Memorandum
City of Lawrence
City Manager’s Office
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TO: |
David L. Corliss, City Manager |
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CC: |
Diane Stoddard, Assistant City Manger Cynthia Wagner, Assistant City Manger |
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FROM: |
Britt Crum-Cano, Economic Development Coordinator |
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DATE: |
June 3, 2014 |
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RE: |
9 Del Apartments: Infrastructure and Improvements Request |
Introduction
The City received a request on May 20, 2014 from Developer Tony Krsnich for City assistance with public improvements related to the proposed 9 Del Apartment project. This $7.265 million project, to be located adjacent to the Historic East Lawrence Warehouse District at southeast corner of East 9th Street & Delaware Street, will provide 43 apartments, 34 of which are planned to be rent restricted units, and the remaining nine to be market rate units. Construction on the project is anticipated to start in July 2014, with estimated completion in January 2015.
As an affordable housing project, the Developer is seeking Federal Low Income Housing Tax Credits (LIHTC) to help fund the project. Unlike the nearby Poehler project, 9 Del is new construction and not eligible for historic tax credits. Comparatively, as per the Developer, this reduction in funding resources raises the need for monetary assistance from other sources to make the project feasible to undertake.
Consequently, Mr. Krsnich has indicated he will apply for a 10 year, 95% Neighborhood Revitalization Area (NRA) shortly. This future NRA request will be subject to City, County, and School District processing and the due diligence necessary to establish an NRA. Given the procedural timeline (estimated at approximately 6-8 weeks) for processing and due diligence, and the requirements on the 9 Del project from its other investors and funding sources, the Developer is asking for City Commission authorization for infrastructure assistance prior to the establishment of an NRA.
Background
Tony Krsnich (project Developer) has completed and is currently working on multiple renovation projects within the East Lawrence Warehouse Arts District. He developed the historic Poehler building at 8th and Delaware Streets into affordable housing, loft-style apartments. That project opened in July 2012, and continues to enjoy strong demand and success. The building provides environmentally friendly features such as one of the largest solar arrays per square feet of any affordable, historic housing district in the nation, and a universal electric car charging station for building tenants’ use free of charge.
To spur additional investment in the neighborhood, the City provided first phase supporting infrastructure related to the Poehler project. Improvements were completed in 2012 and included providing adequate storm water services and improvements to enhance the watersheds ability to manage storm water runoff more effectively and efficiently; replacing a 100-year old, inadequately sized waterline with the correct capacity line, completing the loop and upgrading to current design standards; and providing Complete Street aspects such as pedestrian lighting, landscaping, sidewalks, and on-street parking. The value of Phase I improvements is approximately $1,051,577.
In 2013, Mr. Krsnich and his development completed the redevelopment of the Cider Arts Building which delivered an arts gallery with events space on the lower level and office space on the upper level.
To support the redevelopment of the Cider building and other on-going district redevelopment efforts, the City provided second phase improvements for the district. These improvements were completed in 2013 and included 9th Street reconstruction and intersection improvements, Pennsylvania Street reconstruction, 8th Street and Pennsylvania Street parking, and Utility and safety improvements. The value of Phase II improvements is approximately $695,430.
Infrastructure/Improvements Requested (Phase III)
Staff has compiled a breakdown of the requested items for the next phase of improvements, estimated expenses and possible funding sources, as shown on the following table.
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Requested Public Assistance: 9 Del Apartments |
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Description |
Developer Request |
City Funding Source |
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Relocation of Sanitary Sewer Main |
$69,505 |
Utilities Fund |
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Site Water Line (Fire and Domestic, New Fire Hydrant) |
$17,545 |
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Sanitary Sewer Connection to Building |
$3,355 |
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Site Storm Sewer |
$37,840 |
Storm Water Utilities Fund |
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Public Street Improvement Plans (Street Storm and Patching) |
$16,157 |
General Fund |
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Private Drive-9th Street Extension to east and 10' trail along Delaware |
$47,565 |
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Subtotal |
$191,967 |
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Development Fees |
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Water |
$45,000 |
Waived Fees |
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Meter |
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Sewer |
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Burying of overhead utility lines |
$34,000 |
General Fund |
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TOTAL |
$270,967 |
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(For additional pricing details, refer to attached estimates.)
Staff Recommendation
Staff is supportive of the project. However, given the current budget and availability of resources within the General Fund, there is not enough money available to support the estimated $97,722 in improvements:
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Public Street Improvement Plans: |
$16,157 |
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Private Drive/Extension |
$47,565 |
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Burying of Overhead Utility Lines: |
$34,000 |
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Total |
$97,722 |
Funding these items would either require spending down the General Fund balance or raising the mill levy to cover the amounts allotted from the general fund. An increase of 0.116 to the mill levy (2015 Budget) would be required to cover the $97,772 in expense.
Action Requested
City Commission to authorize funding for public improvements related to 9 Del Apartments in support of the on-going revitalization of the East Lawrence Warehouse District, if appropriate.
If improvements are authorized from the General Fund, the City Commission to decide if the amount of $97,722 requested will be covered by spending down the General Fund balance or raising the mill levy.