Before the end of next summer, 41st Street where it is now a rock road will be extended as two-lane concrete pavement with gravel shoulders in an area next to the city’s Vineyard Park.
The cost to pave it will run more than $692,000, to be paid for with a special development district sales tax that was begun in 2005, and in place for 22 years until 2027.
Project Manager John Braun told the Hays City Commission during their regular meeting at City Hall on Thursday evening that strong tax receipts from the special district make it possible to extend the pavement.
The money comes from customers of businesses within the Transportation Development District for the Home Depot Development, who pay an added three-quarter-cent sales tax.
Four of the city’s commissioners voted to extend the street over the objections of Mayor James Meier, who opposed the proposal last week at a city commission work session and restated that again Thursday.
“I think that if these funds had to come out of the general fund, there is no way that we’d be building a street to nowhere out in the middle of nowhere, along with the water line,” Meier said.
He advocated ending the sales tax, which originally was put in place to pay for the initial infrastructure for Home Depot.
“I think it would be beneficial to that district to see a decrease in sales tax of three-quarter percent,” Meier said. “I am wholly and fully against this. I think that this is a mistake. I think that years from now it will be viewed as a mistake.”
Vice Mayor Henry Schwaller, a long-time member of the commission, said he appreciated Meier’s comments, and thought they were well-thought out and well-founded.
“I do respect your dissent and I hear you, and if we had not agreed to this in 2005, 2006, I would be with you,” Schwaller said. “But it’s something we’ve planned for a long time.”
He explained that when the city entered into the agreement with Home Depot and the developer, the retailer supported the tax, including continuing that support if the original debt was paid off early.
“Our goal then, as it is now, was to connect Vine Street to Commerce Parkway,” Schwaller said. “When Kansas Department of Transportation had money, we were going to use this as a match to build it out. With due respect, and I understand your point absolutely, this isn’t a road to nowhere because it is our intention to see growth happen to the north and to the east and that is why we took an option on a piece of ground at the other end of this road. “
The businesses in the district include Home Depot, IHOP, Hampton Inn, Town Place Suites, JT Travel Plaza, Taco Grande, and a yet-to-be-developed area that includes 47,000 square feet of retail space, said Finance Director Kim Rupp.
Commissioners Sandy Jacobs, Shaun Musil and Ron Mellick also supported paving the road.
Musil said if the city doesn’t pave it now with the tax money, it could end up coming from the general fund later.
“I think there will be development out there and hopefully it will be sooner than later,” Musil said.
Over the last 163 months, the TDD has collected a total of a little over $2.7 million, Rupp said, or recently over the last three years the TDD averaged about $247,000 in revenue per year.
Given the current balance of the sales tax since the bonds were retired, the street improvement could be paid off in about 18 months, Rupp said.
“I would love to see it go all the way from Vine Street to Commerce Parkway,” Jacobs said in offering her approval. “Having the funds and the ability to do it now with the TDD money is a very good way to do it.”
The extension would include a six-foot-wide sidewalk along the south side of the road, as well as 12-inch waterline along the extent of the project. Construction could start in March and be done in 120 working days, Braun said.
Of five contractors, the low bid of $692,133 came from Paul-Wertenberger Construction Inc., Hays.
“When I look at this I don’t look at it as a road to nowhere,” said Mellick. “I look at this as a bridge to somewhere. You can’t develop on either side of the actual road. This is a bridge out to where a developer will be able to afford to put in housing or even commercial. We have two large tracts of ground on the north part of the city, south of 41st, that haven’t been developed and the reason it hasn’t been developed is they want too much money for it. The key to affordable housing starts with affordable land. This gives another possibility of some affordable land and hopefully some affordable housing.”
Meier said the city is spending money on infrastructure in the hope that something will develop “and there’s absolutely no evidence to show that’s going to happen.”
Meier said he respects the others’ opinions and added, “I hope that you’re right. I hope for the sake of the community that that’s right.”
With the original bonds paid off early, Rupp said the city could pay for the project with city idle funds or general obligation bonds, then get reimbursed with the sales tax. Using city idle funds would save $13,500, over debt from a short-term bond offering.
In other business, the commissioners approved a reimbursement of $19,668.70 to Hays Recreation Commission, which manages the Hays Aquatic Park for the city. The city is contracted to reimburse Hays Rec for 50 percent of any operating loss up to $26,000.
The commission also agreed to take the first of three steps in an annexation request by Robert and Sondra Swift for a 23.3 acre piece of ground zoned for agriculture on the west side of the U.S. 183 Bypass and West 33rd Street. If annexed, the Swifts plan to develop it. Currently 500 feet outside the city limits, a portion is known as CreekSite Acres, formerly Bahl Mobile Home Court. Sewer is on the east side of the bypass, and the developer plans to extend a city water main at no cost to the city, according to Public Works Director Jesse Rohr.