Business

City likely to deny aid for Union Station plan

City staff will recommend against issuing $90 million in industrial revenue bonds to turn Union Station into a movie studio, Wichita City Manager Robert Layton said.

The move effectively kills any city involvement in the proposal, but Wichitan Jackson Hill III, the studio group's founder, said Wednesday he will continue pursuing a partnership with the city.

Layton said the city's vetting process revealed "too many things to proceed."

Layton did not elaborate on the staff's recommendation.

Checks of city and court records show that Hill has filed bankruptcy in the past and has several judgments pending against him.

Hill said he will continue pursuing a partnership with the city by bringing investors to town to prove the group's financial capability.

"The city's been great," said Hill, founder and sole owner of Union Station Studios LLC, a company he incorporated in Kansas in June.

"I can understand all their concerns, and we have been digesting all the issues and we'll get them resolved."

In a pre-qualification questionnaire that Hill submitted to the city, obtained this week by The Eagle, the developer reported a pending $5,000 judgment against him by Bank of America.

Hill also reported a 1997 drug diversion that was successfully completed in California, a discharged Chapter 11 reorganization bankruptcy in California stemming from a divorce, and two tax liens from 1976 through 1980 in California totaling $29,500.

A check of court documents show other financial issues from Hill's past that weren't reported to the city.

Sedgwick County District Court records show that Hill has two other outstanding civil judgments totaling almost $2,500 over the last five years, to a medical practice and Floyd Thomas.

U.S. Bankruptcy Court, Central District of California, public records show a 1992 Chapter 7 liquidation bankruptcy filed by Jackson Hill III, then living in Marina Del Rey, Calif.

The same bankruptcy court also lists three dismissed Chapter 13 bankruptcies — bankruptcies with a court-approved repayment plan — released in September 1996, April 1997 and November 1997 under the name Jackson Hill 3, then living in Los Angeles.

On Wednesday afternoon, Hill downplayed the significance of the background information he provided the city. He declined to answer further questions on his background during a telephone interview with The Eagle, saying, "I'm not going to talk about things I don't know."

"We have been talking in regards to those issues," he said. "I've got investors ready to come to town. It's really insignificant. We all make mistakes."

Hill's group wants to buy the old Cox Communications headquarters, asking price $6.4 million, and nearby property like the Spaghetti Works building, asking price $3.25 million.

It sought a letter of intent from the city to issue $90 million in bonds and a commitment to abate taxes on any improvements at the site, requests that have been under review by the city's urban development office for about a month.

The business plan was to recruit films and other cinematic productions to downtown Wichita, Hill told The Eagle earlier this fall.

He said that the studio would bring 1,000 jobs downtown, amending the figure to thousands in the Wednesday interview.

The IRB request isn't likely to make it to the City Council, council member Jeff Longwell said in an e-mail.

"I do not think anybody wants to bring this forward just to vote no," he said.

But Hill, a longtime California businessman, told The Eagle Wednesday afternoon he plans to continue working with the city.

"I just heard about this today so I haven't had a chance to digest it," he said Wednesday. "I look forward to continuing to work with the city. This project is too big and too major to let it fail now."

Former Wichita mayor Bob Knight, who told The Eagle earlier this month he was helping Hill, said he wasn't surprised by the city's decision.

"These projects require an extraordinary amount of capital to proceed, so I'm assuming that through the city's due diligence process, he failed to meet that threshold," Knight said.

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