The Pittsburg City Commission took initial steps this week toward creating a Rural Housing Incentive District (RHID) to bring new residential construction to an area west and north of the water treatment plant on Free Kings Highway and south of Pittsburg High School.
The new RHID is called Creekside East-Phase 1, and the developer looking to build houses in the planned neighborhood is Turnkey Developers LLC, of Arma. Bart Arnett of Turnkey Developers said custom-built houses in the development will be sold in the price range of $165,000 to $210,000.
In the past, use of the RHID Act — a state law which allows cities to incentivize developers to build locally by designating areas of the city as RHIDs, where developers pay up front for infrastructure costs but are later reimbursed through increased property tax revenue — has caused some controversy, notably in the case of Silverback Landing located east of the Pittsburg State University campus.
Commissioner Cheryl Brooks, both before being elected to the commission last year and more recently, has on several occasions questioned the city’s use of additional funds beyond what was originally approved in the RHID ordinance to pay for infrastructure improvements in the planned Silverback Landing neighborhood.
The commission unanimously approved a resolution Tuesday to hold a public hearing on the Creekside East-Phase 1 RHID ordinance on July 28, as well as a funding agreement for the RHID, but had some questions for city staff and the developers beforehand.
The funding agreement notes, in part, that "the parties desire to enter into this Agreement to provide for the funding of consultants used by the City to review, evaluate, process and inspect the Project and the Request and to provide an inducement to the Developer to assume such costs."
Commissioner Patrick O’Bryan said he had a question about the word "inducement" in the agreement.
"What the hell does that mean?" he asked.
"I may defer to an attorney," said Director of Housing and Community Development Quentin Holmes, who had been presenting the RHID proposal to the commission. "That sounds like an attorney word," he said.
"I think the inducement is talking about the fact that if the developer follows through with the RHID, then potentially they’re able to recoup these costs, just like they are any other costs that are incurred for the RHID," said City Attorney Henry Menghini.
Brooks asked about one specific paragraph in the resolution the commission subsequently approved Tuesday.
"I’ve read a lot of agreements on RHID but I’ve never seen this paragraph ever before," she said. "Why was it added?"
"The Development Agreement is hereby approved in substantially the form presented to the Governing Body, with such changes or modifications as may be approved by the City Manager and as may be approved as to form by the City Attorney," the paragraph read, in part.
"I believe this paragraph was added because the last RHID we did," Menghini said, "there was some communication between myself and the attorney that prepared it that I felt more comfortable if there wasn’t language that covered giving us the ability — and I say us, staff — to approve some things if they weren’t technically done yet, and this paragraph takes care of that situation."
Commissioner Chuck Munsell brought up concerns he said he’s heard from neighbors living in the existing neighborhood south of the new RHID about the impact the new homes could have on their own property values.
"You know that’s a common phrase you hear — ‘These houses are going to lower my property value.’ What’s the validity of that?" said Mayor Dawn McNay. "I mean that seems to me to be an easy thing to say."
O’Bryan said he agreed with McNay.
"I don’t think they really have anything to base that on that I’ve heard," O’Bryan said. "I think it’s more of a not-in-my-backyard issue."
Commissioners Brooks and Larry Fields said a negative impact on nearby home values could be a problem if the houses planned for Creekside East were going to be smaller, but they would be big enough that it should not be an issue.
Arnett said that, assuming the RHID ordinance is approved following the public hearing in July, Turnkey Developers will have 20 spec homes built to start the development by the end of 2021.