The Lawrence City Commission on Tuesday will consider a developer’s request for tax breaks to build 48 affordable units for people ages 55 and up in downtown Lawrence.
The New Hampshire Street Lofts project is proposed for a lot that’s currently empty at 1000 New Hampshire St. The lot, on the east side of New Hampshire, is north of an old church that now houses law offices and south of the Berkeley Tower office building.
The four-story building would have 15,000 square feet of commercial/retail space on the ground floor topped by about 54,000 square feet of affordable units. The 48 total units would include six studio, 35 one-bedroom, six two-bedroom and one three-bedroom, according to agenda materials.
There would be no market-rate units in the building.
At least 15% of the units would be for people with incomes less than or equal to 30% the area median income (AMI). Effective in May, the AMI for Douglas County is $94,600; 30% of the AMI is $19,900 annually for a household of one person, $22,750 for a household of two people. Rental rates at that income level range from $440 for a studio up to $560 for a two-bedroom unit, according to the agenda item.
Developer Tony Krsnich, of Flint Hills Holdings Group LLC, estimates that the capital investment for the project will be about $9 million, according to the agenda item.
Krsnich is seeking a 15-year, 95% Neighborhood Revitalization Area (NRA) property tax rebate as well as Industrial Revenue Bond (IRB) financing to make project construction materials sales tax exempt.
The project already has secured about $3.33 million in funding, which includes $450,000 of City of Lawrence ARPA (federal COVID-19 relief) funds and $100,000 from the city’s Affordable Housing Trust Fund. It also has been approved by the Kansas Housing Resources Corporation for $890,000 each in federal low-income housing tax credits and Kansas Affordable Housing Tax Credits, and $1 million from the National Housing Trust Fund, according to a letter in the agenda materials.
The units must remain affordable for at least 30 years.
“The 30-year affordability period is reasonable because units will require significant rehabilitation by that point in time and the 30-year affordability period is also the threshold for the U.S. Department of Housing & Urban Development (HUD)’s investments,” city staff members wrote in the agenda item.
Plans also call for a community room, exercise facility, computer room with free Wi-Fi and a community garden or green space.
City staff members are recommending the commission approve the tax breaks, noting that the lots have long been vacant.
“Some projects deliver benefits that can’t be captured in quantitative studies. This project, for example, will provide 48 affordable housing units for residents 55+, substantially increasing the City’s affordable real estate inventory,” city staff members wrote in the agenda item. “The increase in affordable units is likely to have an impact on retaining residents that might otherwise have to find housing outside the community. However, this comes at a financial cost to the City, wherein the property taxes received after the rebate will likely be less than cost of City services to the property.”
If the Lawrence City Commission gives initial approval on Tuesday, the project will go to the Lawrence school board and Douglas County commissioners to consider the district’s and county’s parts in the tax incentives.
Six members of the city’s Public Incentives Review Committee present for an Aug. 9 meeting voted unanimously to recommend that the City Commission approve the tax incentives. Douglas County Commission Chair Patrick Kelly and Lawrence school board Past President Shannon Kimball are both members of that committee.
Kelly said during that meeting that Krsnich has “been a solid developer” in the community.
“One thing that I really appreciate is he brings funding from other sources, and so I think it’s really important that we recognize that and do our part to increase affordable housing through tax incentives whenever possible,” Kelly said.
Kimball said that from the perspective of the school district, the project “will not have a negative impact on us.”
“It won’t grow our enrollment, but I know that this is also a type of housing that our community sorely needs,” she said.
Krsnich told the PIRC the building is almost identical to the Penn Street Lofts at 801 Pennsylvania St., but “this building has more of a stone presence” to complement the nearby Douglas County Courthouse and the church next door.
Plans call for 62 surface parking spaces, equivalent to about 1.3 spaces per residential unit. Krnsich told the PIRC that the need for parking for seniors is in less demand than it is for multifamily or general occupancy units. “We think that we’re going to have pretty good excess parking here on this project,” he said.
Altogether, the tax incentives are estimated to cost the city, county, school district and state about $1.28 million. With the city’s addition of $550,000 from ARPA funds and the Affordable Housing Trust Fund, the total is about $1.83 million:20230905-1000-NH-NRA-IRB-cost
The Lawrence City Commission will meet at 5:45 p.m. Tuesday, Sept. 5 at City Hall, 6 E. Sixth St. Meetings are open to the public and livestreamed on the city’s YouTube channel, youtube.com/@lawrenceksvideo.
Commissioners on Tuesday will also consider final approval of the 2024 budget and capital improvement plan. The budget keeps the mill levy flat, which will mean an increase in taxes for most property owners as assessed valuations have increased.
The commission hears public comment in person and via Zoom; click here to register for the Zoom meeting. Written public comments can be emailed to email@example.com until noon the day of the meeting.