Wichita City Manager Robert Layton said it is clear that downtown developer Dave Burk got a property tax refund on a city-owned building without the city's consent.
Now, he says, officials need to examine how it happened and prevent any repeats.
Layton, who was out of town last week when The Eagle published stories about the refunds, said it remains unclear if the city has any way to reverse the refunds.
"We're reviewing all of our legal options," he said.
Burk, who was also out of town last week, declined to comment until he meets with city officials to discuss the situation.
The city-owned retail space attached to the parking garage at 301 N. Mead houses restaurants and shops and is leased by Cinema Old Town LLC, a partnership involving Burk, theater owner Bill Warren, real estate agent Steven Barrett, Key Construction and seven others.
City officials said last week that reductions in property tax income from appeals on the city-owned building and two others have depleted funds needed to pay back debt the city took on to help build the Cinema Plaza through a process called tax increment financing.
The city is now about $190,000 short of what it needs to pay off debts and has to cover the difference with general tax money.
Cinema Old Town LLC got a $51,374 refund on the retail space located in front of the city-owned parking garage.
The Warren Theatre Grille at 353 N. Mead and the Southeast Building at 300 N. Mead, which houses an Old Chicago restaurant, also got refunds.
Layton said he plans to request a meeting with Sedgwick County officials to see if the city could be notified whenever there are property tax appeals in special tax districts.
"We'd be willing to do that," Sedgwick County Appraiser Mike Borchard said. "If we can help, we will. But it's not going to have an impact on our decisions."
Appraisers don't treat property in special tax districts any differently than other properties, Borchard said.