January 4, 2012

Sedgwick County denies incentives for Southfork project

It’s “highly probable” that developer Jay Maxwell will come back to Sedgwick County for a second chance after commissioners voted Wednesday against incentives for his $153 million Southfork project, Maxwell’s representative said.

It’s “highly probable” that developer Jay Maxwell will come back to Sedgwick County for a second chance after commissioners voted Wednesday against incentives for his $153 million Southfork project, Maxwell’s representative said.

Commissioners voted 3-2 against a tax increment financing district Maxwell had sought, saying it would have an adverse effect on the county. The Wichita City Council last month had approved the TIF district for the project at 47th Street South and I-135.

Commissioners Tim Norton and Jim Skelton voted for it, and commissioners Karl Peterjohn, Richard Ranzau and Dave Unruh voted against it.

Norton, whose commission district includes the area, didn’t hide his disappointment at the vote.

“We can do it everywhere else, but we can’t do it in south Wichita,” Norton said of such incentives.

Going into the meeting, Unruh, who usually votes with Norton and Skelton, was the swing vote. He said numbers supplied by the developer and the city had convinced him that the project could succeed without a TIF district. Such financing allows new tax revenue generated by the project to be used for development costs.

Unruh also expressed concern about the project — a 50-acre mix of retail, restaurants, hotels, health care and office space — being in a floodplain, which is how it qualified as blight for TIF consideration under state law.

Ranzau told Maxwell “basically what you’re wanting to do is use public funding to increase profitability.”

Later in the meeting, Ranzau and City Council member James Clendenin tossed barbs back and forth, with Clendenin eventually saying he didn’t want to get into a philosophical argument about public financing of private projects. Clendenin said business owners in the area had told him they were looking forward to increased traffic flow from the project.

But Myron Ackerman, who identified himself as a self-employed independent contractor, said, “I don’t pay taxes to support my competitors. You damage my business when you take my money to help my competitor.”

Norton noted that “not everyone who has spoken against this project lives in that area, shops in that area, wants the best for that area. If we can’t do something as a community, that whole corridor we’re going to have a rotted strip throughout the whole county.”

He later said he had worked toward such a project since he was mayor of Haysville before joining the commission in 2001.

“There’s been a lot of citizen and business input all along from that area down south,” Norton said.

Skelton, who recently spoke before his former colleagues on the City Council in favor of the project, said he expected Maxwell to resubmit a plan to the city and county.

“I’m very thankful that Jay is patient enough to do that,” he said. “To see it fall apart is just a huge letdown. We’ll see what happens. But we intend to go again at this.”

He said discrepancies in numbers from the city, county and developer likely hampered the project.

“I’d like to see everyone working together a little sooner as soon as this is developed,” Skelton said.

Tim Austin, the project engineer for Maxwell, cautioned commissioners not to assume that the project could go forward without a TIF district because of assumptions the city would approve a community improvement district as well, which does not require the county’s OK.

“That is not the approach I would take,” Austin said.

A community improvement district would allow a 1-cent sales tax for 22 years to generate revenue for project development, including construction.

A memo from county staff to commissioners said that without a TIF district, the project would generate $10.7 million in net earnings after 15 years. With a TIF district, it would net $22.4 million after 15 years. But without a TIF district and community improvement district, it would lose $1.1 million over 15 years.

Staff also noted that even with drainage improvements, 45 to 47 of the 50 acres would remain in a flood zone.

But proponents said the project would create jobs and money from sales taxes.

Connie Klassen, president of the South Area Neighborhood Association, told commissioners that “if you vote ‘no’ today, it will be a great loss to the people of South City.”

Austin said it was likely that Maxwell would make some changes and ask for a second look at a TIF district.

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