Memorandum

City of Lawrence

 

TO:

 

Mayor and City Commissioners

FROM:

David L. Corliss,  Interim City Manager              

                            

CC:

Debbie Van Saun, Assistant City Manager

Date:

August 3, 2006

RE:

Next Steps in Implementation of Kansas Neighborhood Revitalization Act

 

 

The City Commission has frequently indicated an interest in implementation of the Kansas Neighborhood Revitalization Act (NRA) as a tool to encourage quality redevelopment of portions of our community. This memorandum requests Commission direction on beginning the implementation of an NRA district or districts.

 

Background

 

The NRA (K.S.A. 12-17,114 et seq.) allows the City to adopt a revitalization plan and designate an area as a revitalization area.   In essence, a property owner within a designated revitalization area may request a rebate of a portion of the incremental increase in the property taxes resulting from improvements by the taxpayer to property – all subject to the requirements of the revitalization plan.  The rebate is only from municipalities (city, county and/or school district) which have agreed to participation in the revitalization plan.  The revitalization plan must include 12 required elements, including the criteria for determining eligible property, length of rebates, amount of rebates, and other criteria as determined by the governing body.  Staff has conducted research on the NRA as used in other Kansas communities.

 

800 Pennsylvania Project

 

The 800 Pennsylvania project appears to meet the statutory requirements for the formation of an NRA district and plan. (K.S.A. 12-17,115 (c)(3) allows an “area in which there is a predominance of buildings or improvements which by reason of age, history, architecture or significance should be preserved or restored to productive use.” )  The current assessed valuation of the property in the proposed redevelopment is $944,340.  The developer has indicated that a post-development – at full and final build out – valuation would be $2,218,451.   An attached spreadsheet provides additional details.  The City’s total incremental property tax increase at full and final build out would be approximately $33,000 in the first year assuming the current City mill levy. Rebating a portion of the incremental property tax increase to property owners in the 800 Pennsylvania project could be a means of responding to the request for public financial participation in the cost of public improvements associated with the redevelopment.

 

Next Steps

 

Commission direction is needed to begin implementation of an NRA district and the implementation of a City policy for NRA use in our community.  Policy direction is needed on several items, including but not limited to:

 

1)          Location of NRA district

2)          Qualifications for properties to receive a rebate, e.g. will all property owners which make an improvement to their property receive a rebate? Only selected locations?

3)          Amount of rebate

4)          Should the City invite Douglas County and USD 497 participation in the plan and rebate requirements?

5)          Length of rebate

6)          Should there be a minimum threshold private investment amount before an NRA district, plan and rebate are provided for any project?

 

As staff develops the NRA district and revitalization plan, we will also present a draft City policy which can respond to the policy directions the Commission provides as outlined above and as will be further refined.