Four developers present to City Commission for $25 million housing project

After sitting through hours of presentations from developers about a potential housing project in the city, the members of the Salina City Commission decided they needed the weekend to think about, and sift through, all the information before making a decision.

With the state of Kansas awarding the city $25 million for housing, the Salina City Commission decided it needed to consider carefully about which developer it would choose to use these funds.

"It's going to be a long day, but it's going to be a very important and exciting day for Salina," said Mayor Mike Hoppock after opening the special meeting.

Which developers presented and how were they chosen?

The city sent out a request for proposals (RFP) for interested developers, with the city looking for projects that would create multi-family units to support 500 new jobs in the community.

A committee of city staff and a financial advisor for the city reviewed all the proposals submitted.

"We received 13 (proposals), which is a terrific indication of interest in development in the community," said City Manager Mike Schrage. "We narrowed that field to seven for interviews."

Schrage said the original and typical process for RFPs would be for that committee to bring forward one recommended proposal to the city commission to approve and then enter into negotiations with that developer.

"The change at (the commission's) request was to bring multiple presenters to you...to give you a chance to deliberate on them," Schrage said.

With this change, the four top developers came to Salina and presented, in a random order, to the commission. These four consisted of 635 Holdings, Salina Destination Development, Perry Reid Properties and Flaherty & Collins Properties.

While each development group is unique and no two presentations were alike, there were some common threads among each presentation.

The first three presentations shared a location in common, property along the western side of Virginia Drive across the street from Menards.

635 Holdings

For 635 Holdings' proposal, this site, which it calls West Magnolia A, would bring around half of the 500 requested units in its first steps.

"(That's) probably the first mover site," said Robb Heineman. "That's initially where we would do 240 to 250 units."

In addition to this site, which would eventually have more than 300 units when completed, 635 is also proposing to develop land on Cortland Circle, south of Schilling Road near Sunflower Bank, which would consist of just over 100 units and a third location downtown, at the corner of Third and Mulberry Streets, that would consist of another 44 units.

In total, the 635 proposal is estimated to be around $83 million, but the developers have hopes that more than just this housing project could be on the horizon, with a second potential project bringing a park and athletic complex west of the Magnolia property, including a partnership with Sporting Kansas City, the MLS team that Heineman is a partial owner of.

While the commission seemed interested in the idea of this complex, Mayor Hoppock noted this would be something to look at down the road as housing is the priority.

"That has nothing to do with the apartments we're discussing, the 500 units," Hoppock said.

Salina Development Destination

For Salina Destination Development, the site near west Magnolia would consist of 366 apartment units and 134 duplex, or townhome, units.

Rick Worner and Dave Murfin are the principal figures with Salina Destination.

"Dave and I have been partners over 10 years," said Worner. "We are Kansans, and I think the only group you're going to see where the ownership is Kansans. We invest in Kansas, we live in Kansas."

Worner said a benefit of being a Kansas-based company is that as this project proceeds and evolves, having people close by and people dedicated to this state is important as decisions are made. He also said this project wouldn't be the first of its kind for the duo.

"We're about to build apartments similar to this in Derby, Kansas," Worner said.

The Salina Destination proposal is estimated to be around $68 million.

Perry Reid Properties

One common element that was seen throughout all of the presenters was the proposal of having at least some multi-story and multi-building apartment complexes with a variety of options, such as studios, one-, two- and three-bedroom units.

Perry Reid Properties consisted solely of this multi-story building approach, with a proposal for the west Magnolia site mentioned by the first two developers and another complex just south of Menards on Virginia Drive.

"Perry Reid Properties is the common denominator of the two projects," said Tom Huston, general council for the developer.

A unique piece of the Perry Reid proposal is that it actually combines two development firms, with Perry Reid itself developing the southern property, which it calls Magnolia Commons.

Joining Perry Reid in this proposal is Anthony Properties, which will handle the development responsibilities of the western site, which the group calls The Royal. Perry Reid would then handle construction and property management of The Royal.

These two projects would each consist of 252 units, with a total of just over 500 units. The combined cost of these projects is estimated to be just over $93 million.

Flaherty & Collins

The final presentation was by Flaherty & Collins Properties, which was the only of the four which did not propose developing the west Magnolia site.

Instead, Flaherty & Collins proposed site would be to the east of Cedarhurst Senior Living, which is currently being built in the 2600 block of South Ohio Street.

"We're (looking) at 500 units across three different building types," David Wingerson, development associate with the company.

These units would consist of two-story and three-story apartment buildings in addition to a series of townhomes.

For the Flaherty & Collins project, the estimated cost is the largest of the four, at nearly $107 million.

Next steps for the commission

After the presentations, the city commission discussed what it wanted to do next. Each of the commissioners had additional general questions for city staff about the process.

Much of these questions involved the various sites of land proposed for the projects, checking to see what the current status of the ownership of the sites and where the developers were in the process of acquiring these sites.

Another task given to staff was to look at the various rental rates proposed by each of the developers and how those rates fit into the current and projected landscape of rates in the community.

In the end, the commission voted unanimously to host another special session at 1:30 p.m. on Monday, April 3. This would give the commissioners time to review the proposals and bring forward further discussion before deciding which one the commission would select to use the $25 million funding from the state.

If all goes according to plan, that decision will be made at the end of that special meeting and the process of negotiations on a development agreement with the chosen developer will begin.

Depending on which developer the commission chooses, and what comes up during these negotiations, will determine how soon the project will be completed. Despite this, Schrage said the timing to complete this project is pressing, with the state funding needing to be spent before the end of 2026.

"(There's also) the sense of urgency from the employers (in the community) on the front end," Schrage said. "We've been hearing for a long time that sense of urgency for the need of the housing for (these) employers to be able to hire."

Every presentation, and the commission's discussion on the matter, can be viewed, in two parts, on the City of Salina's YouTube page.

This article originally appeared on Salina Journal: Salina Commission hears presentations for housing development project