City hopes for better result after failed College Hill development

The development group behind Uptown Landing will go before the Wichita City Council on Tuesday seeking approval for a more-than-$25 million apartment/retail/office project in College Hill.

The council will consider signing a letter of intent for the project, which includes 176 apartment units and between 15,000 and 18,000 square feet of retail, according to the city.

The project would sit on 4.5 acres near Victor and Rutan, a block northeast of Douglas and Hillside. The site is divided by a street.

The apartments will include high-end finishes, a first-level parking garage within the structure and rooftop gathering spaces for tenants, according to the city.

The apartment construction will begin in June, followed by the commercial building on Douglas and Rutan by March 1, 2019. The entire project must be completed by March 1, 2020.

Developer Mike Brand has refused to comment until the contract is voted on.

It’s the city’s second try at a project on the site.

The site was part of the failed Parkstone at College Hill project, on which the city of Wichita spent $7 million to acquire and grade the land, improve streets, install water and sewer lines, and build a small park.

The city created a tax increment financing district around the project so that increased property tax on the site would repay the city’s outlay.

Mike Loveland, the original developer, did eventually build about 10 townhomes on the north end of the site, but they opened in 2009 during the middle of the housing crash and there was little appetite for them. The townhomes went into foreclosure and are now owned by a private owner who is trying to market them.

On the rest of the site, the 4.5 acres, the city continued to work with Loveland for years to develop it, but when Loveland’s financing fell through in early 2016, the city pulled the plug on the project.

During those six or seven years, Loveland had accumulated $400,000 in back taxes. The city wrote off that money and solicited proposals by other developers.

However, the city could still recoup some of its original investment over the longer run if the new project is built.

But the city won’t make a killing on the sale of the land. According to the city, the 4.5 acres will be sold to the developers for $300,000, about $1.50 per square foot. Tom Johnson, president of the Martens Cos., said that developers who build multifamily units typically spend $1.50 to $3 per square foot for their land.

The city land may be a bargain, but that’s not unexpected, Johnson said. Redevelopment on such a site can be difficult and too small to be economically feasible under normal circumstances.

“If you look at the catalyst projects, yeah, they’re low when you look at market price,” he said. “They’re unique sites, and the price will represent some of the risk associated with developing them.”

This story was originally published December 12, 2016 at 6:21 PM with the headline "City hopes for better result after failed College Hill development."