City OKs tax incentives for south Wichita development

12/06/2011 5:00 AM

08/05/2014 6:49 PM

A south Wichita commercial development that City Council members and nearby residents called a “game-changer” got a boost Tuesday when the council voted 6-1 to establish a redevelopment district at 47th Street South and I-135.

Council member Michael O’Donnell voted in opposition to the project, after a lengthy sparring session between council members and supporters of a free-market group upset by the district proposal. Representatives from the group appear frequently at the council to oppose public incentives for private development.

“You guys have made me proud to be representing District 3 today,” said James Clendenin, south Wichita’s representative on the council, to a significant group of project supporters in the audience. “The citizens have spoken on this case.”

The 50-acre, 1million-square-foot project will include retail, restaurants, hotels, health care and office space. It will be named Southfork.

With the approval Tuesday of a tax increment financing district for the development, allowing new tax revenue generated by the project to be used for some development costs, the city will now have to agree on a three-stage development plan for the project. Coming up is a request for approval of a community improvement district, including a 1-cent sales tax for 22 years that will generate revenue for project development, including construction.

Several south Wichita residents said Southfork will be a huge boost to economic development in their neighborhoods.

“It’s just very doubtful that we’d ever get an upscale shopping center without tax incentives,” said Connie Klassen, president of the South Area Neighborhood Association. “People drive to Derby now to shop despite higher taxes and the cost of gas. So it’s a smart move to keep the tax revenue in Wichita by allowing us an upscale shopping center.”

“It’s kind of a no-brainer,” said Joshua Blick of Wichita. “A lot (of development) goes east and west. Now is the time to put words into action.”

The project is the first under-bolstered city financial guarantees for TIF districts, relying instead on special assessments and developer guarantees, said Allen Bell, the city’s director of urban development.

“It will be secured by the developer’s obligation to pay the special assessments and by a tax lien placed on the property,” Bell said. Should the developers default, the property becomes collateral against the city’s TIF expenditures and can be sold at a sheriff’s sale, Bell said.

In addition, developer Jay Maxwell’s team will personally guarantee the special assessments and provide the city with a letter of credit, Bell said.

“So, the risk is covered by the tax obligations, the letter of credit and the developer’s personal guarantee,” Bell said.

The project drew fire from opponents of public incentives for private development.

Bob Weeks, publisher of the website Voice for Liberty in Wichita, called the TIF district “turning over tax revenue to private enterprise ... redirecting taxes from the public treasury to one person.”

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