City Council OK of Century II oil project could doom River Vista development, some say
02/04/2014 12:12 PM
08/06/2014 8:39 AM
A choice looms before Wichita City Council members: downtown’s biggest residential project in years or a projected one-in-15 chance at $1 million in annual oil revenue from drilling under Century II.
There’s growing sentiment at City Hall that the council can’t have both. Sources close to the $24 million River Vista apartment project at First and McLean told The Eagle this week that they are opposed to any oil drilling next door and that a council decision to proceed with drilling would spell the end of the project.
At best, any council decision to put oil drilling equipment next to the 154-apartment River Vista site would cost the project at least one investor, they said.
And, some council members said, such a decision would cast doubt with prospective downtown developers about the city’s commitment to Project Downtown, the 20-year master plan for commercial and residential redevelopment that doesn’t include turning downtown into an oilfield.
There are “many, many questions left to be answered,” council member Janet Miller said.
Mayor Carl Brewer – who made downtown revitalization a priority when he won the job from Carlos Mayans seven years ago – is clear on the subject: Any oil drilling downtown is “opening a big can of worms.”
It’s an opinion that is gaining momentum at City Hall; there didn’t appear to be votes this week to pass a drilling proposal.
“Say we hit oil,” the mayor said. “These are guys making business decisions, and if you hit oil, how do you tell people who own property nearby that they can’t do what you just did? If there’s a way for people to make more money by drilling, why wouldn’t you?”
The council awarded the apartment project on Aug. 6 to River Vista, a development team headed by Bradley Fair developer George Laham, along with partners Dave Burk, Dave Wells of Key Construction and Bill Warren. The partners have declined consistently to talk about the project on the record.
At the same time, city officials have been sorting through a belated vetting process for Trek AEC, the only oil driller seeking a lease to drill for the Century II oil. The Eagle reported July 20, after its own vetting, that Wichita entrepreneur David Leben – who city officials said was at the forefront of the Trek AEC proposal – has had unpaid state taxes, loan defaults and debt recovery judgments in the past 10 years. Project partners said Leben was not a principal in the project, although Leben stands to get a financial stake if the drilling strikes oil.
Alan DeGood, the Trek official that drillers say is in charge of the Century II proposal, did not return a call Wednesday afternoon seeking comment for this story.
The oil drilling idea – fueled by the city’s tight budget situation – has drawn opposition from nearby Delano residents and from downtown revitalization proponents.
Several council members said this week that the drilling project is a long shot, both in terms of viability before the council and whether there is any oil under Century II. They have cited a study that offers a one-in-15 chance at $1 million in annual oil revenue from the drilling.
They floated the possibility that the city might withdraw its application for a conditional use permit to allow drilling; that application is now before the Metropolitan Area Planning Commission, and withdrawing it would effectively kill the project.
“One of the questions I’ve had all along is what will that operation look like?” Miller said. “What will it smell like? What will it sound like around all of the adjacent property owners?”
And then there’s the land use question, she said.
“Is this the highest and best use for what I’d consider a piece of prime development land?” Miller asked. “Is a concrete block building holding storage tanks with a retaining wall the best and highest use for prime land fronting McLean close to Douglas?
“And how would drilling impact the prime development land owned by private entities at the corner of McLean and Douglas? This is about the big picture, about more than just one project.”
Council member Jeff Longwell, a longtime proponent of oil drilling downtown, softened his stance this week.
“We’ve all heard that this is a bit of a gamble,” Longwell said. “We don’t even know at this point if there is truly oil there, and if there is, can we get to it?
“I think that as this sits right now, unless someone can prove that we won’t end up with an oil well sitting in the middle of downtown like Oklahoma City has as a monument to oil, this thing probably wouldn’t pass the council.”
Laham’s group landed the riverfront project after a controversy-filled council meeting in which a competing developer made allegations of city improprieties. Wichita developer Steve Clark contended that city officials had already committed the project to his team, The Riv, before a last-minute decision to seek proposals from other developers.
River Vista would include office and retail space along with a rental boat hub that could be used by Wichita Festivals and the Wichita State University rowing team.
Brewer invoked an old cliche to support his pro-downtown position on the proposals for apartments and drilling: A bird in the hand is worth two in the bush.
“One thing we do know is that downtown development is something we already have,” the mayor said. “The oil drilling is speculative. No one can be sure of anything with that.”