Lawrence approves tax breaks for 131-unit northwest apartment project
Lawrence gave up about $80,000 in sales tax for a 131-unit northwest apartment project, betting more market-rate housing will help a strained market. The 3-1 vote revived a familiar fight over incentives.
Lawrence commissioners agreed to give up about $80,000 in local sales tax revenue to help a 131-unit apartment project rise near Wakarusa Drive and Queens Road in northwest Lawrence, approving a package that lets the developer avoid sales tax on eligible construction materials. The 3-1 vote on June 16 kept the city in the middle of a familiar debate: whether tax breaks for market-rate apartments are worth the public cost when housing remains tight across Douglas County.
MRES Lusso Holdings LLC, a Nebraska-based company working with Metonic, sought industrial revenue bonds of up to $37.3 million for the project on roughly 10 acres. City agenda materials said the bonds would provide only a one-time sales tax exemption on qualified construction materials, would not include a property tax abatement, and would create no city debt or repayment obligation because the financing would function as a conduit. Bond counsel had first described the request as $35.3 million before recommending the higher ceiling so the amount would cover all eligible costs under Kansas law.
The project does not meet the city’s affordable-housing provisions, but Lawrence’s own housing study underscores why commissioners continue to see even market-rate units as part of the answer. Presented June 3, the study said the city needs more than 6,300 new homes over 10 years, including 2,920 for-sale units and 3,395 rentals, and should be producing about 500 units a year by 2028, roughly Lawrence’s historic average. It also said housing should be split about 46% for-sale and the rest rental, while the city works to make development more predictable and preserve older affordable homes through rehabilitation.
The broader affordability picture remains harsh. Earlier city reporting said Lawrence home prices had risen 69% since 2018 while incomes grew only 3%. A separate affordable-housing study found 57% of renters could not afford a two-bedroom unit priced at $1,252, about half of potential homebuyers could not afford the median sale price of $323,000, and 76% of survey respondents said they had trouble finding housing they could afford. Lawrence and Douglas County adopted the A Place for Everyone plan in 2024, aiming to expand affordable housing for households at or below 80% of area median income.
Vice Mayor Mike Courtney cast the lone dissenting vote, and Commissioner Kristine Polian was absent. Metonic president Kassie Inness called the incentive a “critical step” and said the company had prioritized collaboration with the city. City staff said the developer had voluntarily offered to make 10% of the units affordable for five years at 90% of area median income, but Commissioner Amber Sellers asked whether those units could instead be affordable at 80% of area median income. Mayor Brad Finkeldei framed the decision as a tradeoff between the city’s forgone sales tax and the benefit of the project, a calculation Lawrence is likely to keep revisiting as it weighs growth against public revenue.
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