GALENA, Kan. —
By approving a resolution this week in a special meeting, the Galena City Council took the first step toward establishing two small Rural Housing Incentive Districts that would provide a tax incentive to housing developers.
In Kansas, the program is designed to aid developers in building houses by assisting in the financing of public improvements. The incentive district captures 100 percent of any increase in real property taxes created by a project for up to 15 years.
In Galena, one district would be established between Main and Short streets, and Third and Second streets. Another would be on four acres near the southwest corner of Stateline Road and Seventh Street, according to City Attorney Kevin Cure. The housing would be apartments.
The resolution, which includes maps of the districts, will be sent to the Kansas Department of Commerce for evaluation.
“If the department finds that the study was sufficient, they’ll issue a letter that we may proceed,” Cure said. “If not, we have to go back to the drawing board.”
Approval is not binding, meaning the city’s resolution does not obligate it to pursue the project, no matter the ruling of the state department.
If the state approves the districts and the city chooses to proceed, a public hearing would be slated. If the City Council adopted an ordinance establishing the districts, the Cherokee County Commission and the Galena School District would have the opportunity to protest within 30 days via resolutions asserting that the proposed districts would have an adverse effect because of decreased tax revenue.
“So it’s a pretty fair process that everyone can get involved in if they want to,” Cure said.
Mike Dektas, director of development and acquisitions for the Miller-Valentine Group, said that if the districts are created, his group would build an apartment complex at the Stateline Road property similar in style to the Hampshire Terrace apartment complex it is building in Joplin, Mo.
“Assuming everything goes smoothly, we likely would begin construction in the fall and complete it maybe in late summer or fall of 2014,” he said.
The two-story complex would include 20 two-bedroom apartments and 20 three-bedroom apartments, with rent ranging from $541 and less to $577 and less.
Plans for the district downtown have yet to be completed.
IN ORDER TO QUALIFY for the tax incentive, the new construction must be within a redevelopment district, which must be defined by either a city or a county, must be based on a housing needs analysis, and must be in an area with fewer than 40,000 residents.