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City debates housing guidelines

6/14/2013

By DAWNE LEIKER

dleiker@dailynews.net

The question of whether to add a Rural Housing Incentive District policy to its economic development guidelines continues to vex Hays city commissioners, as they voted Thursday night to table consideration of the policy until July 2.

The policy, discussed by commissioners in May, was brought to Thursday's meeting.

Consideration of the policy was tabled Thursday based on a request by Commissioner Ron Mellick that it be amended to encourage the building of low-income housing.

Mayor Kent Steward voiced objections to approving an RHID policy. His problem with the tax increment approach, he said, was giving tax money to a developer, who in turn is allowed to make a profit on rentals or houses.

"And that all sounds great, until you stop to consider that if he isn't paying those taxes, then somebody else has to," Steward said. "And that somebody else includes other people in the community who are hurting as much or more than the specific individuals that you're going to help.

"I think it's fundamentally flawed."

The policy developed by city staff contains elements specific to Hays, Assistant Manager Paul Briseno told commissioners.

"The developer has to prove the need to you as a commission," he said. "And in doing so, they need to update a housing needs assessment within every application."

In addition, the policy requires a minimum of 10 units as well as an assurance drought-tolerant landscaping and efficient water fixtures will be included in the developments.

An RHID captures 100 percent of incremental real property taxes created by a development in an attempt to reduce overall costs. The developer, in essence, pays taxes only on the value of the undeveloped land prior to improvements.

Developers seeking use of the incentive would be subject to a four- to six-month review process, which would require submitting applications to the state, Briseno said.

Overland Property Group, in the hope of developing a 32-unit apartment complex near Hays Medical Center approached commissioners in February with a request to establish an RHID.

OPG, according to information Ellis County Economic Development Executive Director Aaron White recently received, did not receive state tax credits for the Hays project. The primary reason, White said, was no RHID was in place in Hays.

"With the state, one of their major criteria points for approving a tax credit policy is that there is some sort of additional community buy-in outside of the initial resolution to apply for the tax credits," he said. "It doesn't necessarily have to be an RHID, they also look at projects that can be built within neighborhood revitalization districts or projects that are utilizing industrial revenue bonds.

"... But without one of the forms of community buy-in, they are unlikely to approve tax credits for this type of housing for a community."

Commissioner Eber Phelps asked if developers other than OPG had shown an interest in an RHID policy in Hays. White said he wasn't aware of other local developers who had looked into the policy. However, he said staff of Hays Housing Authority, a 32-unit low- to moderate-income housing development, informed him they have a waiting list of 50 people.

In other business, commissioners:

* Approved an ordinance levying special assessments for the costs of improvements to Golden Belt Fourth Addition.

* Approved a resolution authorizing the sale of general obligation refunding and improvement bonds.

* Approved a resolution to issue revenue bonds by the Wisconsin Health and Educational Facilities Authority for the defeasance of Via Christi Health Care facility revenue bonds and a resolution authorizing conveyance of facilities back to Via Christi Village.

* Approved purchase of a Walker MD mower for cemetery use.

* Authorized the city manager to submit an application for federal assistance for the engineering of terminal improvements at Hays Regional Airport.

* Voted to establish a special benefit district for construction of improvements to lots 1-24 in Golden Belt Eighth Addition.

* Approved rezoning, final plat and annexation of Golden Belt Fifth Addition.

* Heard a report from City Manager Toby Dougherty on the findings of the Housing Study Group.

* Approved the acquisition of a temporary construction easement and a permanent drainage easement from the Smoky Hill Country Club for proposed reconstruction of 41st Street from the U.S. Highway 183 Bypass to Hall Street.

* Commissioner Henry Schwaller IV was absent.