February 28, 2012

Voters turn down Ambassador Hotel bed tax

Wichita voters gave a resounding no Tuesday to a plan to give $2.25 million in bed tax money to developers of a downtown boutique hotel.

Wichita voters gave a resounding no Tuesday to a plan to give $2.25 million in bed tax money to developers of a downtown boutique hotel.

The measure failed 61 to 38 percent, or 16,198 to 10,107.

Paul Coury, the developer of the 177-bed Ambassador Hotel at Douglas and Broadway, said he was disappointed but determined to get “a great hotel project for downtown Wichita on line.”

“… The council approved this project and we thought we had this thing done,” Coury said. “The people have voted.

“But, we’re going to open the Ambassador Hotel and it will be a wonderful asset to the city. We’ll evaluate where we need to cut, make smart cuts and hopefully it will be nothing visible to the guests at the hotel.”

Susan Estes, a field director for Americans For Prosperity, the group that organized the petition drive to put the issue up for a vote, said, “The people have spoken.

“The difference was people pulling together,” she said of the Vote No side. “Hundreds of people worked hard to get the message out. We didn’t have a big budget.”

Estes noted that more people voted in this election than in last spring’s mayoral election, when 24,845 cast ballots. Tuesday, 26,457 – or 1,612 more – ballots were reported cast.

Turnout was slightly less than predicted, with about 13.5 percent of registered voters going to the polls.

High stakes in vote

Both sides said the stakes were high: Hotel supporters had said the scope of the hotel would have to be reduced and potential downtown redevelopers could be scared off. Vote No supporters said the project has more than enough city incentives to succeed without diverting money from the city’s tourism and Century II maintenance efforts.

About 50 members of the vote-no group, called Tax Fairness for All Wichitans, gathered at Mead’s Corner at 430 E. Douglas and cheered the news that they had won. Backers said the group spent about $30,000 to fight the guest tax proposal, claiming that the allocation by the Wichita City Council puts city government in the position of picking winners and losers.

Backers of the vote-yes group spent about $300,000 on a television, radio and Internet campaign, seeking to let developers of the hotel retain 75 percent of the guest tax revenue it generates in its first 15 years of operation.

John Todd, an activist for AFP, said the grassroots effort made the difference.

"The credit really goes to those people," he said. "We had dozens of people knocking on doors, putting up signs, making calls."

On the vote, Todd said, "I think the citizens are waking up. They’re tired of giving away incentives to developers – not only for downtown but all over town."

The vote totals came as a surprise to some of the vote-yes group, which gathered at Oeno Wine Bar in Old Town Square. Consultants said they were sure the yes side had 55 percent of the vote after a phone survey of advance voters.

Mayor Carl Brewer, watching the votes come in, simply said, “Wow.”

City Council members James Clendenin and Pete Meitzner said the council must continue to press ahead with economic development.

“I really think we need to continue to make what we feel are wise decisions with the public’s money, and that means using the most appropriate tools at our disposal,” Clendenin said.

“Personally, I want us to help grow the economy,” Meitzner said. “If it’s grown by private interests only, that’s awesome. If it’s grown with a combination of private and public assistance, that’s awesome. I’m for growing the economy the best way we can.”

Future of incentives

The mounting vote totals produced some disagreement in the crowd at Oeno: City officials were resolute that they would continue to use economic development tools to redevelop downtown. But some said the guest tax should be discarded as a development incentive so future projects could avoid the uncertainty of political challenges.

"Before, we didn’t know how the community felt about this particular incentive. Now, we do," said Jeff Fluhr, president of the Wichita Downtown Development Corp. "Future developers can proceed accordingly."

Fluhr said downtown proponents will continue chasing prospects with Tuesday’s vote in mind.

"It won’t slow down development at all," he said. "We know what we have."

Council member Jeff Longwell, who supported the incentive, bemoaned the public debate that surrounded the vote.

"What about truth in advertising?" he asked. "As recently as yesterday, there was a radio ad asking people if they wanted their tax dollars to go to police, fire or schools or to greedy taxpayers. No matter how you spin it, that’s not the truth."

Clendenin agreed.

“It disappointed me, because that stuff’s not true,” he said.

The guest tax revenue was about 10 percent of the funding for the proposed $22.5 million, 117-room boutique hotel at the corner of Douglas and Broadway, a project that is under construction and about 15 percent complete. Since the City Council had to amend a charter ordinance to allocate the funding to the Ambassador, the move was subject to a protest petition and Tuesday’s vote.

Clendenin said the vote isn’t a setback for downtown redevelopment.

“We will move forward again and do what we think is in the best interest of the city,” he said. “We have to show leadership here and do what we think is best.”

Michael O’Donnell, the only council member to vote against the subsidy in September, said he was not surprised by the margin.

“The real winners of this election are the Wichita taxpayers,” he said. “I believe this sends a strong message to my council that the days of corporate welfare and crony capitalism at City Hall are numbered.”

Petition question

Earlier at the vote-yes party, hotel partners Dave Burk and Dave Wells talked about how Sedgwick County Election Commissioner Tabitha Lehman had signed the petition that brought the issue to a vote.

Lehman acknowledged that she signed the petition in August, before she was named election commissioner in November by Secretary of State Kris Kobach.

“It was before I had even been offered the job,” she said. “I’ve taken an oath to uphold the law, and I’m doing that no matter what my personal preferences are.”

She said county officials checked with the state and were told there wasn’t a conflict of interest. Sedgwick County Manager William Buchanan said he didn’t have a problem with Lehman signing the petition.

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