City manager Bob Myers believes having two commercial developments proposed is a good thing for Newton, and an indicator that future of Newton includes economic expansion.
“I think both projects demonstrate that developers are finding Newton is an active, thriving community which is positioned for growth,” Myers said. “Especially during the last 10 years or so, people throughout the region are increasingly coming to Newton for healthcare services, educational opportunities, recreation and events.”
However, at this time one of those commercial developments is moving forward, while another is apparently still stuck in neutral.
Rolling Hills Sixth Addition, a commercial development east of I-135 south of First Street, moved forward last week when the city commission approved engineering contracts for infrastructure improvements. Included in the improvements are $116,000 for sanitary sewer, $187,000 for water system improvements and $340,000 for paving for the development which is zoned as commercial.
Those same needed improvements for a commercial development by Occidental Management on S. Kansas Avenue, however, have not been approved — despite the project being proposed years ago and ongoing negotiations with the city.
Myers said the reason one moved forward last week, and the other remains in limbo, is the way each project is structured.
“The infrastructure improvements for the Rolling Hills commercial development are slated to be paid 100 percent by special assessment (taxes),” Myers said. “... The Occidental development would, as now envisioned, require the deferral of some of the new taxes produced out of that development to help pay for some of the needed infrastructure improvements.”
In the case of Rolling Hills, the city will assess a special assessment to the property within the addition. The developer, as the sole owner, will be responsible to pay those special assessments until they have sold property.
In the case of Occidental, the total project, all phases, is estimated at $82 million in construction costs. The reparation piece requested — tax money funneled back to Occidental — was estimated at $13.8 million when Occidental last presented to the commission in November. Those reimbursements would be for sewer/water mains and some streets. Unclear is if the county and school district would agree to deferring new tax revenues generated in the development — or if the city is will to do the same, and how much of those revenues the entities are willing to surrender.
If the project moves forward, the first phase proposed is a commercial development off of Kansas Avenue. That phase is estimated to cost $15.6 million to construct, with Occidental responsible to make $7.2 million in equity available up front. Occidental plans to sell properties fronting Kansas Avenue for about $2.1 million — and use those funds to assist in financing later phases of the development.
Later phases include a $15.8 million office development along an east/west street that has not been constructed along the southern border of the development. Phase three is a projected $23.6 million senior living area next to phase four, which is a $26.8 million apartment complex. Phases three and four are to be along a yet-to-be-constructed east/west street along the northern part of the development.
Using a pay-as-you-go model, all infrastructure and street work — except the work on Kansas Avenue — Occidental would front the money and look for a payback later.
“To bring these larger retailers to a community our size, where sales volumes as would be expected in a larger city, some assistance in typically needed with the infrastructure costs in order to make this work,” Myers said. “We are still working with Occidental to determine what that assistance level needs to be. Once we know that, then we will have to determine if the community would be supportive of that kind of an investment in order to help attract this type of development.”