photo by: Sylas May/Journal-World

Susie Carson, Lawrence's economic development director, addresses the Lawrence City Commission on Tuesday, Sept. 8, 2026.

An economic development incentive request for a 341-unit market-rate apartment complex near KU Innovation Park won approval from the Lawrence City Commission on Tuesday.

Commissioners voted 4-1 to approve a resolution expressing the city’s intent to issue $50 million in Industrial Revenue Bonds for the development near 23rd and Iowa streets; Vice Mayor Mike Courtney was the lone dissenting vote. The developers, a group called 23 Iowa Investors affiliated with Block Real Estate Services, were seeking the IRBs to obtain a sales tax exemption on construction materials.

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.” 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, housing and retail. The Crossing apartments’ developer is separate from KU Endowment.

Aaron Mesmer, of Block, told commissioners that the development team was excited about what was going on at The Crossing and wanted to be a part of it. “I’d be really happy to do a project here,” he said.

But he also said construction costs were on the rise, and that the cost Block was now estimating for the project was higher than what city staff had originally heard. Block now expects the development will cost $106.8 million instead of $104.4 million.

“We’re chasing a moving target here, and it’s getting further in the distance from us as we go,” Mesmer said.

The IRBs will not constitute a liability to the city, and the developer will be solely responsible for repaying them.

Susie Carson, the city’s economic development director, said the city did expect it would be forgoing around $208,000 in sales tax revenue, though with the amount of the IRBs, the maximum amount of forgone revenue could be higher. A report in the meeting agenda said the maximum in theory could be as much as $800,000. The city will also receive a $90,000 fee from the developers for the origination of the IRBs.

The project wasn’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 sought 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 those costs are reimbursed, and Carson said the apartments would help that TIF obligation get repaid sooner.

When the TIF is paid off, that “will float all taxing jurisdictions,” she said – the city, the county and the school district.

The commission asked how long that TIF would take to pay back. Monte Soukup, a senior vice president of KU Endowment, said it wouldn’t take the whole 20-year period. “It’ll be well before that that it’ll come back fully on the tax rolls,” he said.

“And that also assumes this and other things get built?” Mayor Brad Finkeldei asked.

That was correct, Soukup said. But he also said that “we’re well ahead of schedule on the build-out and how fast the TIF will pay back.”

“We want to pay it down as quickly as possible,” Commissioner Kristine Polian said.

She and Courtney both had some questions about the city’s economic development incentive policy requirements, though. The policy asks developers seeking incentives to commit to providing some affordable housing units, and Polian and Courtney noted the development’s units would all be market-rate.

Polian said she said she didn’t have a problem with sales tax IRBs, but that “I’m not going to feel good about approving another incentive that goes against our current economic development policy.”

“I will support this; the next one I will not,” Polian said. “And you don’t even need to tell me what it is, because I want to see that we’re doing something about this policy.”

Courtney, meanwhile, said the lack of affordable housing was the reason he’d be voting no.

Carson, who started work in January, told the commission there would eventually be an opportunity to rethink the policy. She said she didn’t want to come in with proposed changes before she really understood the Lawrence community, and she’d also been looking at policies in other communities, both in Kansas and out of state. She said she expected a discussion could happen in 2027.

And Soukup said that The Crossing @ KU project would eventually help with affordable housing, just not in this piece. He said that the original development agreement with the city called for an acre and a half of land to be provided, ready to develop with affordable homes. There are about six years left for KU Endowment to deliver that, he said, and they’re working on it.

Finkeldei told his fellow commissioners that when The Crossing @ KU was originally considered, the market-rate apartment complex was envisioned as a key piece that would house people working at Innovation Park, the business incubator. That made him comfortable supporting the incentive.

“It’s important for (Innovation Park), it’s important for infill, it’s really important for the TIF district,” he said.