NWK Investments approached the Hays City Commission with its proposal for Big Creek Travel Plaza, which would be located at 230th Avenue and 55th Street, at the commission’s work session Thursday, seeking incentives for the $27.5 million project.
Those incentives include a Community Improvement District, which is a special sales tax assessed to customers of the business, the issuance of Industrial Revenue Bonds, which would allow the developer to avoid paying sales tax, and Tax Increment Financing, where city, county and school property tax is waived for 20 years.
Visitors packed the commission room at city hall. Commissioner James Meier was absent.
“We do believe the area warrants a truck stop,” said James Millensifer, vice president of development for Chance Management, the management company for NWK Investments. “It didn’t cost out without the economic incentives.
“The reality is the most we could recoup is about $14 million. We’d have 50 percent skin in the game. For the city, the return on investment would be 2.33.”
Millensifer said the project has changed and evolved in the last 18 months. The group originally looked at an auto-service plaza but decided a full-service truck stop was needed, though the expense was significantly higher. Public infrastructure such as water and sewer lines would need to be brought out to the project at a cost of $4 million.
The commissioners thought overall it was a great project. However, they all had reservations about it as well.
“The amount of incentives that you are asking for is a bit excessive,” said Commissioner Lance Jones. “I don’t think the taxpayers should be buying you land that is going to be a private business.”
Commissioner Henry Schwaller IV said they needed to provide the return on investment for NWK with the incentives and without the incentives. That information was not included in the proposal.
“According to our development policy, you are required to submit that,” Schwaller said. “We’ve approved a lot of projects since I’ve been on the commission. You are the first project to deny us these numbers.
“They are required so we can do our due diligence to tell the taxpayers that there is an economic reason for giving you these incentives.”
He said he could not support the project unless the information was provided.
Millensifer said they could not provide that information on the advice of their lawyer. He added if they don’t build the project, there would be no tax revenue.
Mayor Eber Phelps said the school and county rely on property tax and have faced budget constraints due to declining oil and gas valuations, which have resulted in less tax collected.
The commission was in agreement to take the TIF off the table. The IRB would also be off the table.
The commission would be willing to negotiate a 2-percent CID that includes the cost of the public infrastructure improvements, but NWK needed to provide financial information for review.
In other business, the commission discussed:
• The need for sanitary sewer heavy cleaning in the older sections of town. Staff recommended accepting the bid for Mayer Specialty Services LLC for an amount not to exceed $121,383.
• The King’s Gate Addition Phase 2 entrance sign. The large sign will need upkeep and maintenance. The developer of the subdivision has proposed an agreement for this purpose.
• Rezoning of the Hays Plaza 3rd Addition from single-family residential to multi-family residential. Staff and the planning commission recommended the change.