A proposed commercial, office and mixed-use development was back in front of the Newton City Commission this week, the result of meetings between city administrative staff and Occidental Management.
Occidental Management’s intended development is for a $70 million complex on an 80-acre property along South Kansas Ave. – south of Orscheln Farm and Home and Arby’s. The developers have owned the property for more than three years.
This year Occidental asked about creating a "tiff like" district — diverting new property taxes generated by the property to help developers pay for infrastructure and construction. That proposal has not gained much traction.
"It would involve the city, the county and school district being willing to forgo some of their tax revenues of the project," said Bob Myers, city manager for Newton. "... The feedback we provide to them was there was some uncertainty about if the county and school board would be willing to do that."
Two city commissioners, Glen Davis and Barth Hague, both said this week based on conversations they have had with county commissioners, they do not believe the county would move forward with that.
During a meeting with city administration, Occidental issued a memo to the city and wants to return to a standard approach — meaning there would not be a diversion of property tax revenues to pay for infrastructure upgrades. The city would pay for the bulk of streets and utility upgrades
Occidental asked for the city to placed traffic control lights on Kansas Avenue, add streets to the north and south borders of the property, construct water mains and sewer lines on the west side of Kansas Ave.
Estimated costs — which city administration called very rough numbers — to the city would be nearly $4 million for the first phase of the project. Of that, $3.2 million is for an extension to Wheatridge Drive and Padding Street and signalization of those streets.
"These are very rough numbers that we have put together," Myers said. "The good news is that there are sewer mains out there already (for the sites facing Kansas Ave.)."
Occidental also asked for the city to purchase street right of ways. That is very unlikely.
"We have never paid for right of way for development," Myers said.
Myers projected about $301,000 in new annual property tax revenues from the project. Myers said this would be a "break even deal" and the city would not see increased revenues for several years.
Myers said it is very possible that if Occidental cannot create a deal with the city, that the group would sell the property and walk away from the project.
"Let them sell it. I don't like the break-even thing. We have screwed up too many times," Davis said. "... I just don't want to do a crap shoot with the people's money, and that is what this looks like, a crap shoot."
The commission struggled with if they should back the project, but in the end, they did not
"This is a gamble. This is a big, big project. If we were to decline on this, is it possible that the next interested party will play this differently — or will we see things like this regularly," said Barth Hague. ... Looking at these numbers, if we knew this would work I would be more inclined to say I want to take this risk. ... The problem is it just will not work out this way. It could be better, it could be worse."
The commission instructed Myers to create a meeting with the county and the school district to talk about the possibility of partnering with them to look at property tax options with those two entities — including each of the three entities giving up a portion of the new tax revenues, rather than all of it. The use of sales tax, however, was a nonstarter for the city commission.
In other business the city:
• Set a calendar for the 2019 budget. The commission will first meet for a work session Feb. 27.
• Recognized Firehouse Subs for awarding a grant to Newton Fire/EMS for $16,500 to purchase thermal imaging cameras.
• Closed out industrial revenue bonds for Heir International, which paid off those bonds.
• Received an update on the activities of the Harvey County Drug Task Force.
• Received an update on the special law enforcement trust fund. The use of money in the fund is restricted by state statute to be used for special, additional law enforcement purposes. It can not be used in planning or adopting a law enforcement agency budget. In 2017 the fund collected $49,455 in revenue from asset forfeitures. Total expenses for 2017 was $69,670. The ending balance in the fund was $278,964.
• Reviewed an interlocal agreement to support the Harvey County Drug Task Force. The agreement includes a $1,000 commitment from each community signing the agreement.
• Received a financial report on the 2017 fiscal year. The city had budgeted $50 million in expenses, but ended with $45 million in expenses.
• Approved closure of Athletic Park Circle for a 5K run by Newton Bible Christian School.
• Approved the use of the bike path for a fund-raising run to benefit Girls On The Run.
• Approved the closure of two blocks of Main Street for a food truck event April 8.
• Approved the closure of Main Street for the Downtown Newton Car Show May 5.
• Received a report from Walk & Roll Harvey, a working group with Healthy Harvey that is replacing the ReNewton Bicycle Initiative.
• Received an update on the REAP organziation.