Manhattan City Commissioners Tuesday approved a March 1 date for a public hearing on the expansion of the downtown STAR bond district to include the new location of a proposed museum.
Developers Robert and Tracey DeBruyn are eyeing a lot to the north of Pierre and west of 3rd Street for their envisioned 50,000 square foot Museum of Art and Light, shifting locations as a result of public opposition to previous plans to construct the facility southeast of the Flint Hills Discovery Center (FHDC).
“We adopted [a redevelopment plan]as a governing body and a community and started to receive some concern,” says Deputy City Manager Jason Hilgers. “About occupying that parking, about it impacting neighboring businesses, neighboring owners.”
The DeBruyn’s, also owners of The Master Teacher in Manhattan, hope to utilize funds from the sales tax and revenue (STAR) bond district in downtown Manhattan that currently has a north boundary of Pierre Street. STAR bonds are a mechanism through which cities can divert sales tax revenue the district generates for a period of time into specific redevelopment projects, used in the funding of the FHDC and downtown redevelopment process.
Commissioners will consider at the March 1 hearing whether to expand the STAR bond district north to include the block on which the museum is proposed. If approved, the developers are slated to receive a projected $23 million to be generated by the district to assist in funding the project. The DeBruyn’s will also generate an additional $21 million in private funding for the estimated $43.6 million museum, and no city financial support for operations is planned.
“I think it’ll be a major and attraction item for Manhattan and just what we need,” says Mayor Linda Morse. “If we’ve been in a stagnant economy here and not had a lot of new economic development, this seems like a generator, a start-up thing will benefit all of us.”
The district expansion proposal has received a letter of support from Kansas Lt. Gov. and Commerce Sec. David Toland.
“It’s also a good vote of confidence,” says Commissioner Usha Reddi. “That also speaks volumes as far as their interest and commitment in this district and for this project.”
Hilgers says the developers have a designer on contract and current plans involve the demolition of two buildings currently at the site. The project will also incorporate the old Sears Building at 4th and Houston and is contingent on an agreement between the developers and the Manhattan Town Center.
In addition to some existing buildings, the location in question contains a city-owned parking lot currently under lease to the mall for another 62 years.
“They’ve been approached by the DeBruyn’s as to whether or not they’d be willing to sell their portion of the lease and then obviously come back to the city and look for that donation of land,” says Hilgers.
Hilgers says several agreements are still yet to be finalized, many of which will return for commission approval, though he indicates the two parties have apparently reached an agreeable price for the exchange.
Commissioners inquired into the impact of the development on tax revenue, as the museum would be under non-profit ownership. Hilgers indicated the only building potentially generating sales tax impacted by the project is the Sears Building, though could not say whether any sales tax is generated there.
“But anybody generating sales tax here, will then now become part of the STAR bond district,” says Hilgers. “And the State will capture that, peel it off, and send it to the trustees.”
Commissioners also questioned the project’s potential impact to property tax receipts, which would be a shared impact among the multiple taxing entities in the area.
“I don’t think it’s that much, but I just wanted to get an answer,” says Commissioner John Matta. City staff indicated they’d have a tally of net costs and benefits of lost revenue compared with anticipated revenue to be generated if the museum was constructed at the March 1 hearing.
Commissioner Wynn Butler says the plan seemed like a decent return on investment when the commission considered the proposal at the prior location, saying he’s optimistic for the project.
“If we’re going to lose $40,000 in property tax, but we’ve got the potential to gain $200,000 in other revenue then this is still a good bet,” Butler says.
If the district expansion is approved on March 1, the commission will also have to again reconsider a redevelopment plan for the district to accommodate for the new museum. Hilgers anticipates the process will take until the summer of 2022 at the earliest before the land can be transferred to the developers, with construction possibly taking in the realm of two years.