photo by: City of Lawrence

This image shows the location of a proposed apartment development near KU Innovation Park.

Developers are seeking a sales tax exemption on construction materials to build a 341-unit apartment complex near KU Innovation Park, and city leaders are set to vote on that request next week.

The apartment project would be in The Crossing @ KU section of the West Campus near 23rd and Iowa streets, and it would also be called “The Crossing.” Its developers, a group called 23 Iowa Investors affiliated with Block Real Estate Services, are asking the city to issue $50 million in industrial revenue bonds so they can get the sales tax exemption.

At its meeting on Tuesday, the Lawrence City Commission will consider whether to grant that request.

As the Journal-World has reported, KU and the KU Endowment Association are hoping to turn West Campus into a hub for university research that also has a mix of private offices, apartments, condos and retail development. The Crossing apartments’ developer is separate from KU Endowment, but its attorney, Patrick Watkins, said the project would support KU’s goals.

“[T]his complex is intended to be a centerpiece of the University’s vision for The Crossing @ KU, providing a housing option that is otherwise not available within the Lawrence community,” Watkins wrote in a letter to the commission. “The housing is specifically designed to attract and retain key personnel in the University’s vision for expanding its position as a leading research institution.”

The total estimated cost of The Crossing apartments is $104 million, and they would be developed on a piece of unused land adjacent to the KU Innovation Park business incubator, which houses a mix of startups and established companies.

In a memo to commissioners ahead of Tuesday’s meeting, economic development staff wrote that the IRBs would not constitute a liability to the city, and the developer would be solely responsible for repaying them.

The city would, however, be forgoing a six-figure amount of sales tax revenue, staff said. With this size of IRB, staff said, the maximum amount of revenue the city might forgo in theory is $800,000. But staff estimates that for this specific project, the forgone revenue will be far less, around $208,000.

The city will also receive a $90,000 fee from the developers for the origination of the IRBs.

The project isn’t requesting a property tax break, but it is located in a Tax Increment Financing District that captures 95% of property tax revenue generated by developments there. KU Endowment had requested the TIF in 2023 to reimburse a portion of its upfront costs for streets, traffic signals and other infrastructure. The TIF runs for 20 years or until the costs are reimbursed, and staff said the taxable value the new development generates could “materially accelerate repayment” and lead to the TIF ending sooner than it otherwise would have.

The 341 rental units would be market-rate housing, but staff notes that the city’s recent housing study calls for more housing of all types.

In other business, the commission will:

• Consider a $425,000 contract with Senne Company for exterior repairs to Fire Station 3 at 3708 W. Sixth St. Staff wrote that the facade has “visible signs of wear and tear, leaks, and failure points.” The base bid for the project is about $392,000, and the rest of the funding would be contingency funding.

In addition to the information about the facade repairs, the meeting agenda includes a memo from City Manager Majed Al-Ghafry and Fire Chief Joe Hardy, recommending “significant improvements” in the future at Fire Station 3.

The memo says the station has “reached the end of its useful life in its current configuration” and that it will need expansions and additions in the future, including more space in the vehicle bays, electrical and plumbing work, improvements to accommodations and equipment storage, and a larger exercise room. It says city staff will be working with an architecture firm to develop a potential work plan and cost estimate. Based on “high-level” assumptions, staff is now projecting that the cost of rehabilitating the station could be more than $5 million.

• Receive an update from the City Attorney’s Office about emergency repairs to the Bowersock Dam. As the Journal-World reported, one of the dam’s inflatable bladders ruptured last month, causing the water level upstream to lower and making it impossible for the University of Kansas rowing team to practice on the river.

The city attorney’s office says Bowersock Mills and Power Company has purchased an “AquaFence” as a temporary solution, and that KU has agreed to pay Bowersock $50,000, using the city as a conduit, to help cover the costs. The city is not participating in the purchase other than acting as a conduit for the money, the city attorney’s office said.

The City Commission meets at 5 p.m. Tuesday at City Hall, 6 E. Sixth St.