This article was originally published in the Newton Kansan on March 7, 2015

Developers looking to build rental properties in Newton

by Jeff Guy

Developer Jason Van Sickle's plan to add nearly 300 rental apartments to Newton is backed by meticulous research showing a market for rentals here.

Van Sickle, a Wichita developer, plans to purchase 15 acres of city-owned land on the south side of First Street, west of Boyd Street, and build three multi-family apartment buildings there. Each building will contain 96 units - a total of 288 units.

He looked at demographics and demand in communities in Kansas, and Newton topped the list. "I really did my in-depth research and analysis to choose the communities that were right for my model," Van Sickle said in a Dec. 27, 2014, Kansan article.

At its Aug. 12, 2014, meeting, the Newton City Commission entered into a Letter of Intent with J Van Sickle and Company for the project.

Van Sickle plans to pay the City a total of $225,000 for the site, to be paid in three phases as the project develops. He did not seek any incentives or tax abatements for the project. The full project amounts to an almost $30 million investment in the housing market. Van Sickle is looking for investors.

A 2013 Housing Data Report prepared for Newton as part of the Kansas Housing Research Project (KHRP) indicated a need for rental housing in the city. The KHRP is a public-private initiative sponsored by Van Sickle & Company (JVSCo) and member communities of the Kansas Rural Housing Conference (KRHC), an organization Van Sickle founded.

The average community within the U.S. has a housing supply comprised of approximately 65% owner- occupied and 35% rental housing. In Kansas, the numbers are similar, with 66% owner-occupied and 34% rentals, the report reads. Newton has a higher level of owner-occupied housing with 67.8 percent and a lower level of rental housing with 32.2 percent.

"The net effect is that Newton has 1.4 percent more owner-occupied housing and 1.4 percent less rental housing than the average Kansas community," the report reads.

Since 2009, the occupancy rate for housing in Newton has declined by 2.9 percent - 1.6 percent higher than the national rate and .7 percent lower than the rate of occupied housing in Kansas, according to the report. The report shows a national increase in rentals from 2006 through 2012. Over that same period, rentals have increased in Kansas from 30.1 to 33.6 percent. In Newton, rentals have increased from 29.5 to 32.2 percent - a net change of 2.7 percent.

Van Sickle’s target groundbreaking date is April 1, 2015.He considered several sites in Newton but settled on land in the northwest part of the city, across from Athletic Park. He hopes the apartment development will promote other business and retail opportunities.

City Commissioners expressed appreciation to Van Sickle for the project, which is expected to boost economic growth on Newton’s west side and the Meridian corridor. The city will reserve several acres fronting First Street for future commercial development.

"We really think that can kick-start some positive things in the neighborhood," Van Sickle said. Another developer, Bill Caton, of Auburn came before the City Commission at its Feb. 24 meeting and requested the city donate 1.8 acres of land on which he plans to build an apartment complex.

The city owned land is at 12th and Sherman Streets. Caton is negotiating with Robert Smalley, of Newton, to buy the additional 4.2 acres he plans to build on.

In addition to asking the city to donate the land, Caton asked that the area be covered by the city's Neighborhood Revitalization Program (NRP), which offers tax rebates.

City commissioners tabled Caton's request for a later meeting.

Caton's plan to build in Newton was also motivated by market research.

Assistant city manager Tim Johnson said the the interests in developing in Newton are "signs of a compelling community that people want to be part of."

Johnson mentioned the three housing sub-divisions that have sprang up in Newton within the past 10 years. "Newton hasn't suddenly been discovered," Johnson said. "Newton has been on peoples' radar for years and years and years."