The city commission spent about an hour hashing out the details of a deal — namely who would pay for what — and listened to concerns from members of the public over property taxes, and who would not be paying them, before finding terms that would give Mennonite Housing the option to purchase a piece of city-owned property at First and Boyd.
The terms the commission agreed to on Tuesday were a purchase price of $3,000 per acre, with Mennonite Housing paying all costs for water mains, sewer extensions, street construction to the project, street lights and a retention pond needed for drainage in the future.
Not all of those costs are known, though the retention pond is estimated at $250,000. Mennonite Housing will review costs with city staff and make a decision this week in order to apply for state tax credits.
The contract is an option to buy — if Mennonite Housing does not, or cannot, move forward with development within two years, the city will retain ownership of the property. The two-year window would allow Mennonite Housing to make at least two grant and tax credit applications for the project.
Mennonite Housing came forward with a senior housing project proposal about two weeks ago, and during that time a myriad of options were discussed for the project to move forward, including the city constructing the retention pond and the city donating the acreage needed.
The sticky wicket is that Mennonite Housing is a nonprofit that can, and will, apply a permanent property tax abatement granted at the state level.
Those ideas brought ire and led to Tuesday's lengthy discussion.
"I do not like the idea of giving away the farm and no property tax revenue," said Laurie Hartke, a Newton resident at the commission meeting. "I know we need senior housing, that is fine. I wonder, though, if it is low-income seniors from out of town, just how much income the city is going to receive. ... (Mennonite Housing) seems to want to be given everything and not give anything back. I do not really like that."
The only income source left to the city is sales taxes from residents and utility income. The commission took great pause with what upfront costs could be for the city and a desire that those be minimized or eliminated.
"We owe it to our taxpaying citizens to consider, if we are a partner in this, that (Mennonite Housing) put up as much as possible, if not all costs, because you will not be paying property tax," said Commissioner Kathy Valentine.
The agreement would allow for Mennonite Housing to move forward with phase one — about 30 units — of a project that could be more than 120 units and a clubhouse.
Mennonite Housing would like to apply for Kansas Resource Housing Corporation funds to assist with the project. The KRHC can make grant funds and tax credits available for qualifying projects. At this time, the project would be a tax credit project. One of the requirements is that a percentage of units be dedicated for low-income housing.
Mennonite Housing Rehabilitation Services Inc. was started by several churches in the Wichita area in 1975 and provides affordable housing options for people who are low-income and elderly.
According to CEO Byron Adrian, Mennonite Housing has been doing tax credit housing projects since 1990. The organization has operated 19 facilities with tax credits.
“This would be our 20th,” Adrian said. “Currently we also manage the properties we develop. Currently, we have more than 900 units that we manage.”
The organization is currently constructing a similar project in Valley Center.
In other business, the commission:
• Received a presentation on the upcoming Safety Fair being held March 7 at the Chisholm Trail Center.
• Annexed property northwest of S.E. 12th Street and S. Hillside Road for a project extending a water main to the Newton City/County Airport.
• Approved a lease agreement with Hesston College for Hangar K at the airport, raising the rent of Hangar K from $1,385 to $1,800 each month.
• Learned that city staff mailed 6,800 letters sent on recycling changes, and about 400 have received a response. Of those 400, 191 want to continue recycling and 199 do not.