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Proposal for WaterWalk hotel draws opposition

A move the Wichita City Council will discuss today could lead to a complex combination of tax incentives for WaterWalk hotel developer Four-G LLC.

Before the plan advances, it will face opposition and questions.

A group of about 15 people criticized the incentives Monday at Mike's Steakhouse on South Broadway. Several plan to speak in front of the council this morning.

Their critique starts with the city's move years ago to lease riverfront land just east of the Arkansas River and north of Kellogg to WaterWalk developers at $1 a year.

And it strikes at every level of incentives the city may offer.

Today's vote doesn't approve any incentives — each tax break would have to be voted on separately later.

But the council will consider a letter of intent that says the city plans to give Four-G LLC up to $2.5 million in the guest tax the hotel generates, let the developers add a 2-cent sales tax to all hotel sales, make up to $12 million in building materials exempt from sales taxes and let the hotel use public parking at WaterWalk place.

"If you're a developer across the street, would you be willing to build without the same benefits?" asked John Todd, who has frequently criticized tax incentives.

Before, the city has let guest tax revenue flow back to the hotel where it was generated. But the additional sales tax would be Wichita's first use of a new financing tool.

Bob Weeks, who advocates for limited government on his blog, WichitaLiberty.org, has repeatedly criticized the city's tax breaks, saying they are unfair competition for other businesses that don't seek subsidies.

The city will conduct a study to make sure the proposed 130-room limited service hotel doesn't compete with the nearby city-owned Hyatt Regency Wichita, which is a full-service hotel.

If the proposed hotel is found to hurt the Hyatt, the deal will be called off.

"Now that their ox is about to be gored, they're concerned about it," Weeks said.

Weeks also noted that City Manager Robert Layton lives in a condo at WaterWalk Place. Weeks thinks that is a conflict of interest, since Layton's condo could increase in value if WaterWalk succeeds. Weeks also said it shows the manager is invested in the future of the project.

He noted that Layton was quoted in The Eagle and elsewhere saying the city wouldn't invest more taxpayer money in WaterWalk.

Layton said the incentives are significant, but necessary. "Without the city's assistance, this project wouldn't happen," he said.

Layton said his statement about the city spending no more money at WaterWalk was misinterpreted.

He said the city won't spend more on infrastructure, and that specific developments would be analyzed case by case to make sure they offer a return on investment for taxpayers and fit with the master plan.

Layton said he's offended anyone would suggest he would let his investment in a condo at WaterWalk Place sway his decisions on the job. He said he stayed out of discussions that would affect his condo.

John Stevens, who is active in city politics and is a member of the Wichita Park Board, said the city laid off parks workers because of budget problems but always seems to have money or incentives for businesses.

He listed all the incentives that the hotel may get.

"Where do we all sign up for this deal?" he asked.

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