Developers are seeking the city of Wichita’s help to convert the Commerce Plaza building downtown into a Hilton hotel, which they hope to open by the time March Madness comes to Intrust Bank Arena in 2018.
Mike Ladiwalla and Raju Sheth are proposing to build a Hilton Garden Inn on the southeast corner of Douglas and Topeka.
Their company, Mid Continent Hospitality, already operates the Springhill Suites in Wichita, the Holiday Inn Express and Fairfield Inn in Hutchinson, and other Kansas properties.
In their downtown Wichita proposal, they plan to convert the existing office building to hotel and retail use. They also plan to eliminate a current on-site parking lot to add on more rooms.
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Hotel parking would be via a skywalk to an existing garage that served the Finney State Office Building.
The hotel is planned for 120 to 130 guest rooms with meeting space, a restaurant and a rooftop bar. The first floor of the project would be set aside for retail shops.
The project is expected to create between 75 and 100 jobs, Sheth said.
Sheth and Ladiwalla said they want to open the hotel in time for the 2018 NCAA basketball tournament. The nearby Intrust Bank Arena has been selected as the regional site for first-round games and is expected to attract substantial tourism business to downtown.
On Tuesday, the developers asked the city to create a community improvement district to help with the development process as part of a package of city approvals.
That would add 1.5 cents per dollar to the sales tax on purchases at the hotel and the retail stores for 10 years to generate a maximum of $930,000 for eligible project costs, according to a city report.
The total development cost of the project is estimated at $14.2 million.
In addition to the improvement district, the developers also seek an industrial revenue bond that would exempt them from paying sales taxes on the building materials that go into the renovation and construction.
They aren’t seeking any property tax exemptions and Sheth said they expect to pay about $250,000 a year.
While the city has generally looked favorably on incentives for downtown hotel development in the past, Mayor Jeff Longwell signaled those days could be coming to an end.
“I’m not very supportive of these kinds of incentives in today’s environment,” Longwell said. “Seven years ago, I was all in, but I think the climate has changed.”
The council didn’t discuss the plan in detail, but set a Sept. 6 public hearing on the proposed district, development agreement, parking agreement and revenue bond.