The city of Hays will turn over more than $284,000 in excess sales tax to Ellis County for the county’s $10.8 million Northwest Business Corridor project.
Ellis County is facing a shortage of $2.12 million to pay for the project, which will improve three heavily traveled county roads in a busy industrial area northwest of town.
The county has a $6.5 million grant from the Federal Highway Administration to pay for most of the project. The corridor project is a 55 mph bypass around Hays for north-south US-183 highway, considered key to a planned $40 million private travel plaza development for trucks and super loads.
City commissioners at their work session last Thursday at City Hall, 1507 Main, spoke in favor of giving the excess sales tax proceeds to the county.
“I know we have projects that we could utilize it for,” said Commissioner Sandy Jacobs. “This is not going to have an immediate impact on our budget in any way. I consider this a windfall, and when I look at windfall dollars I look for opportunity. I think this is a huge opportunity.”
Jacobs said turning the money over to the county is a statement of good faith in the big plans for Exit 157 on Interstate 70.
“This whole project, the city is going to be one of the biggest benefactors of it,” Jacobs said.
Commissioner Ron Mellick agreed and said he will approve it when it comes up for a vote at this Thursday’s city commission meeting in City Hall.
“This is money that we hadn’t budgeted for, so if we can help the county out in this situation, I would be in favor of that,” Mellick said.
Commissioner Michael Berges said the plaza and highway projects are beneficial to Hays in both the short and the long run.
Hays Mayor Shaun Musil said that while the city could use the money for streets, those needs have already been covered in the budget.
“This is going to be huge for the city of Hays,” Musil said. “The county, as most of us know, does a lot of in-kind work for us. Maybe they can even do more, possibly, in the next few years.”
Taxpayer money should be used to better the community, he said.
“This is going to be good for all of us,” said Musil.
City commissioners will vote Thursday on a resolution authorizing a transfer of the $284,000 to the county.
The money is left over from a general sales tax collected in the county from 2013 to 2018. The proceeds paid for remodeling the Ellis County Courthouse, jail and law enforcement center, as well as for building the Ellis County EMS facility. When all was said and done, there was $284,668 left over, which the county planned to return to Hays.
Ellis County Commission chairman Butch Schlyer, in a Feb. 3 letter to the city commissioners, asked the city instead to donate the money to the road.
“Based on the cost-benefit of the travel plaza project to the City of Hays, we would like to request the City initially commit a specific amount toward the County’s funding gap,” said the letter, specifically suggesting the sales tax.
Ellis County and the city of Hays have worked together on the Business Corridor for some time. Oilfield supply manufacturer Hess Services has 360 employees in the area, with a steady stream of big rigs driving in and out of its plant, hauling equipment to and from buyers in North Dakota, Colorado and Texas.
The travel plaza is a development by D&J Development LLC, a partnership of Hays businessman Dan Hess and Topeka commercial real estate developer John E. Brown.
Developer requesting $16.85 million in incentives
D&J is requesting $16.85 million in economic incentives in the form of $13.9 million from a Tax Increment Financing District, $2.9 million from a Community Improvement District, $1.5 million from assigning to D&J a Kansas Department of Transportation grant to the county, and conveying at no cost a 4.611-acre tract of city owned land to D&J.
The city has set Thursday evening for a public hearing on the request.
The 40-acre project at the northwest corner of 230th Avenue and 55th Street will be a 12,000-square-foot travel plaza with as many as 125 parking spaces for semitrailer rigs and 30 more for cars, according to finance director Kim Rupp.
It will also include a 6,000-square-foot truck wash. The 12-acre travel plaza will include truck scales, manual and automatic wash bays, a trucker’s lounge, showers and three quick-service restaurants.
The developers have said they want to break ground in March, starting with the travel plaza, which will take about nine months to build.
Endeavor Hospitality LLC, of Springfield, Mo., plans a 70-room deluxe extended-stay hotel. Construction will start in April or May and take six to seven months.
The upscale 4-acre RV park, with parking for 65 RVs, will have a swimming pool with cabanas, a dog park and other amenities.
The Community Improvement District is an added 2-cent sales tax on the development that is used to reimburse the developer on a pay-as-you-go basis for hard costs over 22 years. Rupp said D&J estimates $38.7 million annual retail sales in the development, including $3 million monthly from gas and diesel sales. Hard costs include everything above ground, such as landscaping, lighting, infrastructure and utilities, sidewalks, the parking lot, and entrance and exit drives.
The 20-year Tax Increment Financing District captures property tax in the development and reimburses costs for property acquisition, site prep, paving, grading, curb and gutter, parking, landscaping and other expenses. D&J estimates the development will generate $12.4 million in TIF-eligible refunds, Rupp said.