A land purchase north of Interstate 70 by the City of Hays will help developers beat the sky-high prices being asked for land fronting the busy highway.
With some sellers on I-70 asking upwards of $200,000 an acre, the city commission Thursday evening at its regular meeting voted to purchase a large parcel of land for about $8,800 an acre.
“We can purchase this 91 acres for the same price that you can only buy one and a quarter acres on north Vine,” said City Commissioner Ron Mellick, speaking on why he favored the purchase.
“We could then offer this land at a reasonable price, for retail, manufacturing, business and even affordable housing development,” Mellick said. “The private sector over the years have invested in themselves, but now is the time and place that we have a chance to invest in ourselves, and in the future of Hays.”
City Finance Director Kim Rupp said city officials would start the closing process today by signing checks to buy the farm ground from the Cathy A. Braun Revocable Trust of Hays, Kansas.
After that, the land is ready to divvy up in parcels for sale to developers interested in purchasing tracts for commercial or residential development. The process will require rezoning, as well as extending city utilities to the land.
“I think this is a great bargaining chip,” said Mayor Henry Schwaller IV. “It may not get developed this year or next year, it may be 10 years from now.”
Commenting that the city’s budget isn’t driven by property taxes, but by sales tax, Schwaller said the region needs more people, more housing and more retail.
“We are a regional economy that draws over 90,000 northwest Kansans for shopping, education and healthcare,” he said. “If we let this land go now, we have essentially folded our hand and walked away.”
The City Commission’s approval Thursday to buy the land at 27th Street and Commerce Parkway was a close one, with three commissioners voting for, and two against.
But discussion of whether to buy or not was not contentious.
“I’m not against it, I’m just not for it,” said City Commissioner James Meier, who voted against the purchase. “I think we could get better use out of this money someplace else.”
Likewise, City Commissioner Shaun Musil, the other “no” vote, said he hopes that in 20 years or less that the purchase will prove to be a good move. Saying the deal isn’t a bad one for Hays, Musil said he just doesn’t think retail is expanding anywhere in the nation right now.
Critics say the city shouldn’t be in the business of “land speculation,” Meier said, but he challenged that.
“I completely understand the reasoning behind wanting to do this,” said Meier. “In some respects I think the people opposed to this are opposed to it for the wrong reasons.”
There’s nothing wrong with the city buying land to promote development, he said.
“Cities do that all the time, it’s called industrial parks,” Meier said. “And the reason that they do it is because they want to bring in industry and jobs and thus tax revenue. And that’s exactly what this is. We’re buying land, wanting to bring in retail, which brings in tax dollars, which we survive off of.”
Mellick, Musil, City Commissioner Sandy Jacobs and Schwaller all mentioned that land prices along I-70, where Hays is developing northward, are sky high.
“We have businesses that come to Hays and want to locate in Hays, but walked away because they couldn’t acquire land at a reasonable price, and went elsewhere, where they could find land at a reasonable price,” Mellick said. “Private enterprise in the past has provided land, but now they are hindering the recruitment of retail, manufacturing, businesses, with their high prices of land.”
The city is buying the Braun ground for $800,000 plus shared closing costs and title insurance.
In comparison, Mellick cited two large tracts of land on Vine, north of I-70, one of which he said is listed at $220,000 an acre, and the other at $600,000 an acre. Taxpayers, he said, paid for the streets, water and sewer along the properties.
“These property owners did not pay for that, they are only paying the county taxes on $4,000-an-acre ground,” he said.
Similarly, Mellick cited land along 22nd Street from Canterbury Street to Commerce Parkway, which the city extended, along with water and sewer, for better traffic flow and in hopes of luring retail businesses and affordable housing.
“Overnight, this 4,000-an-acre farm ground suddenly is $80,000 to $130,000 per acre price,” Mellick said. “I don’t have a problem with the private sector making a profit, but it is starting to hinder the city of Hays growth.”
The community is screaming for affordable housing, Mellick said, but that can’t be done when starting with land that’s $80,000 to $130,000 an acre.
Jacobs, who made the motion to approve the purchase, said both developers and realtors have complained for years that land prices are too high. Retailers forced to look too far off interstate may go elsewhere, like another community, she said. Commerce Parkway, north of the Interstate, she said, can be developed as a gateway to the north Vine corridor, with its auto dealerships, Home Depot, restaurants and motels.
“I was in favor of completing the additional mile of 41st Street north of Home Depot, in fact I believe we should have gone all the way to Commerce Parkway,” Jacobs said. “I remember when a previous governing body struggled to justify an investment in infrastructure north of I-70 on Vine. Once the city did, that area started to grow. I believe that can happen here as well.”