Commission approves incentives, grants for 40-unit Manhattan Infill Housing project

The Manhattan City Commission voted unanimously Oct. 7 to advance the Manhattan Infill Housing project, approving a package of grants, agreements and a property-tax abatement to support 40 new homes across two infill sites.

Staff presented the proposal as a combined project for LK Townhomes and Lee Mill Village that would create 40 three-bedroom, two-bath homes: 22 owner-occupied units and 18 rental units. The city will authorize a $1,450,000 workforce housing sales-tax grant to be paid to the developer and will execute a cooperative agreement tied to a Kansas Housing Resources Corporation (KHRC) moderate income housing (MIH) grant.

Why it matters: City staff and the developer said the project prioritizes infill development in walkable areas, brings currently vacant lots into productive use and is financed with targeted housing funds and tax incentives rather than the city’s general fund.

Details staff and the developer provided include that the for-sale units will carry an income restriction enforced for five years by KHRC; rental units will be monitored for five years under KHRC and for 10 years because of the IRB property-tax abatement. Staff said rental household incomes for the first five years must fall between 60% and 150% of area median income or meet the city’s defined workforce rental range. Staff also proposed reserving $300,000 of the workforce housing sales-tax funds as a contingency in case the developer failed to perform under the MIH grant.

Developer Tyler Holloman, representing Frontier Development Group, reviewed the project history and financing. He told commissioners a “yes vote tonight means that we have a project that’s advancing, that’s gonna deliver 40 affordable homes for our community,” and noted the developer’s experience with similar KHRC-funded projects and letters of support from area employers.

Public comment included both support and opposition. Resident Larry Fox challenged the developer’s cost estimates and asked why the 10-year tax abatement was necessary, saying the package of subsidies equated to roughly $90,000 per unit and arguing it amounted to about $1 million in foregone taxes over 10 years. Gary Olds asked presenters to focus on city-only revenue impacts in future presentations. Several speakers and commissioners noted local housing market activity and the rapid occupancy of nearby projects.

Votes at a glance: The commission took three formal actions on the project and voted 5–0 on each. - Resolution 100725C: Determining the advisability of issuing multifamily housing revenue bonds for the LK Townhome site and authorizing an economic development agreement providing the property-tax abatement for the LK Townhome site — approved 5–0 (roll call recorded five yes votes). - KHRC MIH grant & cooperative agreement: Authorized the mayor and city administration to execute a KHRC moderate income housing grant agreement for LK Townhomes and Lee Mill Village and to execute a cooperative agreement with Frontier entities — approved 5–0. - Workforce tax grant & land transfer amendment: Authorized execution of a workforce tax grant agreement with Frontier entities for both sites and amended the land transfer and development agreement for Lee Mill Village — approved 5–0.

Legal and contract notes: City counsel confirmed the IRB economic development agreement and restrictive covenant provide the city the ability to eliminate the property-tax abatement and pursue recovery of funds if the city must repay grant money to the state. The restrictive covenant will explicitly prohibit short-term rentals for the duration of the IRB period (10 years) and will be recorded against each lot.

What remains: The developer, Frontier Development Group, will proceed with implementation under the grant, IRB and cooperative-agreement terms. Staff said KHRC monitoring schedules and performance metrics in the economic development agreement will track required investment levels and leasing thresholds. The city also will hold a $300,000 contingency reserve from the workforce housing sales-tax funds to cover potential developer nonperformance.

Speakers quoted in this report come from the meeting record. Tyler Holloman is identified as the developer representing Frontier Development Group; Stephanie Peterson is identified as director of community development; Katie (city counsel) provided legal clarifications. Resident Larry Fox spoke in opposition to the 10-year property-tax abatement.

The city’s packet and presentation to commissioners include additional financial tables and performance metrics that detail the projected property-tax revenues, abatement values and the proposed reimbursement schedule for the workforce housing sales-tax grant.