Private investment has outpaced public investment in downtown Wichita by more than 6 to 1 since a plan for downtown revitalization was unveiled in 2010, according to numbers released Thursday by city officials.
Private investment downtown totals $194,012,200 since 2010, according to sales and valuation data from the city of Wichita and Sedgwick County. Public investment is $30,631,921, a ratio of approximately $6.30 in private investment for every dollar spent by the city on public infrastructure.
The investment numbers, contained in the 2012 Downtown Economic Report released Thursday by the Wichita Downtown Development Corp., included $564.8 million in private investment and $396.8 million in public investment dating back to 2003. None of the figures include the $190 million spent by Sedgwick County to buy land and build Intrust Bank Arena downtown.
“What we have here is our report card,” said Gary Schmitt of Intrust Bank, who chairs the WDDC executive committee. “And we’ve done very well. We are getting the private investment that we’re seeking.”
Bigger projects on the downtown revitalization resume include the Cargill Innovation Center, the parking garage and urban park near the Ambassador Hotel and the Kansas Leadership Center facility on Douglas.
The level of public investment is short of the city’s goal of $10 in private dollars for every dollar of public investment. But City Manager Robert Layton said the figures represent success as Wichita emerges from the recession.
“I’ve been really excited by the amount of private investment, especially over the last two years, coming in the grips of the recession,” Layton said. “It’s wonderful we’re able to ratchet down the public investment and watch private investments take off.
“We’ve made some strategic investments early on at the public level,” he said, that created an impetus for private development.
Downtown revitalization consultant David Dixon of Goody Clancy in Boston said Wichita’s performance is slightly better than many core areas, where a 4 to 1 ratio is considered “pretty good.”
“Ratios like these are always going to be worse in the early years and then get better as valuations come up and more projects can move ahead,” he said. “Given this soon after the plan, and after the initial investments in housing and businesses, the ratio is really pretty good. A lot of cities which are further along than Wichita with their downtowns would look quite seriously at a 6.3 to 1 deal.”
The detailed report comes almost four months after a February showdown before the council, with then-member Paul Gray questioning a report by city downtown coordinator Scott Knebel that private investment outpaced public investment downtown by 9 to 1.
Gray called those numbers “skewed,” and said they included some public incentives like TIF, CID and tax credits in the total presented as private investment.
City Council member Jeff Longwell acknowledged the discrepancy but said that if “routine” infrastructure projects like sidewalks, sewer and water — “things people generally accept that we do on a routine basis” — were factored into the downtown numbers, the investment ratio would be closer to 9 to 1.
Wichita Mayor Carl Brewer called the figures proof that private downtown development is gaining momentum.
“I can’t think of a person who would walk away from that return on their money,” Brewer said. “Any time you can get a return like that on public money, it’s something that’s positive.”
The public investment numbers include data from the city’s capital improvements program, facade program and HOME program investment money and Community Development Block Grant funds, and are confined to public infrastructure except in cases like community improvement districts, where revenue from additional sales taxes goes to the developer. The city’s facade program also provides loans for the renewal of building fronts.
Private investment figures came from Sedgwick County property sales data, city and county building permits and the city/county inspection office.
Layton credited Project Downtown, the master plan for downtown redevelopment by project consultants Goody Clancy, for changing downtown’s development environment.
“I think that one of the best things the mayor and council did early on was adopt that plan,” he said. “It set the framework for public investment and said we’d invest only in infrastructure, a better-defined investment strategy. People have responded well to that.”