City, county to decide on forgivable loan for Starwood Hotels call center
05/22/2013 12:26 PM
08/06/2014 1:43 AM
A $200,000 forgivable loan for a call center creating 900 jobs with an average annual salary of almost $24,000 goes before the Wichita City Council on Tuesday.
Sedgwick County commissioners will consider a similar loan on Wednesday. The state also has been asked for a loan; details on the amount were not included in city documents.
Starwood Hotels, a hotel and leisure company that owns brands such as Westin, Sheraton and Four Points, pledges to create 907 jobs over its first five years in the former Wichita Mall and Office This location at 4131 E. Harry.
Starwood pledges to create 532 full time jobs in its first year at an average per-hour wage of $11.45 minus overtime. That translates to an average wage of $23,816 and a total payroll of $12,670,112, according to city documents.
Over its first five years, Starwood pledges to grow full-time employment to 907 people at an average per-hour wage of $13.40 per hour minus overtime, an average wage of $27,872 and a total payroll of almost $25.3 million. Documents provided by the city included salary figures lower than those provided to The Eagle last week by the Greater Wichita Economic Development Coalition, which put together the incentive package.
Several council members endorsed the loan Friday, calling it a small price for diversifying the Wichita economy.
“It’s good news,” Mayor Carl Brewer said. “It’s an industry that isn’t even in the state of Kansas — hotel call and service — so to open the door for that brand is an additional opportunity for us.”
“If all the numbers add up, why wouldn’t we work to add jobs to Wichita,” council member Lavonta Williams said.
Vice Mayor Pete Meitzner agreed, calling the flexible-hour positions a “good addition to our economy for second incomes, for students, for second jobs.”
The city loan provides that one-fifth of the loan amount will be forgiven on the first payroll date of July each year, starting in 2014, if the job creation and wage commitments outlined by Starwood are met.
If the company falls short of those commitments, the amount to be forgiven will be reduced by a dollar figure equal to the percentage by which the actual jobs and/or wages created fall below the commitments. Any loan principal not forgiven will be due to the city at the end of the five-year loan term.
And if Starwood closes in Wichita during that time, the entire loan amount will be due plus 12 percent interest.
Council member Jeff Longwell said those clawback provisions are strong enough to earn his vote.
“We have in place measures where if the jobs don’t materialize, we’re protected,” Longwell said. “And at the end of the day, the only way we can improve our economy is to grow like this. We can’t tax people more. We can’t trim enough. The best way to grow the economy is to diversify.”
The city’s loan money will be paid from budgeted monies in the city’s economic development fund for business incentives.