Sales tax increase would fund more development near Kellogg and West

A plan to raise sales taxes in a targeted area by $5.5 million to help build new businesses northwest of Kellogg and West Street took a step forward at the Wichita City Council meeting Tuesday.

The proposal, by developers Christian Ablah and Brad Seville, will return to the council Nov. 7 for a public hearing and vote.

The plan would add more property to an existing Community Improvement District. That would generate more tax money to help pay for the developers’ plans to rebuild blighted areas formerly occupied by a Kmart, Bishop’s Family Dining, the Rowdy Beaver Restaurant and Tavern and other businesses.

Within the district, consumers pay an extra 1 percent in sales tax when they buy goods and taxable services. The bulk of the money goes to reimburse the developers for the costs of buying the land and building new businesses at the site.

Mayor Jeff Longwell said it’s important to redevelop Kellogg and West because it’s a “front door” to the city, “especially people coming from the airport to downtown.”

“They see that really blighted piece of property there as you come into the city,” he said. “So this will go a long ways to help renovate and revive that area.”

“Anything we can do to figure out how we can encourage development and improve blighted situations all over the city is going to benefit everyone,” Longwell said.

The expanded district is irregularly shaped to take in just the developers’ property.

The southern boundary is the Kellogg access road from slightly east of West Street to just west of Florence. The farthest northern boundary is Taft, behind the Kmart building. The intersection of Taft and West Street is also included in case there’s a future need to make improvements for traffic flow to serve the planned development, officials said.

Kellogg and West was once one of the city’s premiere commercial districts, but the last 20 years have not been kind to it.

The once-thriving Towne West Shopping Center area, which drew customers to the nearby Kellogg-West corridors, is in decline because of changing consumer habits and local commerce shifting northwest to the growing suburbs.

Sears Corp. closed its large department store at Towne West and closed the nearby Kmart, as well.

Bishop’s, once a popular cafeteria-style buffet, closed after a nearby I-235 freeway project closed ramps at Kellogg, limiting access to the restaurant.

“Certainly it’s been challenging to get in and get out, because you haven’t had access off Maple and 235, and you still won’t,” even after the freeway project, Longwell said. “But with some of the improvements (from the improvement district) I think access will be a little better.”

The original improvement district, approved in 2015, was planned to generate $8.3 million, about half the cost of a planned $16.6 million in new development. That original district includes the abandoned Kmart and the site where the Rowdy Beaver used to be.

The developers have purchased more property in the area and now want to expand the tax district to fund improvements across a larger site, including the defunct Bishop’s buffet and the current site of an NTB tire shop.

If the council approves the expansion, the tax district is forecast to generate $13.8 million toward a total project cost of $23.8 million. Almost all that money will go to subsidizing the private sector development, with $350,000 set aside for public improvements.

The increased sales tax in the district is expected to last for up to 22 years, according to city staff.

In exchange, the developers are committed to building or rehabilitating 60,000 square feet of business space at the site of the former Kmart, plus an additional 18,000 square feet of commercial space along the Kellogg frontage road, according to a city report.

Those improvements will have to be done in five years. The Community Improvement District tax income is on a “pay-as-you-go basis” and will reimburse the developers’ costs over time as additional sales tax comes in from the businesses in the rehabilitated commercial area, officials said.

This story was originally published October 17, 2017 at 1:57 PM with the headline "Sales tax increase would fund more development near Kellogg and West."