By BECKY KISER
Hays Post
Despite a late request for an addition to the development agreement, Hays city commissioners Tuesday night approved a Community Improvement District (CID) for a new retail development to be built directly north of Home Depot.
A one percent CID sales tax will be imposed for 22 years for construction of a 73,000 square foot shopping center, anchored by a national retailer.
If certificates of occupancy for the 73,000 square feet of retail space are not issued within 36 months of Tuesday’s approval of the CID, it will be dissolved. “The clock is now ticking on the occupancy requirements,” noted Finance Director Kim Rupp.
Commissioners said they understand why the developer’s bank wants reassurance the city will “reasonably consider amendments to the agreement requested by the developer as a result of economic and/or market conditions.”
Both Mayor Shaun Musil and Vice-Mayor James Meier said they had contacted two local bankers who both said “they would have asked for the same thing.”
“It basically gives the bankers some comfort,” said Ferdinand Niemann, an attorney for Hays Investors, LLC. “Let’s say we’re two weeks behind and we have delivered 72,000 square feet. I think it’s pretty likely the city would say ‘You’re close enough–72,000 out of the 73,000 square feet requirement, or, you need two more weeks.’
“The Section 20 does not bind the city to anything,” he stressed.
Commissioner Lance Jones didn’t like the request for a new clause in the agreement coming at the last minute, but also said “I don’t think there’s anything ‘fishy’ there.”
“It’s nothing to keep us from passing this project” Jones added. “If they build it, the city’s going to come out financially good and make money. If they don’t build it, we’re not really out anything.”
Vice-Mayor Meier stressed the importance of sales tax receipts to the city of Hays.
“We’re the only city in the state of Kansas that 100% funds its General Fund with sales tax revenue,” Meier pointed out.
During Tuesday’s presentation of the October financial statement, Rupp reported an increase in quarter to date (QTD) sales tax collections of 1.43%, the the first increase on the QTD report in seven months.
“If we don’t get our sales tax revenues increasing once again on a consistent basis, at some point we are going to have to see some type of property tax in the mix to fund the General Fund,” Meier warned.
The city’s mill levy has remained at 25 mills the past ten years, according to City Manager Toby Dougherty.
“We’ve been able to do that because of the sales tax,” Meier explained. “This is good for the taxpayer….we’ve been able to have city services paid for by those outside of the community, who rightfully so, should be paying for some of those because they drive on our streets and they play in our parks.”
“Keep an eye on Hays,” Musil said with a smile. “We’re going to have lot (of popular shopping opportunities) real soon.”
Commissioner Henry Schwaller was absent from the meeting.