WSU expert to review Exchange Place plan
04/16/2010 12:00 AM
04/16/2010 6:30 AM
Stan Longhofer, director of Wichita State University's Center for Real Estate, has been retained by the city to conduct a third-party review of Real Development's Exchange Place project.
Longhofer's review will go before the Wichita City Council on Tuesday as it takes action on a request from Real Development to approve $2.3 million more in TIF financing for the downtown condo project.
Longhofer's job is to analyze city cash flow projections to see whether the Exchange Place project will generate enough new property taxes to repay the city's higher investment — $11.6 million instead of the originally approved $9.3 million in TIF revenue.
City staff has recommended an increase of $440,000 for Real Development, a total of $9.74 million.
What happens if the city says no is unclear: Real Development partner Michael Elzufon said a month ago that a no vote would kill the Exchange Place project.
But on Tuesday, partner David Lundberg called Elzufon's pronouncement "premature."
The city's debate centers around how quickly the Exchange Place condos can be sold.
Developers are confident the condos, ranging in price from $99,000 to $225,000, can be sold in five years.
But Boston-based Goody Clancy, the city's downtown revitalization consultant, has warned there are no guarantees the condos can be sold in a tight credit environment.
The Exchange Place project, including 230 condos in that building and the Bitting building, retail frontage and a 298-stall high-tech parking garage, carries a $46.5 million price tag.
According to developers and the city, Real Development's funding proposal for Exchange Place includes:
* $4.9 million in private capital from Real Development
* $30 million from a short-term loan to Real Development, backed by the U.S. Department of Housing and Urban Development
* $11.6 million in city-financed proceeds from the TIF, to be repaid from the taxes generated by increased value on the locations.
The HUD loan for Exchange Place is one of two refinancing packages Real Development is assembling, despite references by Lundberg on Tuesday to a single refinancing deal.
The group, also known as the Minnesota Guys, also hopes to close May 7 on a $7 million refinance of the Wichita Executive Centre at 125 N. Market, clearing equity to allow the repayment of almost $2 million in delinquent payments to contractors and real estate leasing agents.
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