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Laws have tightened on things such as tax incentives and homeowners associations, a group of local lawyers said during a seminar this week.
At its annual business and real estate law update, lawyers from Adams Jones Law Firm covered topics such as tighter smoking regulations and standardized homeowners association rules.
At the top of the list is Wichita's Community Improvement District policy, approved in April, which sets more stringent restrictions than the state policy approved in 2009.
The city's policy, said Adams Jones president Mert Buckley, targets redevelopment in areas unlikely to develop otherwise, including neighborhood revitalization areas, the central business district or areas with a neighborhood plan, corridor plan or redevelopment plan.
In a CID, developers can tack on an extra 2 cents in sales tax on transactions made inside special districts where all property owners agree on the added tax. The developers could use the money to pay bills for construction costs, landscaping, bus stops, art and other projects.
Once those expenses are paid off, the city would end the special tax.
"It remains to be seen if that causes developers to go to other communities outside of Wichita," Buckley said. "The city has good reasons for doing this."
The first CID project downtown, Jim Korroch's Marriott hotel in WaterWalk, is represented by Buckley.
Jay Maxwell's west-side development group, Maize 54 LLC, is considering an application for CID status for its mixed-use entertainment district at Kellogg and Maize Road, officials there have confirmed.
How companies are taxed on the government incentives they receive is an issue, according to Mike Cannady, the firm's tax attorney.
"According to the IRS, if you're a corporation it's a contribution to capital made by a third party, but if you're an LLC it's in your gross income," he said.
"It's a huge difference in how you're taxed, since if it's included in gross income you're going to be taxed more quickly and pay more of it."
"Basically, the money you get from the city if you're an LLC is counted as income and you pay taxes on it as income," said Pat Hughes, another attorney with the firm.
"If you're a corporation, it's not considered income."
Smoking, real estate
Companies who hire smokers are now the "smoking police," Buckley said, in the wake of the Kansas Indoor Clean Air Act.
The law, which takes effect July 1, requires employers to provide a smoke-free workplace. Fines range from $100 to $500 for violations.
And on Jan. 1, the Uniform Common Interest Owners Bill of Rights Act becomes law, creating a set of rules for unit owners and associations in all kinds of real estate communities.
It established uniform rules for how such homeowners associations can be governed and their authority, including when associations can bring court action.
