City Council sets April 10 public hearing for Southfork TIF

03/05/2012 5:00 AM

08/05/2014 11:09 PM

Jay Maxwell’s plan to develop a blighted area near the intersection of I-135 and 47th Street South is alive again after the Wichita City Council voted Tuesday to set an April 10 public hearing on project revisions.

The council voted 6-1, with Michael O’Donnell opposed, to move ahead with the second establishment of the Southfork Redevelopment District, to create tax-increment financing for a 72-acre mixed-use development in a blighted part of south Wichita. Maxwell plans retail, hotel, restaurants and office space on the initial 50 acres, along with a medical complex on the 22 acres west of the Riverside Drainage Canal.

The new redevelopment plan will raise all of the land in the district out of the 100-year floodplain and will cap available tax-increment funding at $16.5 million. That had been a subject of debate between the council and the Sedgwick County Commission..

Tax-increment financing, or TIF, captures future taxes in a district to subsidize current improvements. Costs covered by such financing in a redevelopment district include site preparation, land acquisition and infrastructure.

The district, approved in December by the city, was withdrawn Feb. 7 when the Sedgwick County Commission raised concerns about the land’s vulnerability to flooding and the lack of any cap on the amount of TIF money available to the project. Under state law governing TIF districts, the county commission and the Wichita school board hold veto power over the project if significant harm would be done to either.

The city-county disagreement led O’Donnell to criticize the project.

“I don’t think the community down there wants more government involvement,” O’Donnell said.

But council member James Clendenin disagreed.

“The passion there is for this project down in south Wichita,” he said. “People want this to happen in south Wichita and they like seeing the city’s investment.”

O’Donnell demanded that city staff tell him if the land elevation changes and the TIF cap would ensure approval from the county.

City Manager Bob Layton and Allen Bell, the city’s urban development director, made no predictions about the county’s reaction to the revisions.

But Bell said he believes the changes address the county’s concerns.

“I had recommended and stood behind our proposal,” he told the council. “I do believe that raising this property out of the floodplain is in the best interests of the project and the city as a whole.”

Bell said that the county commission’s request for a cap on the TIF revenues was premature.

“I am not as favorably disposed toward the capping,” he said. “That is an issue that the council is responsible for and will do as it passes the project plan. However, this is a viable and acceptable compromise.”

Council members and staff made no mention Tuesday of another significant discrepancy in the project’s financials that county commissioners discussed in December: The Eagle reported in December that the city estimates the project will net almost $2.1 million over 10 years without tax increment financing. With TIF, it would net about $8.4 million. However, developers estimate a net loss of $6.8 million without a TIF district and a net loss of $600,000 without the financing.

Maxwell also is the lead developer of the proposed Bowllagio entertainment complex at Maize Road and Kellogg, another project that originally sought $13 million in state sales tax and revenue, or STAR, bonds and a $75 million sales tax hike through a community improvement district to finance. The project has remained out of the news for about a year since dirt work began on the site, but developers say Bowllagio is not dead.

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