Douglas County OKs 15-year, 95% property-tax rebate for rehabilitation of 612 New Hampshire Street

The Douglas County Board of Commissioners on Nov. 5 approved county participation in a 15-year Neighborhood Revitalization Area (NRA) that will rebate 95% of the incremental property tax increase tied to the planned historic rehabilitation of the Reuter/Organ buildings at 612 New Hampshire Street in Lawrence.

The motion, made by Commissioner Reed and approved on a 5–0 vote, authorized the county administrator to execute a cooperative agreement among the city of Lawrence, Douglas County and USD 497 to administer the NRA for the property.

The project team said the two connected downtown buildings have been vacant since about 2001 and require extensive structural repairs and historic‑preservation work. Attorney Patrick Watkins, representing 612 New Hampshire LLC, said the project relies on federal and state historic tax credits and other incentives to be financially feasible and described the developer’s prior investments to stabilize the structures.

Tom Calico of Baker Tilly Municipal Advisors, the city’s financial adviser on the request, presented a but‑for analysis and fiscal‑impact assessment for the commission. Baker Tilly’s review estimated the incentive gross value at about $1,400,000 and noted two related tools: a community improvement district (CID) that could add an incremental sales tax (estimated at roughly $1.25 million under current assumptions, with a maximum authorizing amount of $3 million) and a sales‑tax exemption for construction materials estimated at about $360,000. Baker Tilly concluded that, without the requested NRA participation, the project would not meet market returns and therefore “passes the but‑for test.” The firm reported the project’s after‑incentive internal rate of return at roughly 1.3%, below typical private investor return ranges cited for similar projects.

Developer Matthew Gilhausen said he and partners have completed emergency structural stabilization and that rehabilitation requires new beams and posts, masonry work, tuckpointing and new building systems. The team described the site’s historic significance — including use by the Wilder Brothers shirt factory and the Reuter organ company — and said the project aligns with downtown preservation goals.

Commissioners acknowledged the developer’s pre‑existing investment to stabilize the building and debated the steepness of a 95% rebate. Commissioner Anderson described the owner’s early stabilization work as “unusual” and said the investment made the rehabilitation possible rather than resulting in a ruin. The commission noted that the NRA is structured to rebate only incremental tax gains and that county tax dollars do not directly leave the county: the rebate reduces future incremental revenue for the participating taxing entities during the rebate period.

The cooperative agreement executed by the county will reference the NRA plan and set administration duties with the city and USD 497. The commission’s action followed public‑sector due diligence and a presentation of estimated capital costs and projected fiscal benefits to the county.