Following an hour-long public hearing Monday night that included objections from local property managers, the Great Bend City Council approved offering tax credits to Overland Property Group, the Leawood-based developer of the Reserves at Trail Ridge apartment complex.
The council gave its blessing to the creation of a Rural Housing Incentive District for Phase II of the project. Overland Property finished Phase I over a year ago, and it was also built using an RHID, which is a program through the Kansas Corporation Commission.
“We’re ready to go,” said Matt Gillam, Overland’s vice president of development. All the pre-construction work has been done, necessary city permits OKed and state approval of the RHID granted, but all were contingent on the council’s action.
“We have been trying to get affordable housing in Great Bend for 10 years,” Councilman Dana Dawson said. They have begged local investors to build to no avail, but now there is someone begging to build here and the city needs to move on it.
“I think they deserve our support,” Dawson said. He is optimistic about the future of Great Bend and sees the need for more housing.
“I do think we need the investment,” Councilman Joel Jackson said.
Concerns expressed
However, those needs and what that housing should look like were the topics of a lengthy discussion.
Trail Ridge is considered Chapter 42 housing under federal law, meaning it’s income qualified. With rents between $500 and $700 in Phase I, a family of four must make less than $38,000 to qualify.
The federal funding is managed through the Kansas Housing Resources Corporation. Gillam and his team work with this agency.
“There is no need for more income-qualified housing in Great Bend,” said Lynn Flemming, executive director of the Great Bend Housing Authority, managers of the “high rise.” She has 13 vacancies and has never had this much trouble finding residents.
There is a difference. The high rise offers subsided rent, but facilities like Trail Ridge do not.
But, Flemming was not alone. Other property owners are having problems finding tenants as well.
“Personally, I don’t think we need anymore housing,” said Jason Mayers of MGM Properties in Great Bend. He is seeing about a 10-percent vacancy rate.
Besides, he said, Overland Property is already receiving tax credit for Phase I and don’t need any more. “They should pay like everyone else,” since the local owners don’t get any tax breaks.
Nonetheless, Gillam said they need the credits to make the project viable. They can’t justify building a market-rate project in rural areas.
The details
The developer seeking a rural housing incentive district for the $1.2 million phase two of the project that involves 48 multi-family units in two residential three-story buildings, plus one one-story clubhouse building on Grant Street across from Wal-Mart. This is a mirror image of phase one which is already in place and also falls under an RHID, except it will include one-bedroom apartments in addition to two-and three-bedroom units.
The yearly taxes on that $1.2 million would be $26,788. Under the RHID, $22,618 would be rebated to the developer for 15 years, after which it the full amount would be assessed.
The company will also spend $5 million to build the complex. Some of the subcontractors will be Great Bend companies.
But, Gillam said the company is dedicated to the community. “We’re not going anywhere.”
Overland owns and manages the apartments. By law, it must agree to do so for at least 30 years.
They will also pay full sales tax amounts. Every dollar spent on construction generates $12 in the local economy, he said.
“We’re excited about being a part of the community,” Gillam said.
There was another concern raised. That was what appeared to some on the council as a high rate of crime at the Trail Ridge complex.
Great Bend Police Chief Cliff Couch said pulled reports for the past year and found 200 calls involving Trial Ridge or its residents as of Oct. 31. Of those, 163 took place on-site or had some direct connection to the apartments.
These ranged from thefts to civil matters to domestic disputes, he said.
He has spoken to the new local managers who have assured him they are working on this. “They are good people,” he said.
But, “I don’t think you can manage your way out of it,” the chief said. “You are always going to have some problems.”
He doesn’t want more housing like this to become a magnet to draw more trouble makers to town. “There are pros and cons. You just need to go into it with your eyes open.”
Gillam admitted there have been some mismanagement issues. Now, there is a new team in place.
Residents are supposed to undergo an extensive vetting process including background checks. They must also sign an agreement outlining a zero-tolerance to criminal actions, actions that are grounds for eviction.
Perhaps, he said this has not been enforced properly. But, that will change.
Gillam said Overland wants a good working relationship with the police and the community as a whole.
Background
Overland Properties has facilities in Kansas and surrounding states, including Hays and Garden City. These cities are after the company to build more.
And, he said, more housing could lead to more commercial development. Often, commercial developers look at the number of new units in a city when making their decisions.
However, in light of changing state laws, the state’s imposition of a tax lid and increased local tax burdens, council members made it clear at their Oct. 3 meeting that offering any tax incentives in the future may not be in the city’s best interest. Going into the meeting Monday, approval was not a given.
An RHID is a Kansas Department of Commerce program designed to aid developers in building new housing by assisting in the financing through tax credits that are returned to the developer until the project is completed, typically for 15 years. RHIDs are available for any small- to medium-sized city or county in Kansas.
The city would cover all legal and professional costs, fees and expenses incurred by city with regard to the preparation of the agreement and any and all other ordinances, resolutions or other documents necessary for implementation of the district as well as for representation and appearances of legal counsel at any hearings or proceedings required to implement the district.
Trail Ridge Partners are responsible for all construction and development expenses.
