Real Estate News

Report: Nearly $120 million spent on downtown Wichita renovation last year

The Flats 324 at 324 N. Emporia are apartments in a former Wichita high school.
The Flats 324 at 324 N. Emporia are apartments in a former Wichita high school. File photo

Downtown redevelopment had an especially good year in 2015, according to a new State of Downtown Report from the Wichita Downtown Development Corp.

According to Tuesday’s report, nearly $120 million was spent downtown last year, with $95 million coming from private sources while government spent $24 million.

Much of that money went to converting older buildings into apartments. As of last year, there were 724 units under construction or in planning.

Those conversions have had a two-pronged secondary benefit: Not only do they fuel potential growth in retail and restaurants to serve those new inhabitants, but they take hundreds of thousands of square feet of antiquated office space off the market.

According to the report, 56 development projects of all sorts have been completed since 2010, valued at more than $450 million. Another 12 projects are underway, and 13 more are in the planning stages.

The result? A subtle change in atmosphere with more traffic and walkers on Douglas, particularly after 5 p.m. There are more lunch choices for the workers and more reasons to be downtown on the weekends.

Steve Klepacki has run an office furniture and design business, now called Contract Furnishings, downtown since the early 1980s. He has seen the departure of the old downtown, when the last of the department stores fled in the mid- and late ’80s. When local leaders pushed to spend time and money to revitalize Old Town, he said he was pretty skeptical.

“I thought they were crazy,” Klepacki said. “I didn’t think there was enough here.”

Today, he can walk next door to Bite Me BBQ, 132 N. St. Francis, for lunch. There are more and younger people strolling by his store. This part of St. Francis is now a two-way street, and the parking spaces are often filled. Vacant spaces in nearby buildings don’t stay vacant very long.

“Downtown has really changed for the better,” he said.

Why so good?

The large amount of investment in 2015 is wonderful but may not be repeated in 2016, said Jeff Fluhr, president of the Greater Wichita Partnership and the Wichita Downtown Development Corp.

Spending on a relatively few projects has bounced around quite a bit. In 2014, public and private spending in the downtown was $24 million, while in 2013 it was $66 million.

Some of the projects are very large, such as the $66 million conversion of Exchange Place and the Bitting Building into the Douglas apartments, and the $38 million River Vista development. What year the investment number falls into depends partly on when a developer buys a property or gets a building permit.

“It truly reflects things such as when is a building permit pulled,” Fluhr said. “A lot has to happen between acquisition and the start of construction that isn’t reflected in the numbers.”

But Fluhr said that with economic development it’s important to look at an average over several years.

2015 trends

A couple of big, related trends jump out of Tuesday’s data.

First, the majority of the downtown projects since 2010 are related to building apartments.

Developers built 524 units between 2010 and 2015. Another 724 units are expected to open up as projects slated for 2016 and 2017 are completed.

That will only increase: A 2014 study of the downtown residential market indicates that downtown can absorb another 1,750 units over the next five to seven years.

According to the report, the 2,000 or so people living downtown are young — a median age of 32 — and overwhelmingly single, male, white, well paid and well educated.

The second big trend is more subtle: the disappearance of much of downtown’s obsolete office space.

According to the report, which cites J.P. Weigand & Sons’ real estate forecast, the amount of Class C space – which is the oldest, least modernized office space – is down to 15 percent of all downtown office space.

Some new office space has opened, such as the CorTen Building and 520Commerce, but that was top quality space and was absorbed.

Opportunities are clearly there for the coming years in residential, in office and even, Fluhr said, in hotel space.

As a result, he said, more outside investors are looking at Wichita because of the revival of downtown.

“The thing we are seeing now, it’s not that we haven’t seen investors looking in from the outside before — we have,” Fluhr said. “But we have a noticeable number of groups that are looking at Wichita and saying, ‘What’s the investment opportunity?’ 

Dan Voorhis: 316-268-6577, @danvoorhis

Projects under construction in 2015

The Douglas

$66 million

River Vista

$38.4 million

Sedgwick County offices renovation

$15.7 million

Parking at Market & William

$9.7 million

Flats 324

$7 million

Pinnacle Lofts and Apartments

$6 million

125 N. Market office building

$5 million

520Commerce

$3 million

Intrust Bank renovation

$2.5 million

Mosley Streetscape

$1.6 million

High Touch Technologies

$1 million

Orpheum Theatre, phase 1

$500,000

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