Wichita, your downtown may be cooler than you think.
Just ask Jay Olshonsky, president of NAI Global.
It seems as if it would be difficult for Wichita or its downtown to make an impression on the head of one of the largest networks of commercial real estate firms in the world, who himself lives in New York City.
Still, Olshonsky came to Wichita in January to celebrate the company’s new affiliation with Wichita’s NAI Martens, and he left wowed by the city.
Olshonsky said the Fairfield Inn & Suites at the WaterWalk, where he stayed, was one of the nicest Fairfield Inns he has been in, and dinner at the new Ambassador Hotel left him similarly impressed.
“That hotel is very New York City,” Olshonsky said. “The decor, color, ambiance, rooms. … It really had a New York City flair to it.”
The Ambassador is part of $100 million in downtown projects, including the much-lauded new downtown YMCA, completed in 2012.
“Certainly, 2012 is a benchmark year for downtown,” said Jeff Fluhr, president of the Wichita Downtown Development Corp.
With about $112 million in projects that are under construction or will soon begin, Fluhr said, 2013 looks promising, too.
“We have a very strong start to have another great year in our downtown’s development.”
The big news is Occidental Management’s purchase and planned mixed-use redevelopment of the Union Station campus, which has been mostly empty since Cox Communications moved its Wichita headquarters from there in 2007.
There’s also the new $9 million Kansas Leadership Center and the Kansas Health Foundation Conference Center at Douglas and Topeka, which is the first new building to be built in the core of Douglas in almost 40 years.
Other projects include the approximately $9 million WaterWalk apartments on the west bank of the Arkansas River, $1.3 million in streetscape improvements coming to Douglas Avenue and potentially a $60 million redevelopment of the Exchange Place and Bitting buildings.
Fluhr said there’s another $100 million in projects that are in discussion. That doesn’t mean they’ll all happen, he said, but “it’s an indicator.”
“The next couple of years are going to be very dynamic.”
Downtown is still in a period of transition, however. It’s coming out of the same troubled economy that has afflicted all parts of the country in the past few years, and it’s still emerging from a much longer period of exodus from the city’s core.
“Downtown’s still a challenging market for (retail) real estate, but it’s improving quickly,” said Jerry Jones, a broker with Slawson Cos. “And I am bullish on it.”
He points to “just what’s happening on this block,” referring to what’s known as Block One, which is anchored by the Ambassador and the leadership center along Douglas and a couple of properties Slawson Cos. is redeveloping to the south.
That includes plans to convert the former Henry’s department store behind the Ambassador into a 40,000-square-foot mixed-use center. Jones said the building is able to support a few more stories if there proves to be a residential need. To the east, there’s a parking garage with 8,500 square feet for retail and restaurant use.
Block One “really kind of bridges Old Town with the western part,” Jones said of downtown. “It’s an important bridge.”
Patrick Ahern, a broker with NAI Martens, said there are only a handful of available Class A office spaces left downtown that are more than 10,000 square feet.
“Meaning that Class A is pretty well filled up,” he said.
“The other thing, which I’ve not seen in 10 years, is the increase in the asking price of Class A space in downtown,” Ahern said. “It was stagnant for, I’d say, 12 years.”
Some real and perceived problems with downtown are now almost nonexistent, Ahern said.
For instance, some of the buildings that were in flux with Real Development, the Minnesota developers who bought several downtown properties years ago, have been sold to others.
“The situation with the Minnesota Guys, which has been a question for a long time, seems to be shaking itself out,” Ahern said.
He also said there’s not a parking problem downtown, contrary to what some people perceive.
“We have a walking problem. I think we have people who don’t want to walk more than a block to get to their car.”
One situation that’s gotten more attention is violence in Old Town, but Ahern said it’s overblown.
“It’s a very isolated problem,” he said. “Not only is it isolated to Old Town, it’s almost isolated to one or two establishments.”
Home sweet downtown
As crucial as commercial and office development is to downtown, there’s something that might matter even more.
“The main thing that’s really going to change things is the residential coming online,” Jones said.
There are about 3,000 people who live downtown. In 2012, 160 residential units came on the market.
Among them were the Renfro apartments, which developers Robert Eyster and Michael Ramsey converted from the former Victoria Park Apartments, and the lofts Dave Burk built at the former Player Piano building on East Douglas, across from Union Station.
There are five residential projects under construction this year, with 506 new units, 230 of which will be ready in 2013.
That includes Eyster’s and Ramsey’s $21 million Lux mixed-use project at the former Protection One building at First and Market and the almost $6 million renovation of the Commodore apartments at Broadway and Elm.
“You’re going to have more people in downtown after 5:30, and what that means to me is that there’s a better chance that we’re going to be able to keep retailers open after 5 o’clock, and the people that are downtown are going to feel safer,” Ahern said.
“It’s not just the rehabilitation of buildings,” Fluhr said. “Now you’re starting to see new construction in the residential market.”
Adjacent to its Garvey Center, where apartments are 100 percent leased, Builders Inc. is building a 36-unit complex at First and Waco called Corner 365.
“The private sector is heavily engaged,” Fluhr said of residential and other development.
He said it’s the city’s responsibility to help foster that development.
“How do we help the private investor (and) developer be able to see their project through fruition?” Fluhr said. “It’s how do we take away those things that have been challenges for development?”
He’s working with others in the real estate community on an effort to document where ground leases are downtown. Buildings often may be for sale but the property they’re on isn’t.
Quality urban design
In 2010, the Wichita City Council adopted a master plan for downtown called Project Downtown, which Fluhr describes as a fluid working plan for future development.
“It’s providing clear criteria for quality urban design,” he said. “It’s enhancing the predictability of how projects will complement each other.”
It’s also working, Fluhr said.
“We’ve seen really quite (a) remarkable amount of investment.”
Ahern said there are big and small bright spots to point to all over downtown, such as Pixius Communications moving its headquarters to Second and St. Francis, across from where the new downtown urban park is.
“That’s private money going into fix(ing) up a building that was really stagnant for years,” Ahern said.
Although a gas station may not seem like much of a reason to cheer, Ahern said the new model of QuikTrip coming to the Kellogg and Broadway area is significant.
“Even the QuikTrip … is going to be an improvement.”
It’s all part of what he calls the “huge strides” downtown is making.
“We’re heading in a really good direction, I believe,” Fluhr said.
“As we continue to market this downtown, and we do it every day … there is a very positive response,” he said. “We’re atypical to a lot of cities out there right now.”
Need proof? Keep an eye on the skyline, Fluhr said.
“If a person were to leave today and come back in two years, the skyline of this city is going to be dramatically different,” he said. “There’s such progress under way.”