Exchange Place to seek TIF boost
03/18/2010 12:00 AM
03/18/2010 7:16 AM
Real Development will take a request for more tax increment financing for their Exchange Place project before the Wichita City Council on Tuesday.
Developers Michael Elzufon and Dave Lundberg will ask the council to set an April 13 public hearing on their request to use an additional $2.2 million from the Center City South Redevelopment District TIF.
It could be a tough sell, with one council member saying Wednesday that he's done with the special development financing tool without iron-clad protections for city taxpayers.
If the council says no, the three-building, $51.5 million residential project is dead, Elzufon said.
"I'd hate to hear that," council member Jeff Longwell said, "because if that's the case, I don't think he's going to get a lot of support here."
Real Development's request is a significant bump in the private and public funding for the original TIF, approved in December 2008, that called for almost $9.3 million in public investment in a $27.8 million plan.
TIF districts capture the increase in property taxes generated by new development to pay for land acquisition, demolition and public improvements.
Much of the proposed TIF increase would fund the new bells and whistles for a high-tech, $8.1 million parking garage and residential building just east of Exchange on Douglas. The project also includes apartments in the Bitting building and Exchange Place at Douglas and Market.
The high-tech garage would be an opportunity to use European parking automation technology to create 298 parking spaces — half open to the public — for about $14,000 per space, about half the original projected cost, Elzufon said.
"This is urban infill," Elzufon said. "You cannot engineer a regular parking facility in this space and produce enough parking to do well for us and well for downtown."
When complete, the project would include 230 residential units, the new automated parking garage and several retail shops, including a planned urban grocery concept on the first floor of Exchange Place.
The council's verdict on the TIF amendment is critical to the plan, since the larger price tag requires Elzufon and Lundberg to up their $18.5 million personal equity to $40 million, or about 78 percent of the new project cost, Elzufon said.
That equity would come from a $30 million HUD loan on Exchange Place.
The lender, Gershman Mortgage of St. Louis, has to submit a firm application to HUD by May 14, requiring the city to commit to the extra TIF funds by April 28, Elzufon said.
Longwell said the Exchange Place project has value to the downtown revitalization efforts.
"I like the project," he said. "But I have to make sure that the numbers match up, both in what staff is saying it would generate and what the developers think.
"The bottom line is that we're not going to put the public on the hook any more. Period."
Elzufon said he acknowledges the political pressure council members face on TIF districts, given the poor performance of some.
"My timing on this sucks, frankly," he said.
Nonetheless, Real Development stands prepared to honor a shortfall coverage provision in the original TIF agreement that protects the city, he said.
The Exchange Place project is a for-sale lifestyle development that would include 63 studio apartments, 122 one-bedroom units and 45 two-bedroom apartments between Exchange, Bitting and the new Douglas parking structure.
Initial rents would range from $726 for the studios to $921 for the one-bedrooms and $1,580 for the two-bedrooms.
But the rents are a hook, Elzufon said, designed to entice residents to buy, at prices between $99,000 and $225,000, generally below the upscale condo price points throughout downtown. Payments would be similar to the monthly rents.
There would be a wide range of amenities in the Exchange complex, including a rooftop resort, clubhouse and client lounge, dry cleaning and housekeeping services, a game room, and an on-site pet park with a full pet washing and grooming facility.
The plan's centerpiece, though, is the parking garage designed by Boomerang Automated Systems of Logan, Utah.
The structure would be unlike anything in Wichita. Users would park in one of six entrance bays. Their cars would be removed by automated lift valet-style to assigned parking stalls, then mechanically retrieved at the swipe of an electronic key.
In addition, the automated system can remove cars for car washes and oil changes, services included in the structure plan.
If the City Council signs off on the TIF increase and the HUD loan closes next month, 18 months of construction would begin in August, Elzufon said.
Residents would begin moving in in the spring of 2011, about the time the parking garage opens.
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