Memorandum

City of Lawrence

City Manager’s Office

TO:	David L. Corliss, City Manager
CC:	Diane Stoddard, Assistant City Manger Casey Toomay, Assistant City Manger
FROM:	Britt Crum-Cano, Economic Development Coordinator
DATE:	September 23, 2014
RE:	9 Del Lofts, LLC request for 900 Delaware Street

Please place the following item on the regular City Commission agenda:

Receive recommendation from the Public Incentive Advisory Committee and receive request from 9 Del Lofts, LLC, for a Neighborhood Revitalization Area (NRA) for the property at 900 Delaware Street, Lawrence Kansas

Hold a public hearing on the establishment of a Neighborhood Revitalization Area (NRA) at 900 Delaware Street. After the public hearing, consider first reading of Ordinance 9040 establishing the revitalization area and approving the NRA plan.

Overview

The City has received a request letter and application from 9 Del Lofts, LLC to establish a 15-year, 95% Neighborhood Revitalization Area (NRA) at 900 Delaware Street. This request was received by the City Commission at its August 26, 2014 meeting and was considered by the Public Incentives Review Committee for review and recommendation on September 9, 2014.

Tony Krisnich (project Developer) is proposing the development of vacant land, located at 900 Delaware Street into a mixed-income, multi-family housing complex. Located on the southeast corner of 9^th Street and Delaware Street, adjacent to the East Lawrence Historic Industrial Warehouse District, in Lawrence, Kansas, the project calls for approximately 43 apartment units: 18, one-bedroom units (five at market rate); 16, two-bedroom units (three at market rate); and four, three-bedroom units (one at market rate).

Background:

Kansas Law enables cities to establish neighborhood revitalization areas in order to encourage redevelopment under the Neighborhood Revitalization Act (NRA). The establishment of a revitalization area enables a property owner to receive a rebate on a portion of the incremental increase of property taxes associated with an improvement project within the area.

9 Del Lofts, LLC is requesting that the City, Douglas County and USD 497 all participate in the revitalization program. Douglas County and USD 497 will need to determine its level of participation and information has been forwarded to the County Administrator and Superintendent of Schools regarding the request.

Staff Analysis

City Staff has completed a cost-benefit and “but for” analysis of the proposal, in accordance with the City’s NRA policy. Analytical results are presented in Staff’s Technical Report.

NRA Policy

The City of Lawrence adopted an updated NRA policy in the fall of 2011. Staff’s technical memo summarizes the policy issues as it relates to this particular NRA request. It appears the request would meet the parameters of the policy.

Draft Neighborhood Revitalization Plan

Staff has prepared a draft Neighborhood Revitalization Plan, which is required by State statute, for the 9 Del Lofts, LLC request. This plan should be reviewed by the City Commission, the Public Incentive Review Committee, and the taxing jurisdictions. The plan includes a rebate schedule and also includes provisions for Douglas County to retain $100 annually as an administrative fee for the duration of the rebate program.

Next Steps/Calendar

A draft calendar has been prepared to consider items related to this request. The calendar envisions a public hearing to be scheduled with the City Commission for September 23, 2014. After the public hearing, the School Board and County Commission will also consider their participation regarding the project (anticipated in October, meeting dates are still being confirmed). The City Commission would take final action once School District and County participation is known.

Staff Recommendation

Due to the affordable housing component of the project and the strong intangibles that are not represented in the numbers, Staff would recommend participation at the requested 95% level for all jurisdictions for a 15-year period. While the NRA policy suggests a 10-year limit, the policy also suggests that longer durations may be appropriate if the analysis bears out the need. In this case, the “but for” test points to the need for the NRA incentive in order to make the project viable. Adding to the 9 Del Loft development and other housing opportunities in the area, the project will help to sustain the density for vibrancy in the area.

PIRC Recommendation

At the 9-9-2014 PIRC meeting, the committee voted unanimously to recommend the establishment of a 15-Year, 95% NRA. Draft minutes of the September 9, 2014 PIRC meeting are attached.

Requested Action

Receive recommendation from the Public Incentive Advisory Committee and receive request from 9 Del Lofts, LLC, for a Neighborhood Revitalization Area (NRA) at 900 Delaware Street.