Positive economic indicators attract developer.
Oil drilling, wind farm development and transmission line construction in surrounding counties and economic development in Pratt have created a demand for rental housing not easily filled.
"People come in here (Pratt Area Chamber of Commerce office) every day, asking for rental housing," said Executive Director Jan Scarbrough.
Late in the summer, she had several conversations with three new teachers hired by USD 382 who wanted to rent for a while before deciding where in town to buy homes. They eventually found what they were looking for, she said, but in several visits each reported "not yet."
Scarbrough is excited about the proposal a Kansas City firm made to the Pratt City Commission on Monday, seeking a resolution of support for a 48-unit apartment complex on city-owned land at the northwest corner of Sixth and Fincham streets.
MRE Capital, LLC, intends to apply for tax credits from the Kansas Housing Resources Corporation for the development of affordable rental housing. The application is due Feb. 1, and credits will be awarded in May.
The project hinges on receiving the credits.
"The credits would allow us to do the other phases," said Jacob Mooney, referring to duplex units called for in a second phase. The apartments could be built without assistance, but not of the quality the MRE Capital-owned Interstate Holdings, LLC, builds.
The city's resolution of support describes the property's amenities: a fitness and game room, onsite management, a green area, washer and dryer hookups in units, full kitchens, energy efficient design, picnic tables, playgrounds, and outdoor covered seating/benches.
The resolution is effective until Feb. 2, 2014, and if any characteristic changes prior to the issuance of a building permit, the resolution is null and void.
Mooney estimated the market value of an apartment at $900, but with the tax credits, they could offer them to qualifying tenants at $500 to $550.
The Kansas Housing Resources Corporation has reserved approximately $60 million in ten-year credits. Mooney said in some years, a dozen or so applications were submitted, and last year there were 40. Eight to 10 projects typically receive credits.
If credits are awarded, construction could begin in the summer, with an estimated completion date eight to 10 months later.
The company has built about 60 similar projects in Kansas, Missouri, Oklahoma and Arkansas. Mooney said they had looked at Pratt earlier, but there were several "negative indicators," which have now "turned the corner."
He mentioned oil and wind development, as well as an upward trend in median income and a downward trend in median age for Pratt.
"The oil boom is putting pressure on the market," Mooney said. "What is out there (rental housing) seems geared for older people."
The housing development, being called Tallgrass Creek, is targeted to young families. Typically, families live in apartments for a few years, and with lower-than-market rental rates, save money and move on to more traditional housing, according to Mooney.
He described similar properties as places where you don't see any cars during the day, because everyone is out working.
The initial proposal is for either two-3 story buildings or three-2 story units. The apartments are about 30 percent more energy efficient than similar units, Mooney said. Three-bedroom apartments are about 1,200 square feet and two-bedroom just under 1,000.
MRE is not asking for incentives from the city.
"We're not asking for tax abatement or assistance building roads," Mooney told commissioners Monday. "We will pay property taxes."
City Manager Dave Howard explained to commissioners that the city had purchased the land in the last three months, but it had not been annexed, and zoning was agricultural.
He said there had been some earlier discussions about using the property for overflow parking from the Green Sports Complex, but the city also owned land to the east of the ball fields.
"This proposal (Tallgrass Creek) will fit the land," Howard said.
A contract of sale, included in commissioners' material Monday, but not acted upon, called for the sale of up to 25 acres of land to Interstate Holdings, LLC.