The long-delayed Exchange Place apartment project could get an infusion of money if the Wichita City Council approves on Tuesday.
The council will be asked to fatten the city’s tax-increment financing commitment to the $66 million project, adding another $3.9 million to the city’s $8.6 million commitment for a $12.5 million total TIF package.
TIF districts divert future taxes on a property to help pay for improvements. In this case, the TIF proceeds would fund:• A 273-car automated parking garage, $8.675 million.
• Acquisition of the project site, $3.825 million.
The additional TIF money is needed because rising interest rates created an almost $4 million funding gap in developer John McWilliams’ financing plan, according to city documents. The higher rates led to a smaller Housing and Urban Development loan for the project, according to city staff.
McWilliams’ Exchange Place plan includes 230 apartments in two vacant buildings and a new addition, and the construction of a 273-car automated parking structure.
City officials estimate that the increased tax revenue from the Exchange Place improvements would more than double the assessed value of the project, to $17.3 million.
The financing hurdle is the latest obstacle in a six-year effort to revitalize the deteriorating downtown building at Douglas and Market. The council first approved a TIF district to help finance the project in May 2007 for the original developers, Michael Elzufon and Dave Lundberg, also known as Real Development or the Minnesota Guys.
Their 2007 plan called for the construction of a multi-level parking garage and the conversion of the vacant building into 91 residential condos, residential parking and ground floor retail space.
McWilliams acquired the property in late 2012 from Elzufon and Lundberg, who were dealing with financial problems. The transaction, which included compensation to Real Development for its work lining up tax credits for Exchange Place, removed Elzufon and Lundberg from the pair’s most visible pending Wichita project. The group’s other main Wichita project, the Wichita Executive Centre at 125 N. Market, has been taken over by the Security National Insurance Co. of Salt Lake City, the primary creditor.