The Great Bend City Council Monday night directed city personnel to look into a request by local resident Dennis Call to have the city take back two lots on Prairie Rose Drive. The tracts sit in the Amber Meadows rural housing incentive district.
Call told the council he had purchased 15 lots in the development as an investment a few years back. At that time, he said, the housing market was strong and his prospects were good.
However, the market dropped off, he said. He has managed to sell seven of the lots with homes, but still has five houses for sale, one lot with only a basement and two vacant lots.
“It would help me greatly not to have those two lots to deal with,” he said. He doesn’t foresee building two more houses.
The market is looking better now. Since that the “black cloud” has passed,” Call said he can likely sell the five homes, using the funds to build a house on the basement. This sixth house he believes he can sell as well.
That leaves the pair of empty lots. Call said real estate agents have told him that the city could probably unload the lots faster than he could.
Call pays $217 in taxes on the lots, so if the city took them back, this all it would lose since no money changes hands. However, if the city sold the tracts and house were built, it would collect roughly $3,000.
There is a catch, since the land is in the RHID, City Administrator Howard Partington said. An RHID is a program through the Kansas Department of Commerce that offers tax credits to encourage residential developments. It assists in the financing through tax credits that aren’t returned to the developer until the project is completed.
The RHID program lets qualified developers use money they would otherwise pay in increased property taxes. Their taxes do gradually increase over several years.
There is a stipulation to get those tax breaks. The developer must build on the property in a certain period of time or they would own the city money.
In this case, should this deadline lapse, Call would owe the city about $37,000.
Now, city staff members will research the pros and cons of the proposition and report back to the council at a future meeting.