- Associated Press - Tuesday, September 22, 2015

JUNCTION CITY, Kan. (AP) - Junction City officials remain optimistic the lots the city took back from developers after overbuilding a decade ago will be sold, even though only two of the first 25 lots offered for sale received bids.

The city has 900 undeveloped lots in a land bank it created after a building boom in 2005 caused by reports that as many as 8,000 troops would be transferred to Fort Riley. About 5,500 troops eventually arrived but most preferred to live on base or couldn’t afford the new housing.

The city annexed about 1,400 acres to build new housing and took on $190 million in debt to finance infrastructure and for incentives to developers. When the recession prevented developers from paying special assessments or taxes, the city put the property into the land bank and is trying to get the lots back into private hands, The Topeka Capital-Journal reported (https://bit.ly/1MGUPzn ). City residents have paid the first seven of the 20 years of special assessments used to finance the infrastructure development.

City Manager Allen Dinkel said New Horizon Home Construction bid $6,180 for each of two adjacent lots, which already have utilities and streets leading to them.

The first 25 lots were not adjacent to each other, and many developers expressed interest if they could buy lots that were together, Dinkel said.

A committee dealing with land bank issues will determine how to move forward with selling the other properties. Dinkel said city officials are optimistic because of the developers’ interest in the lots but the process could be slow because it takes time to clear the title on a property when the entity that owned it may have dissolved.

“We know we’re not going to get all the lots sold in one day,” he said.

A buyer wouldn’t owe back taxes on the lots and would be eligible for partial tax abatements on improvements made on the properties.

The overbuilding and recession caused some developers to declare bankruptcy. Topeka businessman John Duncan pleaded guilty to fraudulent dealings involving the land, and former Junction City Mayor Michael Wunder was sentenced to prison for taking bribes from Lawrence developer David Freeman, who also served time for conspiracy to commit bank fraud.

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Information from: The Topeka (Kan.) Capital-Journal, https://www.cjonline.com

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