Archive for Thursday, October 7, 2004

Developers, civic leaders ponder the mechanics of benefit districts

October 7, 2004

Judging by responses at a recent growth meeting, benefit districts would be a feasible means of expanding Eudora's infrastructure. Before benefit districts become a reality, developers and city leaders have to hash out exactly how they'll go about it.
"If developers wait for the first person to take a risk, it's unlikely to happen," said City Administrator Mike Yanez during a meeting of civic leaders and planners Sept. 23.
Who fronts the cost is a big question, said Randell Graves, the city's planning consultant. He said he'd seen benefit districts in which developers put in infrastructure at their own cost and other developments tying in would pay the initiator back.
"Somebody has to keep track of that," Graves said.
Lance Johnson of The Peridian Group of Lawrence said developers were skittish about initiating benefit districts because they didn't want to be stuck with the whole cost of an infrastructure project if the assumed new developments didn't come. He said the city needed a mechanism to foster benefit districts.
"You'll never get 100 percent participation initially," Johnson said. "They want a fair, level playing field."
Moreover, developers said they would feel an undue pressure to have new neighbors established quickly if they were dependent on them for future revenue.
Planning Commission Chairman Kurt von Achen said cities could also be hesitant to put up the up-front costs because if development stagnates or tanks, the city ends up paying for it.
Johnson suggested city-at-large participation in infrastructure benefit districts, but Yanez said having current residents pay for infrastructure needs stemming from new growth was a politically delicate issue.
Marty Kobza, superintendent of Eudora USD 491 schools said when the school district needed a sewer line for the building that now houses the middle school, the school district financed a benefit district through the city. As the Meadowlark neighborhood grew across the street, the district took payments from homes hooking onto its sewer line and used them to pay the city.
The problem with such an arrangement, said Board of Education member
Greg Neis, was that the district didn't account for growth in the Shadow Ridge neighborhood, and the school lost out on recouping costs from that development to the south.
Whatever mechanism in place for developers and the city to initiate benefit districts, city engineer Brian Kingsley said some sort of organization would be necessary to see that benefit districts were put in efficiently. He said information was needed to see where Eudora would grow, and developers would need to formulate how to connect.
Those at the recent growth meeting discussed how benefit districts could connect across undeveloped land, a consequence of "leapfrog" annexation.
"And then a plan may begin to shape out," Kingsley said.
City Council member Scott Hopson asked if developers could bring a proposal to the city to get the ball rolling instead of having city staff working on assumptions of what developers would want and where they're going. Tim Herndon of Landplan Engineering of Lawrence was pessimistic.
"It's easy to talk about, but it's difficult to do," he said.
Although developers may share many of the same interests at the City Council and Planning Commission tables, Herndon said developers were also one another's competitors.
"To get those people to agree -- to make sacrifices for the greater good -- is difficult," he said.
Although benefit districts are seen as a way to take the burden of growth off current residents' pockets, they don't necessarily equate to a moratorium on rate increases. Yanez said for the city to get loans it had to show lenders it had the means to make the payments, which could mean rate increases.

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