Wichita officials recommend giving prominent downtown developers Real Development far less financial help on their Exchange Place project than they're asking for.
It's unclear what that means for their three-building, $51.5 million residential project.
The developers had asked for a $2.2 million increase in financing — for a total of $11.6 million — to buy downtown property and cover other costs, using the increased property taxes generated by the project and surrounding properties.
That would help them increase the number of apartments in Exchange Place from 201 to 230.
It would also help finance a high-tech, $8.1 million parking garage and residential building just east of Exchange Place on Douglas. The project also includes apartments in the Bitting building at Douglas and Market.
Real Development has said that the City Council's decision on the increase is vital because it would seal the deal for a $30 million federal loan that would allow the company to increase its private Exchange Place investment to $40 million.
But the city staff recommendation would bring the tax increment financing from $9.3 million to $9.7 million — far shy of the request.
Assistant City Manager Cathy Holdeman said Friday that after internal conversations and talks with Goody Clancy, the consultant working on a long-term revitalization plan for downtown, the city could justify only a small increase.
Their consensus, according to city reports, is that the condo conversion could happen but that "there is no assurance that the condo conversion will actually occur in the future."
There are alternatives.
The city figures up to $2 million could be generated by a community improvement district.
In that case, the developers would add a 2 percent sales tax to the retail stores on the ground floor of the buildings and use that extra money to cover costs. Meanwhile, it could charge special assessments to tenants.
"There are still some unknowns if they're comfortable with that," Holdeman told several council members last week. "I think they'll probably work until the 11th hour."
City Council members have already approved $9.3 million in tax increment financing, but developers say they need more to secure the HUD loan. The increased funding would largely pay for parking, some of which would be public parking, seen by many as key to downtown's future.
The developers will continue investigating all options now that city officials are recommending only a small increase, said their spokeswoman, Beth King.
"In the big picture, Real Development needs to be able to make a commitment very quickly to get that loan," King said.
Real Development officials are still trying to determine if community improvement district funds would generate enough to fill their finance gap if the council approves only a small increase. And they're not sure whether federal officials would agree that the improvement district money would be seen the same as TIF revenue.
"Nothing is off the table at this point," King said.
The City Council will hear comments from the public and vote on the move at its 9 a.m. meeting Tuesday in City Hall.