SHAWNEE, Kan. — Johnson County will help subsidize a new project to bring affordable housing to Shawnee. 

On Thursday the Board of County Commissioners (BOCC) voted 5-2 to issue a $1 million loan to support the construction of the Hedge Lane Apartments. 

The developers, Consolidated Housing Solutions and Sunflower Development Group, intend to create a 144-unit apartment complex near 75th Street and K-7 Highway in Shawnee. 

The non-interest bearing loan from the county will cover roughly 3% of the $30.5 million project, providing an approximate $6,944 investment for each unit within the complex.  

Commissioners Charlotte O’Hara and Michael Ashcraft voted against approving the loan. O’Hara voiced concerns about the loan setting a new standard for other developers to seek out loans or incentives from the county in the future. 

“They have a plan in place. They are a for-profit organization, and it’s not up to us to provide them $1 million interest-free,” O’Hara said. 

The developer will pay the county $10,000 annually for 14 years with the remaining $860,000 balance to be paid at the end of the 15th year. 

Approximately 40% of the project will be funded through Low-Income Housing Tax Credits (LIHTC) provided by the state. Roughly 47% of the project costs will be in the form of a mortgage lien and according to county records the remaining balance will be paid for by deferred developer fees, partnership equity contributions and construction period income.

Last November, the city of Shawnee approved approximately $30 million in multifamily housing revenue bonds for the project. Jay Leipzig, director of planning, housing and community development, said based on the bonds, the sales tax exemption for the project amounts to roughly $1.5 million.

Hedge Lane Apartments will offer 42 one-bedroom units, 80 two-bedroom units and 22 three-bedroom units. The project is considered workforce housing, meaning tenants would be people who make less than 60% of the area median family income.

For a single person wanting to rent an apartment, the income limit would be set at roughly $40,680; a family of two could make up to $46,500 annually; and a family of three would be capped at an income of $52,320. 

Deputy Director of Housing Services Jessica Hotaling said not all apartment residents will use housing choice vouchers (HCV) from HUD, but every tenant must meet income limitations. 

“The 144 units in this particular development will not all be accepting housing vouchers. The developer will accept housing vouchers if we have clients who would choose to live there, but all 144 units will not be filled with housing choice vouchers,” Hotaling said. 

Hotaling said the county has not estimated how many individuals with HCVs would occupy the apartment complex. 

Jason Swords, principal with Sunflower Development Group, said the project would not move forward without the investment from the county. 

“The dollars we are asking for from Johnson County, if it’s a million dollar loan, I’m willing to personally guarantee that loan. My company is willing to personally guarantee it,” Swords said. 

Swords said the property currently generates roughly $2,906 property tax, but estimates once the apartments are complete the company will pay close to $199,000 in annual property taxes. 

“I look at it as being a fully secured, guaranteed loan that has no risk or if there is any risk, [it’s an] extremely low risk to a county tax payer,” Commissioner Jeff Meyers said. 

Roughly a dozen people spoke during the public hearing Thursday morning. Kate Capps said the project could fill a housing need as area rent prices continue to increase. 

“Anyone of us may have a family member or a friend who is rent burdened despite the fact that they are working. The Hedge Lane Apartment project will give people a leg-up toward financial stability and a stride away from the possibility of becoming homeless,” Capps said.  

Rebecca Shipley said she feels the loan was not structured fairly for taxpayers, and it would be more appropriate to include a market-value interest rate on the county’s contribution. 

“My problem is that my tax dollars are now being treated as if you [the county] are a bank making a very poor investment with zero percent interest with our tax dollars,” Shipley said. “If they can personally guarantee the loan, then why don’t they personally go get the money and make that investment.”