Errors may mean Southfork project must go before City Council again

Another economic development project appears headed for a do-over before the Wichita City Council.

According to an e-mail obtained by The Eagle, Sedgwick County Clerk Kelly Arnold has found two errors in the Southfork tax increment financing district in south Wichita: One where it extends into the Haysville school district and another where it expands past the Wichita city limits into Riverside Township.

Arnold writes in the e-mail that he “doesn’t believe” the city can establish a TIF district outside its city limits, and he’s not clear if the Haysville district was legally notified about the establishment of the district. Arnold also says no plan for the district has been filed with his office and he has limited additional information about the TIF district.

It’s the latest bump in developer Jay Maxwell’s controversial 72-acre project near I-135 and 47th Street South, which will receive nearly $9.9 million in tax increment financing. TIF money is an economic development tool that captures taxes generated by new development to pay for the costs of public infrastructure and other improvements.

Southfork barely cleared the Sedgwick County Commission in May on its second attempt before the county, receiving a 3-2 approval vote amidst concern whether the project actually needed public funding.

It passed the Wichita City Council, by a 6-1 vote, in April with District 3 council member James Clendenin saying the project will provide sorely needed quality retail and office space in a blighted part of his district.

On Monday, Clendenin said he was blindsided by the Arnold e-mail and was gathering information on the mistakes, apparently by the city’s urban development office. Arnold’s e-mail was sent to Allen Bell at the city’s urban development office. Vice Mayor Janet Miller also said she was unaware of the issues with the Southfork TIF.

“Right now, it looks like we may just have to take it on again after the lines are redrawn,” Clendenin said Monday.

City Hall was closed Monday to celebrate Martin Luther King Jr.’s birthday. Bell could not be reached for comment.

Clendenin said City Manager Robert Layton was unaware of the e-mail. In addition, Wichita engineer Tim Austin, who represents Maxwell’s projects before the council, “had no idea, either,” the council member said.

It’s the third economic development problem confronted by the city in recent months.

In May, Cabela’s officials had to issue sales tax refunds for extra taxes charged in the first 12 days of their Wichita operation, when city officials neglected to notify the state in time that it had created a special sales tax district to spur the store’s development.

A month later, a STAR bond district at K-96 and Greenwich had to be expanded after the project’s signature $65 million athletic complex was omitted.

Maxwell’s development projects are no stranger to controversy, either. His Bowllagio project, a $96 million bowling-themed entertainment center at Maize and Kellogg, was killed in December when the county commission voted 5-0 against a TIF district there, again after City Council approval. Several bowling center proprietors opposed Bowllagio, claiming the city incentives were an unfair advantage in competition against them.

The Bowllagio district would have cleared the way for tax increment financing to help pay for about $6 million in flood and drainage improvements on the development property.

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