Lawrence city commissioners voted 3-1 Tuesday to approve sales tax breaks for a new market-rate, “townhome-style” apartment complex slated for northwest Lawrence.
The complex will include 131 studio, one-, two- and three-bedroom units, to be built on the northeast corner of Wakarusa Drive and Queens Road.
The applicant is MRES Lusso Holdings LLC, a Nebraska-based real estate investment company whose registered agent in Kansas is the Corporation Service Company.
Developers asked the commission to approve up to $37.3 million in industrial revenue bonds for sales tax exemptions on eligible construction materials. However, “Based on estimated local purchasing assumptions, the anticipated impact to the City’s local sales tax revenues is approximately $80,000,” according to the agenda.
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“For many large construction projects, they frequently utilize regional and national suppliers, meaning many purchases occur outside of Lawrence and would not generate city sales tax regardless of whether an IRB is issued,” Susie Carson, the city’s director of economic development, told commissioners.
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“… The bonds are issued in the city’s name but are privately financed and repaid for the by developer,” Carson said. “In this case, the only benefit requested is the sales tax exemption on eligible construction materials. There is no property tax abatement, no city loan, and no city debt obligation.”
Once it’s built, the complex will generate property tax revenue for the city and other local government entities in perpetuity, Mayor Brad Finkeldei said during the commission’s discussion.
Carson told commissioners that the developers had voluntarily agreed to make 10% of the units affordable for folks whose incomes are at or above 90% of the area median income for five years.
AMI is a value defined each year by the federal government. For a household of four, 90% of the AMI would be an annual household income of $99,360; in order to be affordable under the legal definition, monthly rent could not exceed $2,484. For a household of one, 90% of the AMI would equate to annual income of $69,580, and rent could not exceed $1,740.
The developers’ voluntary change still does not mean the project meets the city’s criteria for an affordable housing project, but a recent study has found that the city needs more of all types of housing units in order to increase affordability.
“The conversation is just about housing at all price points and unsticking the market,” Carson said.
Kassie Inness, president of Metonic Real Estate Solutions in Omaha, Nebraska, spoke to the commission via Zoom on Tuesday.
“We are genuinely excited to expand our presence here and become a lasting part of the Lawrence community,” Inness said.
Finkeldei and Commissioners Mike Dever and Amber Sellers voted in favor of the IRBs; Vice Mayor Mike Courtney voted in opposition. Commissioner Kristine Polian was not present for the meeting.
Courtney said he would vote no to the IRBs because although he supported the project and wants it to be successful, it does not satisfy the city’s affordable housing provisions.
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Mackenzie Clark (she/her), reporter/founder of The Lawrence Times, can be reached at [email protected]. Read more of her work for the Times here. Check out her staff bio here.
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