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Downtown Wichita Hotel a Model Project?

The Wichita Eagle, Kan.McClatchy-Tribune Regional News

Sept. 13, 2011--Downtown Wichita needs the $30 million Douglas Place project for the new hotel rooms and new life it would bring to the key location of Douglas and Broadway. But it would be preferable if this great idea weren't loaded up with so many complicated layers of city incentives and financing help, and if it were clear how much skin the developers will have in the game.

This may be the model project for Project Downtown, as envisioned by Boston consultants Goody Clancy: The 117 rooms in its upscale Ambassador Hotel will fill a niche as Wichita competes for conventions. It will energize a section of the crucial Douglas corridor that has long been dormant. Its renovation will properly honor the amazing history of the site, a former Dockum Drug Store where members of the local NAACP Youth Council staged the 1958 sit-in that led to African-Americans being allowed at lunch counters at all Rexall drugstores in the state. It will provide more downtown parking and green space. It will encourage more redevelopment around it, as other businesses see opportunities to cater to the boutique hotel's guests.

But the gargantuan item on today's Wichita City Council agenda comes with 11 steps and 200-plus pages of backup materials explaining its tax-increment financing and capital improvement program funding (for a 282-space public parking garage and urban park), special assessment financing of facade improvements, industrial revenue bond financing, sales-tax exemption related to its renovation, hotel guest tax rebate, 2 percent community improvement district sales tax and more.

And though the agenda item mentions a $12.7 million developer bank loan and $7.7 million in "developer equity," City Council members should not approve the deal without clarifying how much developers are contributing in conjunction with the taxpayers' $7.5 million-plus. Should tax credits count as equity? Do council members agree with City Manager Robert Layton that the bank loan counts as developer skin in the game?

The downtown plan promised that the private sector would lead the capital investment in Wichita's new downtown, with public dollars reserved for items of broad public value such as parking, streets and parks. The entire downtown plan envisioned $500 million in private investment and development supported by $100 million in public incentives and spending. Is Douglas Place, the first big proposal out of the chute, to be an example or an exception?

One element of the complex proposal before the council deserves unreserved praise, though: a limit on the developers' ability to protest and attempt to lower their property taxes. It may seem like common sense that a developer getting tax breaks and special financing up front shouldn't be able to lobby for lower taxes later. But because developer Dave Burk did so a while ago on a publicly owned Old Town property he leased and he's now involved in Douglas Place, the city is right now to spell out the rules and protect itself.

-- For the editorial board, Rhonda Holman


(c)2011 The Wichita Eagle (Wichita, Kan.)

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