Courtesy: City of Lawrence and el dorado inc.

A long-discussed multimillion-dollar apartment and commercial building for the Warehouse Arts District is again on the front burner.

Developer Tony Krsnich confirmed his company this week received formal notice that it has been awarded $6.9 million in affordable housing tax credits for a project he’s calling Penn Street Lofts. As we’ve previously reported, Krsnich has long wanted to build a multistory mixed-use building on the southwest corner of Eighth and Pennsylvania streets in East Lawrence. But he’s also wanted to fund a portion of the $14 million project with tax credits, and previous efforts to win the tax credits from the state had fallen short.

Now, he has the federal tax credits and hopes to begin construction by the end of the year, if city officials grant the necessary planning, development and tax rebate proposals. Krsnich — who generally is credited with getting the Warehouse Arts District started with his renovation of the Poehler Lofts building in 2012 — thinks Penn Street Lofts will be the most unique development yet in the district.

“It really will be an accumulation of what the Warehouse Arts District has become,” Krsnich said. “It is going to have something for everybody.”

Courtesy: City of Lawrence and el dorado inc.

Unlike his other projects in the district, this one will combine both residential and commercial spaces. Preliminary plans filed at City Hall call for:

• 71 apartments, with the bulk of them being one- and two-bedroom units. Due to the use of tax credits, many of the apartments will be rent-controlled and available only to households that meet certain income guidelines, as established by state and federal affordable housing programs. The application with the city said 70 percent of the living units will “meet the state affordable rate guidelines.”

• 3,990 square feet of commercial space on the ground floor of the three-story building. The space will take up the front part of the building, which is the side closest to Eighth Street. Krsnich said the space could be used for either retail or office space.

• Seven live-work units on the ground floor of the project. Those live-work units could accommodate artists who want to have a studio and a residence in one location. The units also could accommodate other mom-and-pop start-up businesses, Krsnich said.

• 76 surface-level parking spots on the site of the project. Another 28 parking stalls would be built about a block away near Eighth and Delaware streets on the east side of Delaware.

The new building will be three stories tall, keeping it shorter than the historic Poehler building, which is a late 1800s grocery warehouse building that is the dominant structure in the district, which also includes an art gallery, a brewery and professional offices.

As was the case with Krsnich’s last apartment project in the district, 9 Del Lofts, he plans to build Penn Street Lofts in a modern architectural style.

Courtesy: City of Lawrence and el dorado inc.

“I wouldn’t try to mimic the 1890s architecture anymore than I would try to mimic something built in the 1970s,” Krsnich said. “It is 2019, and we need to embrace and celebrate it. We need to pay homage to what is modern, just like they would have done in the 1890s.”

Krsnich has changed architecture firms since he last submitted plans for the project in 2016. The current renderings are by the previous architectural firm, but Krsnich said they are good representations of what the final design will be by architect Neil Sommers of Sommers Mill Architects in Kansas City.

Krsnich will need city approvals for the project. He also said he will seek financial incentives from the city that are similar in scope to what he has received on his other projects in the district. The biggest part of the package will be a 95% tax rebate that would run for 15 years. Krsnich said such a tax rebate is a necessity to build a project that will have most of its rents controlled by federal and state income caps.

That incentives package hasn’t yet been presented to city commissioners, but Krsnich said he’s confident he can make a good case for the incentives. He said his two other apartment projects in the district both are fully occupied. He said the number of businesses that have come to the district — ranging from big standalone entities like the Cider Gallery and Lawrence Beer Company to smaller firms that rent space in the multitenant office buildings — has exceeded his expectations, and he expects has exceeded the city’s expectations too.

Krsnich thinks the affordable housing component combined with the live-work units is going to get the project a lot of positive attention.

“Usually you only get to do a project that is about housing, or it’s about office space, or it is about retail space,” Krsnich said. “You get to do one but not the other. We are getting to check a lot of boxes with this project.”

At nearly an acre, the site — which if you are having a hard time picturing it is across the street from the Bon Bon restaurant — is the largest Krsnich has developed in the district. It also is about twice as expensive as the $7 million 9 Del Lofts project that he built in 2014.

But Krsnich said he’s eager to do the project, saying that he long ago figured out that the Warehouse Arts District was doing something that really resonated with the community. In the early stages of the district in 2012, few people were sure that would ever be the case.

“Poehler was an incredible risk,” Krsnich said of the loft project that got the district started. “You tell people you are going to build 40 some apartments right next to the train tracks, and they look at you like you are goofy.”

Looking back, Krsnich said he now thinks the district has succeeded because he got a lot of input from some cutting-edge members of the community. Early on he teamed up with George Paley, the late Lawrence landlord who was a big supporter of the arts. He also ended up working with Stan Herd, the Lawrence crop artist that does projects all over the world, plus several other artists, chefs and other people who wanted to see more arts and creativity in the community.

“I think I have done a good job of forming relationships with people, the stakeholders, and I guess you would call them the cool cats,” Krsnich said. “I reached out to all the cool cats. It wasn’t a gesture. It was a genuine tactic to make this better.”

•••

While it is not in the Warehouse Arts District, one of Lawrence’s oldest buildings is expected to benefit from Krsnich’s expansion plans.

Krsnich recently filed a set of renovation plans for the Turnhalle building at 900 Rhode Island Street. The building dates back to 1869 and is one of the oldest structures in the city. It also has a colorful history as the former home of Lawrence’s Turnverein, a German-American social club that had a beer garden, complete with a mini-bowling alley, during Prohibition.

Krsnich bought the building in 2014 from the Lawrence Preservation Alliance, which had bought the building after being concerned it was falling into disrepair. The building has since been stabilized, but it also has been empty.

photo by: Nick Krug

The Turnhalle building is pictured at the southwest corner of Ninth and Rhode Island streets in this file photo from September 2012.

Krsnich said he still doesn’t have a tenant for the property, but he thinks now is the time to do the major renovation work to get it ready for a business or two. He said he will be able to gain some economies of scale by doing the renovation at the same time he has crews building the Penn Street Lofts project in the Warehouse Arts District.

Also, as we previously reported, he has reached a deal to use a parking lot across the street from Turnhalle to accommodate future tenants of the building. That deal, and the completion of Ninth Street construction, also makes now a good time to move ahead on the project, he said.

The plans filed with City Hall show the basement of the building would be renovated in a way that would allow a kitchen to be added in the future. Krsnich said he thinks a small restaurant or bar would be a good use for the basement area. The main floor would also be renovated but would keep its balcony and stage area, which makes it a natural fit for an event space, a gallery or other type of use, Krsnich said.

He hopes the project’s outcome will be similar to that of the renovation that took place at the building that houses Bon Bon at 804 Pennsylvania St. Krsnich also owns that building and started renovating it before he had a tenant.

“It was kind of one of those ‘if you build it, they will come’ projects,” Krsnich said. “I took quite a bit of risk on that one, but I’m willing to do it again with Turnhalle.”