A $90 million plan to convert key pieces of downtown real estate into a movie studio could go before the Wichita City Council as early as this month.
The plan, which would be funded by industrial revenue bonds and tax breaks, would utilize all or part of Cox Communications' Union Station campus and the old Spaghetti Works building to make movies in Kansas. Both buildings are near Intrust Bank Arena.
That's property that's been targeted by city officials and downtown redevelopers for retail and commercial development.
But the studio's chances of luring feature-length films to Wichita are hurt, movie industry observers say, by Kansas' refusal to match the substantial financial incentives that other states offer Hollywood to film there.
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Wichita City Manager Robert Layton said Wednesday that he's sticking to his position on Union Station: The property is key to downtown's redevelopment and is well-suited for mixed-use office and retail development.
But Layton said the city's downtown redevelopment consultant, Boston-based Goody Clancy, doesn't think the studio is incompatible with a broader plan to redevelop downtown.
"I do have a traditionalist's view, and that's mixed-use," Layton said. "That makes great sense in building the neighborhood.
"But if you have a unique economic development opportunity, including a tourism piece, well, I can't tell you right now if that's good or bad."
Layton said city staff is reviewing the studio proposal, which also includes a request to abate taxes on any improvements at the site. The Wichita City Council would have to vote on a tax abatement.
City staff also is vetting developers and equity partners in the project, the city manager said.
"Until we get all the answers and we're comfortable moving forward, I can't tell you when this will go on the agenda," Layton said.
The developers hope to get a vote as soon as Nov. 14.
The Spaghetti Works building asking price is $3.25 million; price tag for Union Station is $6.4 million.
The studio project is the brainchild of California businessman Jackson Hill, who confirmed the plan on Wednesday.
Hill said the studio would bring more than 1,000 jobs to downtown Wichita over the first year. But he was hesitant to discuss the plan in detail, beyond confirming that no property has been purchased.
"We're in critical negotiations across the board with everything," he said. "I don't want to derail it all."
Former Wichita Mayor Bob Knight said he's helping Hill with the proposal, but declined this week to elaborate.
Same with Wichita investment banker Theron Froggate, who confirmed that he's involved in the project but referred all questions to Hill.
Cox vice president Jay Allbaugh reiterated the company's desire on Union Station to make a "good deal for Cox and be a good steward of a significant piece of the community's property."
Allbaugh wouldn't elaborate on Hill's proposal, but said Cox real estate officials are "visiting with a number of interested parties" in the Union Station complex.
"There's still significant interest in the building," he said. "It's a simple, straightforward business transaction."
There are significant obstacles to filming movies in Kansas, according to local industry observers.
The biggest is Kansas' inability to compete with other movie-hungry states on tax incentives, essential to luring major productions to the state, said Peter Jasso, director of the Kansas Film Commission in Topeka.
"In the current climate of the industry, the issue of tax incentives is certainly a large determinant on where a film of significant size would choose to locate," he said.
"Some states offer upwards of 40 percent rebates on what's spent in the state. Some have rebates for salaries for local hires. It's another form of economic development recruitment."
Instead, Kansas' nonrefundable and nontransferable tax credit has been suspended until at least 2011 for budgetary concerns, Jasso said.
Hill downplayed the incentives issue.
"We've got that all worked out, and it won't be tough to bring films here," he said. "Quite the opposite."
Jasso said the success of any downtown Wichita movie studio will depend on the type of productions it courts.
"If their business plan is predicated on trying to get small productions or the things we do well, like TV re-enactment for the History Channel and A&E or commercial work, if it's creative and geared toward that kind of production, that would be workable," he said.
"If they're looking for major studio films, they'd have to show or demonstrate that the economics would work out.... Can you offer the same kinds of savings as other states?"