George Laham’s development team received a nod from the Wichita City Council on Tuesday to build apartments, offices and retail along the west bank of the Arkansas River.
The 4-2 vote was immediately embroiled in controversy, with the losing developer and his supporters stalking out of council chambers and one council member questioning whether the vote followed city protocol.
River Vista, the $24 million project proposed by Laham and development partners Dave Burk, Dave Wells and Bill Warren, was chosen over The Riv, a $17 million plan offered by Wichita developer Steve Clark and his project partners. Clark’s team began work in January 2011 on its proposal; Laham’s group filed its proposal after the city sent out a request for other projects in March 2013.
Mayor Carl Brewer, who has been criticized by Americans for Prosperity for votes in support of longtime friend Wells, voted no, as did Vice Mayor Pete Meitzner. Council member Lavonta Williams left the discussion right before the vote because of a family emergency.
The decision allows city staff to authorize a development contract with Laham’s group and to negotiate a sale price for almost five acres at First and McLean. Laham’s group has offered $100,000 for the property, valued by the Sedgwick County appraiser at a little more than $600,000.
Clark strode to the lectern immediately after the vote to counter the city’s characterization of how it handled its request for proposals to develop the west-bank land. He had said earlier in the meeting that he believed his group had been selected by the city and was negotiating a development agreement with city officials.
In a four-page letter last week to City Manager Robert Layton, Clark complained that the city backed out of a commitment to his company as the site developer and compromised his site plan for the area. Layton has denied those allegations.
Scott Knebel, the city’s downtown revitalization manager, told the council that Clark’s group always knew it would have competition for the project and had multiple opportunities to modify its proposal before two changes it submitted last week.
“I take strong issue with Mr. Knebel’s characterization of how the RFP was communicated to us. That’s not the way it was communicated at all,” Clark said.
Although council members left the door open to negotiate with Clark’s group if a development agreement can’t be reached with the Laham group, Clark immediately and publicly withdrew his proposal.
Then he and his supporters left City Hall.
Wells and Warren, who attended the council meeting, declined comment.
Amy Liebau, the chief operating officer for Laham Development, said, “This is one of the first opportunities to build a multi-family project from the ground up in downtown Wichita, and we’re very excited about the opportunity.”
Council member Janet Miller, who moved to support River Vista’s selection, said the Laham project more closely adhered to Project Downtown, the city’s master plan for downtown redevelopment. She cited immediate public access, available boat and bike rental, a more urban design, higher private equity and the group’s willingness to buy the First and McLean property as key to her decision.
Council member Jeff Blubaugh was not allowed to offer a motion to delay the vote for 30 days to gather more information on the two proposals. Blubaugh’s idea to continue negotiating with both developers was assailed by council members as an affront to the city’s RFP process.
Meitzner questioned after the vote whether city protocol was followed by allowing Miller’s motion to proceed without an amendment from Blubaugh.
But City Attorney Gary Rebenstorf said during the meeting that the council chair, Brewer, has discretion to decide how to proceed.
According to city documents, Laham’s River Vista is requesting tax-increment financing for parking and infrastructure improvements, and also is seeking STAR, or sales tax revenue, bonds for riverbank improvements.
The River Vista’s project cost of $24.7 million includes $13 million in private debt financing, $6.45 million in private equity, $2.4 million in TIF proceeds and $2.5 million in STAR bonds.
Clark’s The Riv sought tax-increment financing for public infrastructure, including expansion of on-street public parking along McLean and on-site surface parking, utility relocation and site preparation. The Riv also proposed the use of STAR bonds to make riverbank improvements.
The Riv plan was estimated at $17.8 million, with $9.4 million in private debt financing, almost $4 million in private equity, almost $1.7 million in TIF proceeds and $1.94 million in STAR bonds. It asked the city for the five-acre project site, originally acquired by the city for $3.4 million, for free.
Clark and Laham have been critics in the past of the city’s willingness to invest public money in private projects. In September 2012 – after his group began seeking the First and McLean deal – Clark wrote an e-mail blaming the city’s policies for his decision to seek the incentives.