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Russell City Council Approves Option to Purchase Real Estate Agreement for Senior Housing Development

Russell City Council 1-3-23
Russell City Council 1-3-23

The Russell City Council met Tuesday and approved an option to purchase real estate agreement with Mesner Development Company for a senior housing development in Russell east of St. Mary Queen of Angels Catholic Church.

According to City staff, the City has continued discussions with Mesner Development as they continue efforts toward a plan to build 12 duplexes (24 units) for seniors 55 and up. The proposed layout remains a cul-de-sac type extending south from South Main Street, which will include a community center for duplex residents. Discussion was also held regarding extending South Main Street all the way to Dorrance Street.

Mesner is based in Central City, Nebraska, but has developed senior housing units in several cities in Kansas, including in Hoisington. Housing Opportunities, Inc. of Great Bend will be the project owner and manager.

Chris Lenz with Mesner spoke at Tuesday's meeting.

Audio file

Mesner intends to apply for a senior age 55 and older Low-Income Housing Tax Credit Project through the Kansas Housing Resource Corporation. The first step of this process is a preapplication to the KHRC in hopes of an invitation to submit a full application. The preapplication is due January 5, 2024.

To satisfy the requirements of the preapplication, Mesner requested an option to purchase agreement with the City of Russell for the tract of land specified for future development of the project. Upon an invitation to submit a full application, the City and Mesner will enter into a memorandum of understanding or development agreement that further clarifies responsibilities and timelines with a requirement to commence construction within a specified time frame.

Also Tuesday, the Council approved an amendment to the grant agreement regarding the Holland Hotel building.

According to City staff, in 2022, the Council approved an agreement between the Office of the Kansas Governor, the Kansas Department of Commerce and the City where the Governor's Office and Commerce were to provide grant funds in an amount not to exceed $1 million to Russell to be used solely for expenses and costs consistent with redevelopment of the former Holland Hotel building into at least 10 rental units. If accepted, the City was required to provide quarterly reports indicating progress, evidence of expenditures and additional information as Commerce deems necessary until project completion, which must be by July 31, 2024.

Due to various delays, the project is not expected to meet the 2024 deadline, potentially exposing the City to default on the grant requirements. City staff met with Russell Development and determined that an extension to June 30, 2025 would allow sufficient time for project completion. The City Attorney worked with Commerce staff and an amendment to the grant agreement was prepared and then approved Tuesday.

Also Tuesday, the Council accepted a bid from Radke Implement for a Case IH Farmall 45C tractor in the amount of $35,750 and authorized the trade in of a 1977 John Deere 2240 tractor for the Parks Department.