Wichita approves letter of support for downtown hotel project

08/09/2011 12:00 AM

08/05/2014 5:04 PM

A proposed downtown boutique hotel at Douglas and Broadway cleared its first governmental hurdle Tuesday when the Wichita City Council approved a nonbinding letter of intent to support the project.

The 6-1 vote came after more than an hour of public dissent, and a debate that included allegations that campaign finance played a role in the council's decision. Council member Michael O'Donnell voted against the letter.

The $29.2 million redevelopment plan for the old Union National Bank building includes $7.71 million from the city for a 282-space parking garage and an urban park.

The hotel project, valued at $21.6 million, will use a variety of city incentives, including tax increment financing, general obligation bonds, guest tax revenue and a 2 percent community improvement district charge on hotel purchases that will be returned to developers for 22 years, at an estimated $60,000 a year.

The building was the site of one of the first student-sponsored civil rights sit-ins in the country at the Dockum Rexall Drugstore.

The meeting became contentious when O'Donnell questioned plans to award the $6 million city-financed parking garage to Key Construction without taking bids. Key president Dave Wells is one of the project's partners.

City Attorney Gary Rebensdorf said that a two-thirds council vote can award the garage project without a bid.

O'Donnell directly linked Mayor Carl Brewer and his fellow council members to Key through campaign contributions, a statement that drew the ire of Brewer, Vice Mayor Lavonta Williams and council member Janet Miller.

Brewer dismissed O'Donnell's claim as "grandstanding."

"Unless you can prove someone is doing something illegal, you shouldn't say it...," he said. "It doesn't take a rocket scientist to figure that out."

O'Donnell subsequently apologized "for the way the statement came out."

The Ambassador project is the first proposal to the council under Project Downtown, the city's downtown redevelopment master plan, and the city's new requirements for public investment downtown.

The hotel proposal has been recommended for approval by the city's downtown project review panel, which oversees public incentives for downtown projects.

The plan calls for the redevelopment of the 14-story building into a 117-room boutique hotel, to be called the Ambassador Wichita. Included will be a 144-seat restaurant and 5,500 square feet of banquet and convention space.

The parking garage will include 8,500 square feet of retail space and parking spaces dedicated to public downtown activity.

City officials said Tuesday that discussions are under way for the possible redevelopment of the Henry's building near Broadway and William.

Developers for the hotel project include Old Town developer Dave Burk, Wells and Paul Coury, a Tulsa-based developer of Ambassador-branded boutique hotels.

The letter of intent — a nonbinding expression of support for the project — was requested by the developers so they can exercise an option next week to purchase the Douglas Place building and begin construction to help qualify for historic tax credits. No city commitment will be final until a Sept. 13 public hearing to discuss the tax increment financing.

The proposal was criticized by opponents of city incentives for public redevelopment projects.

O'Donnell criticized a line in the planning staff report indicating that the council intends to adopt the project after the Sept. 13 public hearing.

Much of the public's criticism was directed at the letter of intent request coming before the council prior to a public hearing — although the public debate over the letter of intent exceeded an hour.

"Why is this project on such a fast track?" asked John Todd, one of the speakers. "I am not opposed to the Douglas Place project. I would encourage developers to build it with their own funds. I am concerned with the public financing they're asking for. It appears to me this is a great deal for the developers."

Wichita restaurateur Craig Gabel accused Burk of "coming to the hog trough" and alleged that the downtown development's restaurants were forcing other Wichita restaurants out of business.

Council member James Clendenin disagreed, citing several restaurants within a few miles of downtown that he said are prospering.

"I've heard that a couple of times, and you need to pick another one," Clendenin said. "There are businesses flourishing within a close area to the development in downtown Wichita."

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