photo by: Douglas County GIS/Journal-World

The blue star shows the site of a proposed 250-unit affordable housing complex in south Lawrence.

There are new signs that a large affordable housing apartment complex will develop in the heart of south Lawrence’s big box retail district.

A site plan has been filed for an approximately 500-bedroom apartment complex at the southeast corner of 31st and Michigan streets, which is basically across the street from the Menards home improvement store.

If some of this sounds familiar, we reported in June that a Manhattan-based development company had expressed interest in building an affordable housing project on the vacant lot along 31st Street. However, at that time the project hadn’t yet filed a site plan, but rather was seeking some city support as part of the project’s application for affordable housing tax credits from the state.

Since then, the project has won a tax credit credit award for the project, which the developer will use to help finance the project. With that key approval in hand, The Prime Company has filed a site plan with Lawrence City Hall, which is one of the final steps needed before construction can begin on the site.

photo by: City of Lawrence/Landplan Engineering

A rendering shows the proposed design for an apartment building at 31st and Michigan Streets. This renderings shows the view from 31st Street.

photo by: City of Lawrence/Landplan Engineering

This rendering shows the proposed design of an apartment building at 31st and Michigan streets. This is the view from Michigan Street.

Plans call for 250 apartments — with a mix of three-bedroom, two-bedroom and one-bedroom units — totaling 506 bedrooms at the complex. The plans show a four-story, L-shaped building that will be constructed close to 31st Street and close to Michigan Street. The 325-space parking lot would be on the back side of the building, partially out of view of the two city streets. It looks like the main entrance to the complex would be on Michigan Street. Plans show an entrance on 31st Street, but the plans indicate it would be blocked with an emergency gate that the fire department could open when responding to an incident at the complex.

Also on the backside of the building is a courtyard area that will include an outdoor pool and pool house, two pickle-ball courts, an outdoor basketball court and a large playground. On the far east edge of the property, plans call for a dog park.

The playground plans are an indication that the project intends to market at least some of its units to families. All the apartments in the project will be rent-controlled, which is a requirement of receiving the affordable housing tax credits from the Kansas Housing Resources Corporation.

According to information previously submitted to the city, 80% of the units will require households to be at or below 50% of the area median income, with the remaining 20% available for households making up to 70% of the area median income.

The rent-controlled aspect stays with the apartment complex for the long term as part of the state’s tax credit program. The caps on rents are the tradeoff the developer makes for receiving the tax credits. The tax credits give developers a valuable asset to sell to investors who are looking to lower their tax liabilities. Developers on this project are scheduled to receive and then sell $45 million in tax credits to help fund the approximately $70 million project.

The use of tax credits to fund affordable housing projects has become a controversial one at the Kansas Statehouse. A bill is working its way through the legislature to eliminate the state’s participation in future affordable housing tax credit programs. The federal tax credit program would continue to exist, but the elimination of the state program essentially would halve the amount of credits available to Kansas projects, legislators have been told. The bill, however, has support from several GOP lawmakers, who contend the program is costing the state too much in tax breaks.

The use of the state tax credits has become a major affordable housing strategy in Lawrence. Developer Tony Krsnich has used the tax credits multiple times for affordable housing projects in the Warehouse Arts District and also for a senior living project that currently is under construction near 11th and New Hampshire streets.

The Union at the Loop — a 248-unit affordable housing apartment complex about a block south of the 31st and Michigan site — used state tax credits when it was constructed in 2022.

The good news for the 31st and Michigan project is that the state has already selected the development for a tax credit award. The pending legislation likely would not impact its tax credit status. Once the site plan is approved, construction on the project could begin this spring. The company has estimated a 2027 opening, if the project proceeds on schedule.