June 17, 2013

Businessmen seeking tenants to help revive, share bills at Sutton Place

It takes about $10,000 a month to cover the heat, electricity and water bills at Sutton Place, an 11-story downtown office building at William and Market.

It takes about $10,000 a month to cover the heat, electricity and water bills at Sutton Place, an 11-story downtown office building at William and Market.

Two businessmen who operate on just three floors now split the bill.

The other eight floors are owned by Sutton MN, a company associated with Minnesota-based developers Michael Elzufon and David Lundberg, who bought more than a dozen downtown buildings in the past decade before running into financial problems.

Elzufon and Lundberg legally broke the floors of the building into separate properties for individual ownership. The problems with such an arrangement occur when some owners don’t pay their share of common expenses, such as utilities.

The eight floors owned by Sutton MN also owe about $100,000 in unpaid taxes going back to 2009, according to the Sedgwick County treasurer’s office.

The two businessmen picking up the tab for utilities see the troubled building as a potential big moneymaker, assuming events work their way.

Abdul Arif is a lawyer and entrepreneur who has renovated the first floor into a law office, and he also helped bring in a restaurant and the nonprofit Mayflower Clinic.

Jeremiah Connelly runs a couple of technology businesses, Wichita Data Centers and Kansas Hosting, out of the third and fifth floors.

The state has offices on the fourth floor but will be leaving soon, Arif said.

The potential is huge, he said. All the building needs is more tenants. Some of the floors are nearly rentable now, while others require a lot more work.

“There are no quick payoffs, but the upside is there,” Arif said.

Arif and several partners are already putting in a drug-testing laboratory on the first floor next to the clinic. A new state mandate requiring drug testing for some welfare recipients – the laboratory is across the street from the Department of Social Services Regional Office – will likely guarantee strong demand for the business. The lab’s profits will be used to support the Mayflower Clinic, Arif said.

He has big plans to further expand the clinic by buying another floor, either directly or out of tax foreclosure soon.

Connelly said he is eager to find more tenants to spread the cost of operating the building. He said he has spaces of 1,500 and 1,800 square feet on the fifth floor as well as space on the third floor.

The key to reviving Sutton Place, Arif said, is reopening the parking deck across the street. The garage was declared unsafe and closed by the city of Wichita last year. It’s now in foreclosure.

Allen Bell, the city’s director of Urban Development, said the city owns the land beneath the 650-space garage.

The city’s intent, he said, is to take back the garage through foreclosure and renovate it. He said the cost is estimated at between $7 million and $9 million, but only with adequate parking is redevelopment of the area possible, he said.

“As part of the downtown master plan, the city has taken a much more hands-on approach in providing parking facilities in the downtown area,” he said.

Related content



Editor's Choice Videos