City approves IRB advisability, $250-per-unit PILOT and fee reductions for two multifamily projects

Hutchinson City Council voted May 6 to approve the advisability of issuing industrial revenue bonds (IRBs) and to authorize payment-in-lieu-of-tax agreements for two proposed multifamily projects, and to grant fee reductions intended to help each application for Low-Income Housing Tax Credits (LIHTC).

The council approved a resolution finding advisability of issuing IRBs for the Zimmerman Hutchinson Park project — a proposed 48-unit development near North Lorraine and Eleventh — and for Plaza Trails, a 36-unit project near Dillon’s on 30th Street. The council also approved $40,000 reductions in combined building-permit and water-service tap fees for each project, and authorized a $250-per-unit annual payment-in-lieu-of-tax (PILOT) that staff said would offset the fee waivers over time.

Why it matters: both developers plan to pursue state and federal affordable‑housing tax credits. Council and staff said IRBs (which allow sales‑tax relief during construction and open the option of a property‑tax exemption) and local fee waivers improve the competitiveness of Hutchinson applications for those credits.

Staff and developers’ descriptions Angela Richard, Hutchinson’s finance director, outlined the IRB and PILOT mechanics: "By approving the advisability of issuing IRBs for this project, this will allow them to bond the project in 2026. As part of that, they are relieved of sales tax and then can apply for property tax exemption as well." She also said the city is not liable for project costs or debt service.

Jason Laney, building official, recommended the fee reductions and described how they help score applications: "The project advances these priorities by adding market-rate apartments to Hutchinson's aging housing stock... Given the project's direct alignment with these strategic goals... staff recommends that city council approve the request of $40,000 reduction in building permit and water service tap charges for the proposed Zimmerman Hutchinson Park project." Laney gave nearly identical figures and recommendations for Plaza Trails.

Developer details and unit mix Jeff Beckler, representing Zimmerman/Hutchinson Park, described the 48-unit proposal and said the developer would work with staff on sidewalks and site design. TJ Leon, representing JS Devco for Plaza Trails, said the 36 units would be a mix of two- and three-bedroom units: "We're looking at 24 two‑bedroom and then 12 three‑bedroom. It will be a mixture of 60% AMI as well as 6 market rate units," he said.

How council acted Council voted to approve the IRB advisability resolutions for both projects and to include the PILOT agreement of $250 per unit per year. Council also approved the building permit and tap fee reductions for both projects (each developer requested a $40,000 combined reduction). Roll-call votes on the motions were recorded as: Richardson — yes; Garza — yes; Bass — yes; Fast — yes; Meggers — yes; Goss — yes.

What the incentives do (and limits) - IRBs: allow bonding for construction, relieve projects of sales tax on materials during construction, and permit the developers to apply for a property‑tax exemption under the city’s lease‑back structure. - PILOT: in lieu of property tax, the projects would pay $250 per unit per year to taxing entities; staff estimated that the PILOT would offset the city’s reductions within a few years. - Fee reductions: Zimmerman’s project numbers in staff materials list an estimated $43,857 building‑permit fee and $8,130 in water tap charges for an $8.7 million development; the $40,000 reduction would lower the developer’s net obligation to roughly $11,782. Plaza Trails’ materials list an estimated $38,523 building‑permit fee and $9,530 tap charges for a $7.7 million project; the $40,000 reduction would lower the net obligation to about $8,053.

Context and follow-up Staff and developers said the fee waivers and IRB measures are intended to make Hutchinson more competitive in a point‑based LIHTC application process at the state level. Angela Richard noted that the state reduced the 4% LIHTC and is keeping the 9% LIHTC, which will sunset in 2028 — information staff used to frame how local incentives strengthen an application. Council members asked about pedestrian connections, drainage, and the effect of the PILOT on the developers’ point totals; developers and staff said the PILOT does not reduce points available under the LIHTC scoring but that a higher local financial commitment can improve competitiveness.

What’s next Developers will continue design and funding work. If IRBs are issued, the city would become the leaseholder and lease the property back to the developers as part of the mechanics for sales‑tax relief. Planning, final plats and permits remain required; council and staff said streets, sidewalks, drainage and other infrastructure will be reviewed during the planning and permitting stages.

Ending note Council framed the approvals as steps to secure housing that staff said would stabilize rental markets and expand housing variety. The council’s approvals were limited to the specific measures recorded in the meeting; no state tax credits have been awarded yet and staff cautioned that developers must still secure LIHTC allocations and complete other approvals before construction begins.