discussion because his wife works for Bert Nash.)

Commissioner Kristine Polian said that if the project weren’t going forward, the commission should eventually try to recoup the funding.

“But it sounds like there’s hope here,” she said.

The other project – 9 Del Lofts II, an affordable housing project proposed for the Warehouse Arts District – didn’t get a deadline; its clawback was rejected entirely.

Its developer, Krsnich, has done multiple affordable housing projects in Lawrence before, and he received $450,000 for 9 Del Lofts II from the trust fund in 2025. Then, for 2026, he sought $80,000 from the trust fund for a fee waiver, a step intended to help the development qualify for state Low-Income Housing Tax Credits. The City Commission in December decided to grant him that funding – on the condition that he add back three affordable units that he had proposed earlier in the planning process.

Then, in January, Krsnich formally requested that he be allowed to reduce the units by three, from the 29 units proposed earlier to 26. AHAB then recommended clawing back $46,000 in funding – the amount, Affordable Housing Administrator Lea Roselyn said, was determined by calculating the amount of subsidy the city was providing per unit.

Christina Gentry, of the Affordable Housing Advisory Board, explained why the board recommended the clawback. She said there had been “substantial changes to the agreement” on 9 Del Lofts II; claimed that there was a “dishonest application process”; and said she didn’t want the city to set a bad precedent.

“That’s all we wanted to do, is understand how the tax dollars coming from our community will be spent,” Gentry said. “… There was just not enough information toward the end.”

But Krsnich said that if that money were clawed back, 9 Del Lofts II just wouldn’t happen.

“If $46,000 goes away today, we do not have a project,” he said.

Finkeldei and Dever both said it didn’t feel right to them to claw back the funds after the commission had voted earlier to help the project move forward. “This seems like giving on one hand and trying to take it away on another,” Finkeldei said.

Other commissioners saw it differently.

Commissioner Amber Sellers accused Krsnich of “gaslighting” the community about what he was really seeking and planning to do, criticized his “tone” and rejected his request to speak at one point in the meeting.

“For you to come in front of us and gaslight my community members … that’s a lot of strong privilege, my friend, and that’s privilege you don’t have,” Sellers told him.

And Polian said that the vote was a tough one for her. She said she valued process and consistency on one hand, but on the other, the vote was on “a considerably small amount of money” that could make or break the project.

Ultimately the commission took two actions, one to reject the clawback and another to amend Krsnich’s agreement to provide 26 affordable units instead of 29. The vote on the agreement was 3-2, with Sellers and Polian opposed.

In all of the city’s affordable housing work, Dever said it was important not to lose sight of the city’s goal – to get more “doors” of affordable housing in the city.

“We want to produce,” he said before the discussion on 9 Del Lofts II. “We want housing for people and we want it done with our tax dollars well, but we don’t want it mired in red tape.”