City Council votes down downtown development project

A project that could have transformed a building in the heart of downtown has stalled after members of the Wichita City Council voted against a proposal Tuesday.

A group had proposed to renovate the Finney State Office Building for offices, classrooms and laboratory space in an attempt to bring new higher-education groups to Wichita.

“I think it’s still got a good use,” Mayor Jeff Longwell said about the Finney Building. “I just wasn’t willing to spend $3 million to pay a developer to build that use. We typically don’t do that.”

Under the proposal, the building at 130 S. Market and 230 E. William would have been sold to Ferguson Property Group of Memphis, Tenn., for $100,000. The Wichita Public Building Commission, an advisory board with authority over the building, would have committed up to $1 million for building improvements, while the city would have invested up to $2 million. There would also have been sales tax exemptions and a facade improvement loan.

The $2 million from the city would have been reimbursed over time.

Longwell said he will encourage the City Council and the Public Building Commission to solicit other bids.

The council voted 4-3 against the Ferguson proposal, with Janet Miller, Pete Meitzner and Lavonta Williams supporting the proposal.

Council members discussed how some had heard from another developer, something Miller said made her “uncomfortable” and altered how people viewed the Ferguson proposal.

Glenn Ferguson, the developer, said he was surprised by the direction the meeting took. He knew there was some unhappiness on the council with the incentives, but he didn’t know about the competing proposal.

“There appears that there was information that hasn’t been shared with us,” Ferguson said. “We remain very interested. We are not going away. We are hoping for a very transparent process next time.”

Ferguson said he came to Wichita to buy a building in Old Town for redevelopment and was approached by city staff members about the Finney State Office Building, which was originally the Innes department store and then a Macy’s. The idea for the education consortium came originally from city staff members, but Ferguson liked it.

In addition to classrooms and offices, plans for the building included retail and restaurants on the main floor, student housing on Floors 6 and 7 and a seven-story atrium.

Ferguson said city staff told him they wanted the building to be a project that changed the downtown, rather than simply more apartments. To attract a collection of colleges and universities to lease space, without a large anchor tenant, Ferguson said he would have to offer below-market rent, at least at first. To justify putting $25 million into the building, he said, he needs financial incentives to cut his risk.

He said he first asked the city to waive property taxes – the building wasn’t on the property tax roles as a state office building, either. When the city said that was unacceptable, he asked for a $2 million city grant, up to $1 million from the Wichita Public Building Fund, a $1.5 million loan to renovate the facade, plus revenue bonds to waive sales tax on the construction supplies.

While no universities had committed to the building, which Ferguson said was due to the fact that he didn’t yet have a contract with the city, he said places like Pittsburg State University, Missouri Southern State University, Northeastern State University and more had expressed interest in “very informal” conversations.

Members of the Public Building Commission told the City Council that the proposal should be accepted or the building should be demolished, something the mayor said he would discourage. The commission currently has a bid for demolition at about $1.2 million.

“We think it might be worth more as a green field for future development than sitting there as an empty, obsolete building,” said Charlie Claycomb, chairman of the commission.

Claycomb said the commission previously voted to spend one month seeking bids for demolishing the building or seeing whether there is a buyer. The vote could be changed, he said.

This story was originally published April 11, 2017 at 3:38 PM with the headline "City Council votes down downtown development project."