Commission approves first reading for LK Townhomes RHID to support workforce housing

The Manhattan City Commission on May 20 approved on first reading an ordinance establishing a Reinvestment Housing Incentive District, a development plan and a development agreement for the LK Townhomes project on Little Kitten Avenue.

Stephanie Peterson, the city’s director of community development, told the commission the project envisions 26 duplex units on 26 undeveloped lots, a total construction cost just under $9 million and a pay-as-you-go RHID request capped at $1,950,000 over a maximum term that the agreement ties to construction milestones and statutory limits.

“The RHID request is for a maximum of 15 years, or $1,950,000,” Peterson said, describing the developer’s requirement that at least 50% of the units be built before any RHID payout and the developer’s 12-month start/48-month completion windows written into the agreement.

Tyler Holloman, a principal with Frontier Development Group and a lead developer on the Manhattan Infill Housing Project, described the broader program and the LK site’s role in it. “This is an initiative that's going to bring 44 new homes to the Manhattan, and Riley County community. 40 of those are workforce housing,” Holloman said, noting local contractors and materials would be used and that the developer expects to retire any RHID advances in no more than 15 years if feasible.

Gavin (last name not provided), also identified as a principal with the project, noted the development secured state support. “KHRC has approved state funding both in the form of a moderate-income housing grant, as well as Kansas housing investor tax credits. We received the maximum on both of those applications,” he said; the developers reported $1,850,000 in state funding through those awards.

Supporters and critics spoke during the public hearing. Jason Smith, president and CEO of the Manhattan Area Chamber of Commerce, urged commission approval, saying, “This project addresses that need,” and argued infill workforce housing would use existing city infrastructure and generate additional sales and property tax revenue over time.

Neighbor concerns were raised. Claudia Luthai, a Stephen Court resident adjacent to Little Kitten Avenue, said she supports affordable housing but asked the commission to ensure the city can maintain the neighborhood infrastructure during and after construction and questioned whether the stated price points would match local demand.

Amber Starling, a Northview resident who spoke in favor of the project, sought to correct misconceptions about the term “workforce housing.” “Workforce housing is not the same as low income housing or public housing,” she said, citing a city resolution definition and listing the income and price ranges used in local workforce housing policy.

City staff presented fiscal estimates prepared by a third-party analyst the developer engaged. Peterson summarized prior tax receipts from the parcels — about $7,000 currently from the undeveloped lots — and a back-of-envelope comparison showing the property had generated roughly $250,000 in property tax over the last 37 years; using the same flat assumptions, the city projection showed roughly $5.5 million in gross property tax revenue over the next 37 years with the development in place and a net gain for taxing entities after RHID payments.

Staff and developers also highlighted projected construction-related sales tax and job impacts. The third-party analysis estimated between $1,050,000 in new retail sales tax receipts over 25 years and roughly 12–16 construction jobs tied to the build, and it applied a “pull factor” in estimating how many new households would be net additions to the community versus relocations within the area.

Commission questions focused on RHID timing and term language; Peterson explained the agreement defines multiple triggering events for the term (15 years after 50% of units are completed, 17.5 years from a set date, or earlier if the RHID cap is exhausted) so that payouts stop once the agreed maximum is reached.

After discussion and public comment, the commission voted 5–0 to approve first reading of the RHID ordinance, adopt the development plan and authorize city administration to execute the development agreement with Frontier Development Group. The approval advances the project to second reading and begins the statutory notice period that allows other taxing entities to review and potentially object under state statute.

The development must satisfy the pay-as-you-go condition that no cash be paid until at least 50% of the units are built; construction must begin within 12 months and the project must be completed within 48 months per the agreement or the developer foregoes reimbursement for work after that deadline.

The commission directed staff to continue coordinating with Frontier Development Group and encouraged the developer to meet with the adjacent homeowners association; several commissioners noted they want continued outreach to neighbors as the project proceeds.