Commissioners want more from developers applying for benefit districts

By Bryan Richardson

City commissioners came to a consensus on Tuesday about the need for two forms that developers would submit when applying for a benefit district.

Since the topic was a discussion item on a work session agenda, deputy city manager Jason Hilgers said it will come back to the commission in June for final action.

The city has used benefit districts to finance the installation of public infrastructure since the early 1960s.

The district is the geographical area such as a neighborhood or shopping center where improvements (streets, water, sewer and stormwater) will take place.

Public works director Rob Ott said the commission would receive the forms whenever an annexation and zoning vote is being considered.

“If you’re not going to approve their benefit district, that’s probably when they should know, so we don’t get so far down the line that it’s too late,” he said.

The first form is “Certification Regarding Payment of All Outstanding Special Assessment and General Property Taxes to the City of Manhattan.” With this form, developers provide proof they are in “good standing” on paying taxes owed to the city.

However, a developer that owed money wouldn’t automatically be rejected.

Commissioner John Matta said the city didn’t add that provision because of complications.

“We got into all sorts of issues regarding that and decided not to put in a set policy,” he said.

The second form is the “Tax Disclosure Statement,” in which developers list any limited-liability companies, corporations or other entities in which they have an interest greater than or equal to 20 percent.

This could help the city find out whether a developer has hidden any delinquencies through the creation of different companies or entities.

Ott said Wichita has a similar policy.

He said he met with developers last week and came away with a positive impression.

“I don’t think any of them will stop developing and stop using benefit districts,” Ott said.

Hilgers said the forms also wouldn’t prevent a future delinquency from happening.

“All that you’re doing is alerting the governing body in the event the developer is delinquent on previous projects,” he said. “It adds to the list of facts you have to consider as you entertain a benefit district.”

Russ Weisbender, owner of Weisbender Homes and Development, said he owns multiple companies in development and real estate, and a lot of them are not related.

“I would rather see that you would take a look at things that would directly impact a developer’s ability to pay those things,” he said.

Weisbender said he thought the city could be crossing privacy lines.

“You’re practically asking for me when I make an application for a development to provide you with my financial statement,” he said.

Ott said the forms wouldn’t ask for any information that isn’t already open to the public.

Commissioner Karen McCulloh said there’s always a tension between the developers and the city when it comes to these types of policies.

“There’s always been a feeling that there’s too many hoops to jump through or it takes too long,” she said, “but it’s incumbent upon us to have that fiduciary responsibility and to be cautious.”

Mayor Wynn Butler said developers can explain any gray areas that they feel might affect their applications.

“The way this policy is configured, it’s not cut and dried,” he said.

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