Additional duplexes may be added near senior housing

Construction of senior housing duplexes at the Prairie View complex is progressing nicely, and there may be the possibility for construction of one or two more duplexes in that area once the complex is complete, Homestead Affordable Housing president and CEO Tom Bishop told the Holton City Commission on Monday.

The proposition of possible construction of additional duplexes along First Street near Pennsylvania Avenue, Bishop told commissioners, stemmed from a USDA Rural Development “financial debacle” that derailed a Homestead program to build single-family housing along First. Rural Development has also mandated changes in its mortgage program that made it more feasible for interested families to get financing from local banks rather than from RD, he said.

Bishop also presented commissioners with a $25,000 check to be used for economic development, as promised when the city agreed to issue revenue bonds on Homestead’s behalf to cover the cost of building the 32-unit senior housing complex at the south edge of the city. Commissioners were also invited to tour one of the duplex units in the complex on Saturday, along with prospective tenants of the complex.

“We have some very, very happy folks,” Bishop said of some of those prospective tenants. “I think they appreciate all that we’re able to do.”

The majority of Prairie View lease applications have been submitted by Holton and Jackson County residents, he said, noting that “there was a person or two from Topeka who wanted to come back here” after living in senior housing there. Successful lease applications number “somewhere in the mid-20s” at this point, he added, noting that all units would likely be leased by the time construction is complete in March of next year.

Bishop also told commissioners it is possible that another duplex or two could be built along First in order to accommodate “families who make too much to live in the duplexes,” which are subject to income guidelines on their leases. If that is the case, he said, they would be built in an area where “we were supposed to find families that were designed to fit” a Rural Development mortgage program for first-time homebuyers who also fit certain income qualifications.

Rural Development had also made adjustments to its mortgage program that would have made it tougher on potential applicants to get a loan through them, Bishop said. Therefore, potential homebuyers along First Street “went to banks, bought money locally and bought houses… That’s not the way the program was supposed to work.”

On top of that, he said, it was discovered that RD’s St. Louis, Mo. office had not kept tabs on its “mortgage portfolio,” which had “a fairly high delinquency rate” that prompted RD to bolster requirements for its mortgages.

“In the history of that program, it was much different,” Bishop said. “It was supposed to be, if you couldn’t go to a bank and get financed, that’s what this program was for. And now it’s got standards that are way above the local banks.”

Instead, he told commissioners, he has been working on “something that gets people aware” that the lots on First Street are available for purchase “on the conventional market” so that interested families can work with Homestead on building homes on those lots. He added the possibility of more senior housing duplexes along First, adding that he has asked Homestead’s general contractor for “some pricing to do one or two more duplexes” in that area.

“It won’t be the same type of project as Prairie View, but some of these applicants make too much money to live in what we’re doing there,” he said. “But they could easily afford a mortgage on one of those duplex units if we’d just build a few more of those, and when they buy them, we’d take care of them the same way we take care of the others (at Prairie View) — we’d mow and shovel snow and do all the rest of that stuff.”

Bishop gave commissioners the $25,000 check, promised in September 2014 as an up-front payment to be used for economic development in exchange for the city’s approval of a resolution of intent to issue $5.6 million in taxable multi-family housing revenue bonds for Prairie View’s construction. The check had also been promised at that time as a “payment in lieu of taxes,” as the complex would be subject to a 10-year property tax abatement.

Bishop also told commissioners that Homestead had successfully applied for a grant to host an AmeriCorps NCCC (National Civilian Community Corps) team in Holton for approximately two months, starting at the end of October. While here, the team will engage in “service projects” for the community, such as building wheelchair ramps and helping senior citizens move into Prairie View housing, he said.

The NCCC team consists mainly of “college folks” between the age of 18 and 26 who will work about “45 hours a week” on those projects, Bishop said. He also told commissioners that he would like to schedule a meeting between NCCC team members and commissioners after their arrival in Holton.

In other business on Monday, commissioners approved a resolution authorizing the offering of $1,895,000 in general obligation refunding bonds for sale. The bond issue, it was reported, would refinance what’s left of a 2004 bond issue in order to save the city nearly $85,000 in interest costs.

“I think it’s a great thing for us to save the kind of money we’re looking to save,” Commissioner Dan Brenner said, with Holton City Manager Bret Bauer adding that the initial estimate on how much the city would save was closer to $75,000. 

The 2004 bond issue was done to refinance the 1999 series bonds in order to get a lower interest rate, it was reported. The 1999 bonds were issued to cover the cost of improvements at the city’s electric power plant, including the purchase of two generators that would provide a total output of 6.3 megawatts of power.

It was not stated during Monday’s meeting exactly how much of an interest rate the new bond issue would have, although commissioners were told in September that the 2004 bonds were carrying an interest rate between 3.5 and 4 percent. The new bond issue would carry an anticipated interest rate between 2.5 and 3 percent, it was reported then.

Commissioners also:

* Noted the absence of Commissioner Erich Campbell.

* Met with Holton resident Lyle Dexter to discuss a problem with rats in the area of Ninth Street and Kansas Avenue. Bauer later suggested Dexter contact the Jackson County Health Department, and Mayor Robert Dieckmann said he and Assistant City Manager Kerwin McKee would take a look at the area to see if anything could be done at the city level.

* Approved minutes from the commission’s Sept. 21 meeting, along with a list of budget appropriations made since that meeting.

* Met with rural Holton resident Lee Doyle to discuss an issue with a city sewer line that abuts his property, as well as whether the line had been abandoned. Commissioners said they would look into the matter and give Doyle a report on their findings at their Oct. 19 meeting.

* Heard comments from Bauer about the upcoming League of Kansas Municipalities annual conference in Topeka.

* Heard a comment from Brenner about kids riding their bicycles on the recently resurfaced tennis courts at Linscott Park.

* Heard a question from Commissioner Twila White about whether the cause of power outages on Sept. 25 and 26 near U.S. Highway 75 and Kansas Highway 16 had been pinpointed. McKee said city electrical crews are still working on the matter.

* Heard a question from Commissioner Tim Morris about “any changes in city employment.” Bauer replied that two employment vacancies at the city power plant had been filled, adding that he had interviewed a candidate for a police officer position earlier that day.

* Adjourned the meeting at 7:45 p.m.