The Wichita City Council is starting to recognize the need to be choosy about community improvement districts, in which shoppers pay a higher sales tax to help cover developers’ costs. At least that was our hopeful interpretation of the narrow vote last week against a CID designation for the Eastgate shopping center, as well as the council’s decision to reexamine the city’s CID criteria in June. Today’s public hearing and council consideration on the proposed CID for Cabela’s also will be telling.
Eastgate doesn’t merit a CID. As a well-established shopping center at a prime location near the city’s fringes, and with the road construction at Kellogg and Rock finally over and the economy improving, Eastgate is positioned to thrive without a compelling need to finance improvements by charging shoppers a 1 percent higher sales tax for 22 years.
Cabela’s is different, making its CID request justifiable. While the project also is proposed for the city’s outskirts, at K-96 and Greenwich, it promises to be a regional attraction and local economic boon. The spending of people who travel to Wichita to check out the 80,000-square-foot outdoors store’s wildlife displays and sporting goods should broadly benefit the community beyond the walls of Cabela’s. So will the building of new ramps at the K-96 interchange, which are among improvements to be funded in part by the 1.2 percent higher sales-tax rate.
Other future CID proposals also might be worthy, especially if they serve the pressing need to strategically develop the city’s center and otherwise realize the downtown master plan. Under the best of all possible CID plans, those paying the higher sales-tax rate primarily would be convention visitors and other out-of-towners who wouldn’t be in Wichita at all if not for the CID development.
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Over the past year, the CID has been portrayed by some City Council members and other promoters as a benign way to help the economy and even a preferred economic development tool — because developers seek the designation and higher tax rate.
But it’s inaccurate to describe a CID as “self-taxing” developers and businesses. Residents pay the higher tax, and not necessarily with their full knowledge and consent (though a bill moving through the Legislature could mandate better disclosure).
If City Hall gave a CID to every shopping center or strip mall in Wichita that could use a face-lift, the local 7.3 percent sales-tax rate would end up being a rarity and a joke. Each new CID also limits the prospects of adjusting the local sales-tax rate to lower property taxes, an interesting idea city officials studied a few years ago.
Not all CIDs are evil, nor are they created equal. City leaders need to approve these site-specific sales-tax hikes only when and where necessary to serve a broad public good and dramatically move the economic development needle.