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The Rundown – Commission rejects new proposal for S. Kansas development

Post Date:02/16/2018 10:20 AM

The Rundown is prepared by the City of Newton Public Information Office to summarize the City Commission meeting and does not represent official Commission minutes.

7 p.m. Feb. 13, 2018, Newton City Commission meeting

At a work session Tuesday before the regular meeting, the City Commission rejected the latest financing proposal for Occidental Management’s development on South Kansas Avenue.

In this proposal, Occidental is asking the City to pay for all the needed public infrastructure, such as water main extensions, street extensions and signalization. The total cost is estimated at about $4 million, which would cost the City about $300,000 a year in debt service.

Based on Occidental’s projections for the first phase of development, the City stands to gain $301,021 in new property and sales tax revenues, making the project a break-even proposition at best for the City.

This proposal is a change from the financing option Occidental presented in November, which called for all site development costs, including public infrastructure, to be financed upfront by the developer. The developer would then recoup the public infrastructure costs over time through a portion of the new sales and property taxes generated on the site, similar to a Tax Increment Financing (TIF) district. 

But City staff had warned Occidental that the plan might be a tough sell for the two other taxing entities involved, Harvey County and USD 373. So Occidental withdrew the plan for the TIF-like structure.

City Commissioners said Tuesday they are not comfortable moving forward with a break-even plan with no guarantees. City Manager Bob Myers suggested that the City ask Occidental to reconsider the TIF-like arrangement and make a direct pitch to the County and school district.

City staff will set up a joint session in coming weeks with the County Commission, Board of Education and Occidental representatives to discuss the proposal.

Hehr International

The Commission authorized the closeout of Industrial Revenue Bonds for Hehr International issued in 1986 and refunded in 1993. Darin Calbert, manager of Hehr’s Newton facilities, said the IRB program had allowed for the purchase of new equipment, from aluminum extrusion benders to glass edging machines to a full tempering line. That, in turn, helped Hehr to expand operations and hire additional employees. Hehr currently employs about 100 people between its two Newton plants. Its Newton facilities offer products that serve the RV, horse trailer, mass transit, furniture, and home appliance industries. 

In other action, the City Commission:

  1. Received the 2017 Year-End Financial Report. The City finished the year significantly under budget, with a General Fund ending balance of 18 percent.
  2. Received a report on Harvey County Drug Task Force activities and reviewed a draft interlocal agreement to formalize the task force.
  3. Approved a request to close Athletic Park Circle on April 21 and to waive special event fees for the Newton Bible Christian School 5K walk/run.
  4. Approved a request for use of the Sand Creek Bike Path on March 17 for the St. Patrick’s Day Girls on the Run fundraiser.
  5. Approved a request to close Main Street from Fifth to Sixth on April 8 and to waive special event fees for the Ain’t No Joke Food Truck Rally.
  6. Approved a request to close Main Street from Fifth to Seventh on May 5 and to waive special event fees for the Newton Downtown Car Show.
  7. Received an update on the ReNewton Bicycle Initiative, which is now Walk & Roll Harvey, a subcommittee of the Healthy Harvey Coalition.

For more information, please contact Director of Communications Erin McDaniel at 284-6055 or