Memorandum
City of Lawrence
Finance Department
TO: |
Dave Corliss, City Manager
|
FROM: |
Ed Mullins, Finance Director
|
Date: |
May 18, 2012
|
RE: |
Kansas Historic Tax Credits |
Background
On March 28, 2012, the City of Lawrence received a certificate from the Kansas Historical Society that the Carnegie Library rehabilitation project was granted $153,775 in Kansas income tax credits. The tax credit amount was 25% of the $615,117 in eligible expenses. The City of Lawrence issued a request for proposal to purchase the tax credits on April 20th with a response deadline of May 7, 2012. A list of interested bidders was obtained from the Kansas Historical Society. The request asked bidders to state the percentage of the tax credit they are willing to pay the City.
Analysis
The City received four responses to our request. A summary of the responses is listed below.
Clock Tower Tax Credits 88.1%
Henry Block 91.0%
CE Capital Funding 89.0%
William Stueck 93.0%
Recommendation
The Finance Department recommends that the proposal from William Stueck be accepted. Mr. Stueck has provided a transfer agreement to formally transfer the income tax credits from the City to him. The City of Lawrence will be required to pay the State of Kansas $300 and complete a transfer form to finalize the transaction. Once complete, Mr. Stueck will wire $143,014.47 to the City. A copy of the Sales Agreement for Kansas Historic Rehabilitation Tax Credits is attached and is currently being reviewed by the City Attorney. If a subsequent audit is performed and the amount of eligible expenses is reduced, the City of Lawrence will be required to refund 25% of the reduction to Mr. Stueck. Part of the proceeds from the sale will be used for additional roof and exterior repair work remaining on the Carnegie building.
The City Commission is requested to authorize the City Manager to sign the Sales Agreement.