Council hears lengthy debate on Lawrence Bay RHID, special assessments and plan to return lots to tax rolls

City staff presented an RHID application for LB Lots LLC (Lawrence Bay) and asked the governing body to authorize staff to proceed with the application to the Kansas Department of Commerce. The item was a discussion on March 11; final council action was scheduled for the council’s March 18 meeting.

Director Rhiannon Friedman (participating remotely) summarized the application as a proposal to create an RHID covering 15 initial Lawrence Bay lots at the subdivision entrance off SW 47th and Wanamaker. The applicant proposes to build and sell 15 single-family homes over four years once approvals and a development agreement are in place.

Public comment raised questions about wider policy priorities and affordability. Resident Danielle Twemlow told the council that the city’s housing-study findings show a greater need for lower-income (very low AMI) units than the types of market-rate homes targeted by the RHID. “The actual higher need of our community is the AMI at the 20% mark…not the AMI of 50%, which is what we continue over and over again to be giving these specials and these RHIDs for,” Twemlow said.

Council members and staff discussed the deal mechanics and amounts. Staff summarized the negotiated figures for the 16 parcels under discussion (the applicant’s 15 lots plus a narrow parcel the city also reviewed): - Past-due real-estate taxes on the parcels: $86,000 (staff said this amount has been paid). - Past-due special assessments: $423,000. - A negotiated escrowed payment of $525,000 (calculated using $2.25 per square foot) to be placed in escrow by the developer; that amount exceeds the past-due specials total. - Future special assessments on the same parcels: about $432,000; staff described options to convert those into a CID amortization and reduce the per-lot special down to a level the market could support.

Staff described an amortization analysis showing the CID treatment would reduce future specials from a relatively high current level to roughly $227 per lot (amortized) and then, after applying $102,000 from escrow toward principal reduction, to about $185 per lot — a figure staff said is closer to comparable properties. The city also will include three lots it purchased at auction in the CID to spread specials across additional parcels.

Council members asked whether the current owner, identified in public discussion as a long-time developer who holds many of the Lawrence Bay parcels, had agreed to the revised development agreement; staff said the developer’s attorney was present and the amended development agreement had been circulated. The governing body also discussed timing and conditions: staff said the developer would escrow the negotiated funds after final approvals and the development agreement would condition construction tranches (roughly four homes per year) on completion of required approvals.

Several councilors and the public voiced concern about precedent and fairness, especially because the parcels previously entered tax-foreclosure processes and because the developer has other outstanding obligations on other parcels. Deputy Mayor Banks and others argued the city’s approach was intended to recover specials that otherwise would be lost at tax auction and to put parcels back on the tax rolls. “If we didn't work with them, and they went to auction, those specials would disappear,” Banks said. Staff and the city attorney noted that the governing body must be able to articulate a rational basis for granting such agreements in order to defend against possible legal challenges.

No council action was taken at the March 11 discussion. Staff said the RHID application would be on the March 18 agenda for possible formal action and that the public hearing for a CID would be scheduled in the coming weeks.