A $21.5 million industrial revenue bond issue for a downtown apartment and business community received unanimous approval from the Wichita City Council on Tuesday, but not before some council members had a testy exchange from the bench with opponents of public incentives for private projects.
The Lux is a $24 million “community within a building” renovation of the old Kansas Gas & Electric Co. building on the northwest corner of First and Market.
Developers Robert Eyster and Michael Ramsey plan to renovate the existing 175,000-square-foot building into 60 residential units for homeowners and renters, along with office and retail. Planned renovations include an amenities penthouse, featuring a pool, workout facility, fireplace, common room, theater and kitchenette. In addition, the building will receive new elevators, according to city documents.
“It’s a very exciting project for downtown,” Vice Mayor Janet Miller said. “Another building that’s coming on line.”
Jeff Fluhr, president of the Wichita Downtown Development Corp., praised the project, saying the new residences it will add to downtown are essential to the area’s revitalization.
“Residential is a core to the redevelopment of the city center,” Fluhr said. “It’s driving so many of our other markets.”
The bonds provide financing for the project and will be placed with Intrust Bank.
The project will not receive a property tax exemption, said Allen Bell, the city’s director of urban development, and will generate a “substantial boost in property taxes from the current property.”
After the meeting, Bell said the estimated value of the completed project is $21.6 million, far above the building’s current appraised value of $687,600.
The city revenue bond issue will provide a sales tax exemption on construction materials. And Lux developers have applied for historic tax credits as well.
Bob Weeks, a frequent critic of public incentives for private developments before the council, criticized the project, saying the historic tax credits that will be part of the Lux financing package force taxpayers to pay extra taxes.
Miller leveled a blast at that ongoing criticism.
“People can be as critical as they want of incentives, but before we had an (incentives) package and before we had a downtown plan, our downtown was rotting and abandoned,” she said.
“Today, we can safely say that in 2011 and 2012 there were $64 million in projects completed downtown and in 2012 $97 million under way and in planning, much of that private investment,” she said.
“There’s lots happening downtown, and I’m pleased to add this one to the list.”
According to city documents provided to the council, the project includes $2 million in developer equity and a $750,000 special assessment for facade work and asbestos removal, essentially a city loan. The remainder of the project will be financed by the industrial revenue bonds.
The building was designed in 1953 by Thomas and Harris Architects in Wichita, with an addition designed in 1969. A five-story addition was built in 1969 on the west side of the building. The building underwent its last major renovation in 1988, when it was sold to the Protection One Alarm Co. Protection One occupied the building until 2009.