By: The Pottawatomie County Economic Development Corporation (PCEDC) | 9.12.24
This case study focuses on the development of a 10-unit multiplex and adjacent ADA-compliant duplex housing project in Wamego, Kansas. The project utilized a historic building (Genn Hospital, built in 1921 and closed in 1969 when a new, larger building was constructed) and involved a range of partners, including private developers, local and regional banks, state housing agencies, and community organizations. The project took advantage of Kansas housing grants and incentives such as the Kansas Housing Investor Tax Credit (KHITC) and other resources provided by the Kansas Department of Commerce, Kansas Housing Resources Corporation, and the State Historic Preservation office. The project aimed to address affordable housing needs in the area while fostering economic development.
Location:
Wamego, Kansas, population 4,880 in Pottawatomie County, Kansas, located 12 miles east of Manhattan, Kansas.
Project Goal:
To develop a 10-unit multiplex and ADA-compliant adjacent duplex that provides 12 total affordable rental housing options for families and individuals.
Key Partners Involved:
- Developer: Frontier Development Group ($200,000 investment)
- Banking Partner: ESB ($750,000 loan)
- State Housing Agency: Kansas Housing Resources Corporation (KHRC)
- Moderate Income Housing Grant (MIH) ($650,000 award)
- Kansas Housing Investor Tax Credit (KHITC) ($360,000 award)
- Historical Tax Credits ($500,000 certificate)
- Kansas Department of Commerce: SHOVL funds ($25,000 award)
- City of Wamego: Provided a zoning variance and also provided coordination with utility hookups during an infrastructure project. Sponsored the MIH application.
- Construction Contractor: Frontier Construction, a division of Frontier Development Group
- Nonprofit Partner: Historic Equity Inc
- Architectural Firm: Architect One
Project Timeline:
Phase 0: Conceptualization
- Project Conceptualization: Frontier Development Group recognized the need for affordable housing in a mid-sized Kansas town, citing the town’s growing population but limited housing options.
- Feasibility Study: Initial analysis conducted by Frontier Development Group revealed that constructing a 10-unit multiplex with an adjacent ADA compliant duplex was economically viable. Discussions with local stakeholders showed strong support for new housing, including affordable options.
Phase 1: Project Planning and Pre-Development (12 months)
- Land Acquisition: Frontier Development Group identified a suitable vacant lot within city limits and purchased it with initial private capital and short-term financing from ESB Financial.
- Partnership Discussions: Meetings with local government officials and housing advocates highlighted potential partnerships with the Kansas Housing Resources Corporation (KHRC) and the Kansas Department of Commerce.
- Preliminary Design: Architect One was brought in to draft designs for the 10-unit multiplex and adjacent ADA-compliant duplex, balancing cost efficiency with energy-efficient construction techniques.
- Grant and Tax Credit Applications: Frontier Development Group applied for the Kansas Housing Investor Tax Credit (KHITC) and Moderate Income Housing (MIH), administered by KHRC, to help finance the project. The Kansas Department of Commerce was approached for economic development incentives.
- Financing: ESB Financial committed to providing long-term financing for the construction, contingent upon approval of KHITC. The tax credits were awarded to the project after review by KHRC, reducing the developer’s out-of-pocket expenses by $30,000 per unit.
- Community Engagement: Frontier Development Group engaged the community through local meetings to gather input on the project’s design and ensure alignment with neighborhood needs.
- Zoning and Permitting: Local zoning ordinances were reviewed, and the project received the necessary zoning variances and building permits.
Phase 2: Construction and Development (12 months)
- Groundbreaking: With all approvals in place and financing secured, the construction phase began. Frontier Construction, the construction division of Frontier Development Group, broke ground on the site.
- Milestone Achievements: Foundation and site preparation were completed within the first two months of construction.
- Vertical Construction/Renovation: The project progressed with framing, plumbing, electrical work, and HVAC installation. The developer closely monitored timelines to ensure that the project remained on schedule and within budget.
- Finishing Work: Interior finishes, landscaping, and energy-efficient installations (e.g., solar panels, high-efficiency windows) were completed. The project was developed with rental prices reflecting the need of the local workforce.
Phase 3: Leasing and Project Completion (3 months)
- Pre-Leasing Activities: Frontier Development Group, in collaboration with Frontier Property Management, started marketing the units as moderate-income units for workforce families. Special outreach was made to moderate-income families eligible for affordable housing options.
- Final Inspections and Certifications: The project was inspected for safety and code compliance, and all necessary certifications for occupancy were received.
- Project Completion and Ribbon Cutting: The project was officially completed, and a ribbon-cutting ceremony was held with local officials, community leaders, and project partners. The City of Wamego, Pottawatomie County Economic Development Corporation, Kansas Department of Commerce and KHRC representatives attended, highlighting the positive impact of state incentives on local housing development.
- Occupancy: The first tenants began moving in.
Project Outcomes:
- Housing Impact: A 10-unit multiplex development with an adjacent ADA-compliant duplex provided 12 affordable housing units for the local workforce. The efficiency and creativity of financing and grants helped meet the needs of tenants in which housing options were scarce.
- Economic Development: The project created jobs during construction and continues to support local businesses by attracting new residents to the area. Additionally, the project increased the town’s tax base. Further, by creating new opportunities for workforce housing, the growth of local businesses is made possible.
- Community Growth: The project contributed to the stabilization of the town’s housing market, offering more rental options in a tight market. It also helped prevent the displacement of moderate-income families by offering affordable rental units in an increasingly expensive area.
- Sustainability: Energy-efficient building techniques reduced the environmental footprint and lowered tenant utility costs.
Lessons Learned:
- Partnerships Are Critical: The success of the project was largely due to the strong partnerships among the developer, state agencies, banks, and local organizations. Each partner brought critical resources to the table, from financing to community engagement.
- State Incentives Matter: The Kansas Housing Investor Tax Credit and Moderate Income Housing grant played a key role in making the project financially feasible. This case demonstrates the importance of utilizing state grants and tax incentives to close financing gaps.
- Historical Buildings Create New Life and Allow Extra Incentives: The decision to work with a historic building not only improved the financial feasibility of the project by creating additional grants and tax credits but also gave new life to an otherwise derelict building.
Conclusion:
This 10-unit multiplex development with an adjacent ADA-compliant duplex in Wamego, Kansas stands as a successful example of how partnerships between developers, banks, state agencies, and community organizations can create affordable, sustainable housing that benefits both residents and the local economy. Through strategic use of state housing programs and incentives, the project met a critical need for affordable housing while contributing to economic development.
Read More:
Affordable Housing for Workforce Attraction and Retention
Housing Affordability in Pottawatomie County and Beyond