Nearly two years after purchasing the historic Union Station downtown, Gary Oborny’s real estate company on Thursday officially marked the start of a $54 million renovation and expansion on the century-old property.
The groundbreaking ceremony – symbolized by pulling the cord to a steam whistle and a dozen or so people dressed in period costumes – drew a crowd of about 150 people. It included brief remarks by officials from Oborny’s Occidental Management, downtown development and city officials, and future tenants of the 9.5 acre, four-building property.
At the event, Occidental president Chad Stafford announced four new tenants: Regus, Encompas, State Farm agent David Kemp, and the Mumbai Rail Indian Bistro.
They are in addition to previously disclosed tenants Wells Fargo commercial banking, Smoothie King and Scooter’s coffeehouse.
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“We look forward to bringing another successful amenity to downtown Wichita,” Stafford told the crowd outside the Union Station terminal.
Stafford also announced that the Law Co. would be the contractor for the two-phase project that could last up to 2 1/2 years. Spangenberg Phillips Tice is the project’s architect.
Construction work on the first phase is expected to begin before the end of the year, Stafford said.
Wichita City Council member Lavonta Williams said that she was excited for the project to begin.
“I’m thrilled because we are celebrating … the promise and future of what will be another downtown destination,” Williams said.
Jeff Fluhr, president of Wichita Downtown Development Corp., told the crowd that the Union Station project was key to continuing the momentum of downtown redevelopment. He said in previous discussions about Union Station, the sentiment among downtown redevelopment officials had been “if we can get this project done, downtown is on its way.”
“I can’t wait to see the lights on in this building, the activity at this building,” Fluhr said.
The first phase includes renovation of the Grand & Patrick Hotel, which sits at the easternmost portion of the property, as well as the Rock Island depot and Rock Island freight building. First-phase work also calls for the creation and improvement of public access areas such as the Union Station plaza, on the western portion of the property at 701 E. Douglas.
The second phase of the project calls for renovation of the 57,000-square-foot Union Station terminal and the 25,000-square-foot freight building connected to it, construction of two 35,000-square-foot buildings and a 471-space parking garage.
In all, Occidental Management is adding about 150,000 square feet of new buildings to the Union Station property.
As part of the project, Oborny requested that government officials establish a tax-increment financing district to repay $17.3 million of the total project cost over 20 years. TIF districts pledge future gains in property taxes – generally over 20 years – to help finance redevelopment projects that are expected to create the added property value.
Oborny will use the TIF on a “pay-as-you-go basis.” That means he won't be able to draw from the TIF until after improvements are made and the increased value of those improvements is reflected on the tax rolls.
The City Council and Sedgwick County Commission approved the TIF district in October.
Steven Liggett, senior vice president and regional manager for Wells Fargo Commercial Banking in Kansas City, said that his company will lease a little more than 6,000 square feet of space on the first floor of the Grand & Patrick Hotel. Patrick Ahern of NAI Martens assisted Occidental with the Wells lease.
Liggett said since Wells Fargo established a commercial banking operation in Wichita with local staff in early 2013, that office has doubled and needs extra space. The company has been leasing 3,200 square feet of space at Occidental Plaza at 301 N. Main since last year.
The move to Union Station is also a symbolic one.
“One of the biggest focuses I’ve had is getting our folks into bigger permanent office space,” he said. “It’s also the commitment we’re making to the Wichita community for the long term.”
Other tenants for the Grand building are Regus, which offers temporary offices, meeting rooms and other business services. Stafford said Regus will occupy nearly all of the second floor of the hotel, about 14,400 square feet.
Other Grand tenants on the first floor will include State Farm, with 2,700 square feet; office furniture company Encompas, with 3,200 square feet, and Scooter’s, with 1,550 square feet.
At the Rock Island Depot, which sits in the center of the property, restaurateur Neil Bahkta will put a Smoothie King on the north end of the first floor and Mumbai Rail in the remainder of the two-story building. On the first floor Mumbai will offer quick-serve food service, and on the second floor a traditional dining area.
“Outside of marriage, this is the most exciting thing I’ve done,” Bahkta said.
He said afterward that he expects to open Smoothie King in April, and the ground floor of Mumbai in June. He said it probably won’t be until late 2015 or early 2016 before Mumbai’s formal dining area opens.
A Cox Solutions store in the 1,800-square-foot “baggage building” immediately to the south of the depot will remain, Stafford said.
Oborny’s company purchased the Union Station property in 2013 from Cox Communications, which had occupied most of the Union Station terminal and freight buildings as well as the hotel until about 2007, when it moved to bigger offices at 901 George Washington Blvd. A sales price was not disclosed.