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Editor's Note: A previous version of this story had an incorrect sales tax revenue figure. The story has been updated.
A hotel and a retail mall can use extra sales tax proceeds to finance their development, the Wichita City Council decided Tuesday.
The council approved community development districts for Jim Korroch's Marriott Fairfield Inn and Suites in WaterWalk and Christian Ablah's proposed retail development at the southeast corner of Central and Oliver.
The approval means the hotel can charge an extra cent or two of sales tax for up to 22 years, with the revenue rebated to them after the state and city remove 7 percent in administrative fees. That will mean about $1.4 million in revenue from the extra sales tax for the $12 million hotel, which includes $9.6 million in private investment.
Ablah's plan is to charge an extra cent for 22 years for his project, bounded by Central on the north, Oliver on the west, Third Street on the south and Bleckley on the east, according to a Tuesday council presentation. That will result in $12.5 million in funding.
Both issues drew some fire from the audience, which called the programs "corporate welfare," complaining about already high Kansas sales taxes.
Wichita businessman Craig Gabel said the city's not capable of growing new business, so the stores and hotel will pirate customers from other Wichita businesses.
"Someone's going to suffer," he said.
City officials indicated Tuesday that they're considering a possible signage requirement for retailers in the development districts, warning shoppers that they'll be paying extra sales tax if they buy products and services.
Ground was broken in July for Korroch's hotel, which will range between 115 and 130 rooms in Jack DeBoer's mixed-use WaterWalk downtown development.
It's the first of what downtown developers think are three or four new hotels needed to create enough rooms for large conventions and sporting events.
The hotel is the first project since DeBoer announced plans to turn WaterWalk into a largely self-contained mixed-use community of condos, office buildings, restaurants and retail.
Ablah's project of mall-like buildings "is about to bring forth some exciting economic development opportunities for the Central and Oliver corridor," said Korb Maxwell, a Kansas City attorney representing Ablah's Oliver Investments.
The biggest proposed community development district comes before the council Sept. 14, when a public hearing will be held on developer Jay Maxwell's request to establish a district for his Bowllagio mixed-use entertainment development at Kellogg and Maize Road.
