City may require signs warning of extra sales tax in special districts

If developers want the city to let them charge extra sales tax and use it to help fund their business, they’ll have to alert their customers in a clear way, such as a sign on the front door or an itemized line on their receipt.

That’s the upshot of the city council’s informal discussion about community improvement districts in city hall today. The city has been grappling with rules for the districts since it penned a policy about five months ago.

The districts are a new economic development tool approved last year by state lawmakers. The districts let developers add up to 2 percent sales tax on purchases inside the district for up to 22 years. The taxes flow to the state, through the city and back to the developers to pay for private or public improvements, including some business operating costs.

Wichita created a policy that is stricter than what the state law allows. It will only allow creation of a district if every property owner agrees to it and signs a petition. And it will allow only pay-as-you go financing, which means the city doesn’t give the developer money up front — only as the sales taxes flow in.

Already, the city has approved such tax districts for several future developments, including a hotel at WaterWalk, a massive bowling and retail development at Kellogg and Maize, a retail development at Central and Oliver and a grocery store in Planeview. (more…)