Local small business owners approached Garden City commissioners on Tuesday with concerns about the proposed establishment of a redevelopment district for a planned commercial project on East Kansas Avenue.
The commission approved a memorandum of understanding with developer 2107 E. Kansas LLC in January to turn 11 acres of undeveloped land near the intersection of Campus Drive and Kansas Avenue into a commercial development anchored by a new First National Bank. About five to six other commercial or retail buildings are included in the project.
Tuesday, the commission held a public hearing before unanimously passing an ordinance that would establish the area as the Campus and Kansas Redevelopment District, marking the area as “blighted” and making it eligible to become a Tax Increment Financing District.
A TIF district diverts a portion of the businesses' property taxes to help finance the development of the land the businesses sit on, in this case, the construction of infrastructure components like utilities, drainage, landscaping, roads and parking lots. Right now, the area is a stretch of unused, undeveloped grass, save several vacant, dilapidated buildings.
During the public hearing, Henk Rijfkogel, owner of Henk’s Carpet and Upholstery Cleaning at 3025 Commercial Ave., and local resident Gale Louk, asked questions about and showed distaste for the process.
The crux of their concerns was ultimately adjacent to the issue at hand. They and their neighboring small town business owners, several of whom watched from the audience, have seen large increases in property taxes over recent years and, as Rijfkogel told commissioners, were looking for relief.
With that in mind, the city allowing larger businesses to use their property taxes to lower costs of development is frustrating, Rijfkogel said. He asked commissioners whether districts and agreements like these were the cause of his high property taxes — implying that smaller businesses are having to make up for these kinds of districts with their increased property taxes.
A TIF District for one business does not affect property taxes of other businesses, Lona DuVall, president and CEO of the Finney County Economic Development Corp. said in a separate interview. The culprit instead, commissioners told Rijfkogel, is upped county building valuations.
The TIF District, DuVall said at the meeting, covers costs that would otherwise likely be put forward by the city, and is not only an incentive to developers but also a safeguard for the city. Instead of developing a property and then recruiting businesses to fill it, the city can work with interested properties to quickly get a return on the investment, she said.
“... the extension of water services, wastewater services, streets, curbs, gutters, sidewalks — those are costs that we’re partnering with the private sector in order to make those projects happen,” DuVall said. “If you want to act philosophical, we can, but the communities who are doing the best job of supporting private industry by partnering with them to meet the goals of both entities are those communities that continue to grow. You have two choices as a community: You grow or you die.”
Anyone can apply for TIF or Community Improvement Districts, commissioners said, though they are generally used for larger developments.
“To put it real simply, anybody in this room — you bring us a $20 million project and we’ll give you the same thing,” said Mayor Dan Fankhauser, referring to TIF districts. “That’s the difference.”
The sentiment felt like a dismissal of small, local businesses, Rijfkogel said after the hearing.
Kristin Czubkowski of Polsinelli, the law firm representing 2107 E. Kansas LLC, presented a timeline for the project to the commission. If the commission approves a TIF project plan and CID petition in May after a public hearing in April, the developer can begin demolishing structures on the property, installing infrastructure elements and constructing commercial buildings.
In other business:
• In a 3-1 vote, the commission approved amendments to the development agreement for the Northborough affordable housing division that allow the developer to begin construction before installing infrastructure, as required by city code.
Neighborhood and Development Services Director Kaleb Kentner advised commissioners that with the amendments, the developer could run into major infrastructure problems down the line that could significantly increase project costs to the city and developer.
Without the amendments, DuVall said, the nonprofit developer, operating on limited federal funds and a tight schedule, would not be able to complete the project.
Commissioner Roy Cessna, the lone dissenting vote, said he voted nay because the amendments are not in line with city code.
• The commission authorized the issuance of STAR Bonds to First Internet Public Finance Corp. of Fishers, Ind., and Sterling National Bank of New York City to finance costs relating to the Sports of the World project.
• The commission approved an amendment to city code that beginning April 1 will allow retailers to sell beer with up to 6 percent alcohol, up from the previous cap of 3.2 percent. The amendment will align the city with state regulations.
• The commission approved a purchase agreement for a 12.6-acre lot of land by the City Utility Service Center for $525,000. The city intends to move the Public Works Department to a facility on the land in the future.
• The commission took into advisement a request from the Public Utilities Advisory Board to ban “T-shirt” plastic bags in the city.
Contact Amber Friend at email@example.com.
Correction: A previous version of this story incorrectly identified one of the residents who raised concerns about the TIF proposal as a current employee of Western Irrigation. Gale Louk is the former owner of Western Irrigation, but is no longer an employee of the company. The story also incorrectly reported that Louk didn't give his full name when he addressed the commission.