Council OKs $1-a-year lease for apartment complex property
08/22/2012 6:04 AM
08/22/2012 6:04 AM
The Wichita City Council has approved a $1-a-year lease for 4.4 acres of city property for developers of the WaterWalk to build an apartment complex.
The council also authorized city staff to issue proposals for a floating stage for the project’s long-planned outdoor entertainment amphitheater.
WaterWalk owner Jack DeBoer wants to develop 134 apartments on land near the southwest corner of Maple and McLean, next to the Wichita Ice Center.
Urban Development Director Allen Bell said the land was originally purchased for a parking lot to serve retail development that never got off the ground. It’s not needed for parking anymore, Bell said.
“More likely it would simply remain dirt,” Bell said.
Under the agreement, the city will lease the land to WaterWalk for $1 a year for 93 years. In exchange, WaterWalk will develop an $8.5 to $9 million apartment complex that will go on the property tax rolls.
The contract also has a clause that would give the city 25 percent of the profit from the apartments if the profit exceeds 20 percent, however, Bell said the city doesn’t expect to get any money from that.
The apartment building will have one-, two- and three-bedroom units expected to rent for $650 to $1,200.
During the meeting, representatives from the free-market-oriented group Americans for Prosperity argued that it’s a bad deal for the city.
John Todd, a real estate agent, pointed out that the city had paid $919,000 for the land and that the developers have listed it for sale at more than $1.1 million.
He suggested that the city should renegotiate the existing development rights with WaterWalk or sell the property.
“The assembly of the tract of land from 22 parcels into one has already added tremendous value to the property and that value is all the incentive that the city needs in order to market the property,” Todd said.
Bell said WaterWalk had listed the property with a real estate company to “test the waters” to see if anyone was interested in buying the development rights on the property. “Their asking price is I’m sure on the high side,” he said.
Bell’s department used the county’s tax appraisal, $479,000, as his estimate of the “opportunity cost” to the city.
In addition to approving the agreement for the apartment project, the council also authorized its staff to issue a request for proposals for a floating stage.
The WaterWalk agreement has always included a requirement for the city to build an outdoor amphitheater as part of the project’s public improvements.
However, the site of the proposed amphitheater has been moved several times as the project has evolved, Bell said.
The current amphitheater site will be between the Gander Mountain store and the Wichita Boathouse on the east side of the river, Bell said.
The city has a $247,500 grant from the federal Department of Housing and Urban Development to pay part of the amphitheater development cost. But that grant has to be spent by September of next year or the city will lose it, Bell said.
City officials decided to buy a floating stage because there’s not enough time to build a permanent stage before the grant availability expires, Bell said.
The vote on the changes to the WaterWalk plan was 6-1 with council member Michael O’Donnell dissenting.