Wichita City Council approves $36.5 million in incentives for downtown education complex

The Wichita City Council issued $36.5 million in industrial revenue bonds Tuesday to support the new medical school in pharmacist-turned-developer Sudha Tokala’s downtown education complex.

The Kansas Health Science Center – Kansas College of Osteopathic Medicine opened this fall with 91 students enrolled in the school’s first doctor of osteopathy program class.

The bonds will support costs of the “acquisition, construction, renovation and equipping” of commercial facilities in the medical school.

The city signaled its willingness to issue IRBs in a 2019 development agreement with Tokala, but the bonds still had to be authorized by a City Council vote. Tuesday’s vote was unanimous.

IRBs include a potential sales tax exemption for construction materials, which could be particularly valuable to developers considering the inflated cost of building materials.

Tokala’s Douglas Market Development LLC has made about $36.5 million in capital investment on the education complex to date, according to city staff documents.

The city has approved millions of dollars in the form of IRBs, tax abatements and other incentives for the project. It also has added an extra sales tax on purchases within the project area and spent $1.3 million in tax increment financing that dedicates future property taxes to pay for the redevelopment of the Chester I. Lewis pocket park, which is being repurposed as an entry plaza for the private medical school.

The education complex will also include the WSU Tech culinary school, a 119-apartment student housing facility and a 119-room AC Marriott Hotel.

Last November, the City Council approved extensions for all three projects, as well as $10 million in industrial revenue bonds and a five-year 100% property tax abatement on the former Henry’s department store building that will house the culinary school.

The city’s updated development agreement called for the culinary school to be redeveloped by August 2022. Tokala told The Eagle that construction was completed on time and that the culinary school’s commercial and teaching kitchens are currently being outfitted with commercial cooking equipment.

As of September, WSU Tech’s culinary school students are still based in the Boston Recreation Center. WSU Tech spokesperson Andy McFayden said students are expected to move into the new building by January 2023.

The development agreement calls for the hotel to be completed by December 2022 and for the student housing facility to be completed by December 2023.

This story was originally published September 12, 2022 at 3:23 PM.