City: No more funds for WaterWalk

Wichita city officials say they're eager to see entrepreneur Jack DeBoer's plans for WaterWalk, the embattled 7-year-old downtown development along the Arkansas River.

But they sent a message to DeBoer on Wednesday: There's no more money available to help kick-start a mixed-use project bogged down from the beginning, first by city funding issues and more recently by the lack of credit available for business deals.

Mayor Carl Brewer and City Manager Robert Layton say they'll meet with DeBoer soon to assess the future of the development.

But the $41 million invested by the city in infrastructure and a parking garage — debt the city will absorb if the development fails — is likely the end of the public money WaterWalk will receive.

"We don't have any other resources to put in," Layton said.

DeBoer's Consolidated Holdings announced late Tuesday night that it has purchased controlling interest in the project from partners Dave Burk, a downtown developer, and Dave Wells, president of Key Construction.

DeBoer originally was a minority financial partner in the project, and exercised no day-to-day influence in its operation.

In a news release, DeBoer said he intends to accelerate the pace of the development, looking for entertainment, office, hotel, residential and retail tenants.

Consolidated spokesman Doug Rupe, who will operate the development for DeBoer, said Burk and manager Tom Johnson will remain in an advisory role with the project "for a short period of time to help me get on my feet."

Rupe said Key Construction will continue its work on the current landscaping project. That landscaping joins WaterWalk Place — a large building containing condos, retail and office space — and parking at the site. Gander Mountain and the Wichita Area Association of Realtors building sit nearby.

Layton and Brewer said a meeting with DeBoer should take place later this month.

"I've been pretty public in expressing my concern about the amount of public money in this project for limited private return," Layton said.

"The fact that the project seemed to have stalled is my biggest concern. We're putting in another phase of improvements, yet there are no hard commitments for projects.

"We know they've been working on them, and we know that they're optimistic for 2010. And we have a contractual obligation to finish this phase."

Brewer said he applauds DeBoer's goal to put WaterWalk on the fast track.

"I can only look at the positives based on his track record," Brewer said.

"I'm very curious what Jack's plans are. This has all happened rather quickly, so I'm interested in finding out the entire story."

DeBoer, Johnson and Wells were unavailable for comment Wednesday. Johnson was in meetings at the WaterWalk office, according to a receptionist. Burk declined to speak about the deal on the record.

"With Jack's connections and contacts nationally, and now with him involved on a day-to-day basis in the project, we want to be ready when the retailers want to come back," Rupe said. "We will want to reconnect with the retailers that Tom and Dave talked to."

At the same time, Rupe said prices have been cut on the one- and two-bedroom condos in the 46-unit WaterWalk Place, which is a third full, Rupe said. Condos range from $200,000 to $700,000.

The timing of the management change — as Wichita's downtown redevelopment planning moves into high gear — is coincidental, Rupe said.

But he pledged to be an active participant in the redevelopment process with Goody Clancy, the city's downtown redevelopment consultant.

"We'll be listening to Goody Clancy and their ideas, and will give them a few of our own," Rupe said.

"We just have positive things to talk about and think about. There's been a lot of negative perception, but that's not going to help us get where we want."

Real estate analyst Stan Longhofer, who directs the Center for Real Estate at Wichita State University, said the change in WaterWalk leadership can help move the project along.

"In some ways, once you have a project that is struggling, something to shake up its image can help," he said. "It's not a statement there are things you're doing wrong, but a matter of needing a fresh perspective."

Longhofer said the project's problems largely have been outside its control. Several sources have told The Eagle that then-Wichita Mayor Carlos Mayans' decision to pull $3 million from the original project funding cost WaterWalk a Bass Pro Shops store, along with businesses that traditionally follow the outdoor retailer.

"In some ways, the city has done all they can to tank the project," Longhofer said. "I mean, if these are my friends, then who are my enemies?

"WaterWalk has been hit by a lot of challenges for a number of years, starting with the city. The city hamstrung that project from the beginning. And then when it started to move forward, the momentum was lost when you hit the difficult economy."

Longhofer said the city's latest challenge is to protect its investment in WaterWalk.

"You don't want to throw good money after bad, but you don't want to turn good money into bad by failing to nurture it," he said.

This story was originally published October 22, 2009 at 12:00 AM with the headline "City: No more funds for WaterWalk."