MARC JACOBS
Hutch Post
HUTCHINSON, Kan. — The Hutchinson City Council unanimously voted Tuesday to authorize City Manager Enrico Villegas to issue notices of breach and non-compliance to developer Jim Strawn after determining he failed to meet contractual obligations for the Plum Creek Subdivision.
City officials cited two primary reasons for the breach: the failure to construct the required number of homes by the contract deadline and delinquent property taxes.
Villegas told the council Strawn has received significant public assistance for the development, including a special benefit district, a reinvestment housing incentive district, a moderate-income housing grant and Kansas Housing Investor Tax Credits. Combined, those incentives total approximately $2.885 million. In addition, the city has issued $1.71 million in temporary notes, creating potential financial exposure if the project fails.
Under the development agreement, Strawn was required to have 29 homes completed by June 30. Villegas said none have been finished, noting the most recent building permits were pulled 470 and 275 days ago. He also referenced previous Strawn developments, including Ashton Estates and Oxford Point, that failed to meet expectations.
"Sometimes you take risks, and it pays off," Villegas said. "In this case, it's not very good. When I asked at the last council meeting, 'Will this be a rinse and repeat?' this is what I was trying to get at. That is what I was trying to press at."
Assistant City Attorney Cody Smith recommended the city move forward with enforcement under the contract rather than grant additional time.
"None of Strawn's reasons for delays of construction are permitted delays in his contracts with the city," Smith said. "In two years, he's never asked this governing body for an extension. While there is a clause for delays, there are no facts that fit within it."
Smith advised against offering any further extensions, saying ample time had already been provided.
Villegas also said Strawn is approximately $317,000 delinquent in property taxes owed to local taxing entities as of July 21. Remaining current on taxes is a requirement of the development agreement.
"It interferes with the good faith partnerships, where if you're asking for city tax money, are you being a good steward, as well?" Villegas said.
The council approved the motion unanimously. Council Members Steve Garza and Stacy Goss both voted with a "hell yes," while Vice Mayor Greg Fast responded with an "offensive yes," referencing comments made previously by Strawn blaming the city for project delays.
Jim Strawn was not present during Tuesday's meeting. We reached out to him, and he responded with the following comment.
"We are diligently working to develop the project and despite challenges the project has momentum. The timing of the city's action is unfortunate, but we will work to cure the deficiencies. Unfortunately, there were misstatements made by City staff which don’t portray everything that has occurred with project and there has been a lack of communication between both parties. This is a great project in a great location that will be great homes for families in the near future."