Sedgwick County leaders expect a spirited debate Wednesday about whether a tax-increment financing district for the proposed Bowllagio development at Maize and Kellogg would benefit or hinder the county.
“It’s going to be a judgment call for the commission,” Troy Bruun, deputy chief financial officer, said Tuesday.
Commissioners will go into their vote with an analysis by county staff that judges the pros and cons of the proposed redevelopment district, which the Wichita City Council approved by a 4 to 3 vote last month.
Jay Maxwell’s 86.5-acre development would include a bowling entertainment center, hotels, restaurants, retail and office space. Tax-increment financing would capture property tax on the increase in assessed valuation and be used for drainage improvements.
The county has the right to veto the district. So does the Goddard School District.
Going into Wednesday’s meeting, it appeared commissioners were split and board member Dave Unruh would be the swing vote.
He said Tuesday he didn’t know how he would vote.
“There’s a lot of arguments on both sides,” said Unruh, who initially voted against a TIF district for another of Maxwell’s projects, Southfork.
Asked how he would vote, Commissioner Richard Ranzau joked “loud and proud.”
Ranzau voted against such financing for the Southfork development near I-135 and 47th Street South.
The county’s policy on TIF districts is to support efforts to eliminate blight and promote redevelopment by allowing county tax revenues to be diverted as long as doing so creates no adverse impacts.
It has a five-step test. A proposed district is considered adverse if:
• Potential loss of tax revenue would hinder the county from delivering future public services effectively.
• The project is economically feasible without the county’s support.
• There’s not enough private funding to affect default risk.
• The cost is greater than the benefits.
• Timely information was not available for a review.
Bruun told commissioners that the second criteria “to me is the only relevant question in our policy.”
“I think he has enough skin in the game,” Bruun said of Maxwell.
Maxwell has told the city and county that he has $14.2 million in equity and $56.8 million in mortgage debt and construction financing.
Bruun also noted that “this is the only TIF district capturing 65 percent. The county would get 35 percent of any increase in value.”
The county’s analysis says there are 23 homes in the boundaries of the proposed district, 13 of which are in a floodplain. Most are in The Dell, a neighborhood near Cowskin Creek prone to flooding on Wichita’s west side.
When the City Council considered the district, member Jeff Longwell said it would be at least a decade before the city could afford to pay for millions in drainage improvements that would be covered by the TIF revenue.
Commission Chairman Tim Norton said drainage improvements would be a perk of the project.
He said the commission must decide “whether the drainage and water issues that have plagued that area for many generations are so profound that a county would want to participate in fixing that for future constituents. We’ve had some major flooding issues in those areas. This could be a good funding mechanism to fix some drainage problems that have been around for a long time.”
Commissioner Jim Skelton said that was true for the Southfork project as well.
“We pulled 100 houses out of the floodplain when we did those drainage improvements,” Skelton said.
But commissioner Karl Peterjohn said they were “looking at one piece of a very large puzzle. This area is just 86 acres.”
The flooding problems are bigger than that area, he said.
The city also already has approved a community improvement district for the project, which will allow extra sales tax to be levied.