Downtown Wichita's largest residential developments in decades lurched ahead Tuesday with the City Council's final approval of an extra $1 million in public financing.
Though the condo development's prospects were in question just a week ago, a $900,000 influx of private money proved enough to convince council members that the deal, though risky, is worth the public taxpayer investment. That investment is expected to be recouped by increased property tax payments over the next 20 years.
Council members voted 5-2 — the same as last week's vote — to approve the increase in tax increment financing to $10.3 million. That money is expected to secure a $30 million federally backed loan.
Council members Jim Skelton and Paul Gray opposed the deal. They have called it too risky in previous discussions.
Real Development's project, at Douglas and Market, promises 230 apartments with rooftop lounge areas, around 64 nighttime and 100 daytime public parking spaces, and a ground-level retail strip that includes a small grocery store.
The apartments are expected to become condos in about five years, and the city's cash flow projections require that transition to go swiftly. The ambitious project is seen as a landmark development in Mayor Carl Brewer's campaign to revitalize downtown.
But it was fraught with serious questions. After city urban development officials recommended only a modest increase in city financing earlier this month, council members called for a third-party analysis. The resulting report, by Wichita State University's Stan Longhofer, showed that the city's projections were aggressive to begin with and that adding more city financing could be a major risk, consider the existing market for small condos downtown.
But Real Development — also known as the Minnesota Guys — rallied their supporters, promised to pay off debts and agreed to personally guarantee that the taxpayer funding is repaid by property taxes generated from their new project. That support seemed to outweigh opposition from advocates of limited government, who say tax increment financing simply transfers wealth from one part of the community to politically favored ones.
The Minnesota Guys cut one level out of the high-tech, automated parking ramp to reduce costs by $414,000. That eliminates 25 spaces, and when developers reallocated tenant and public parking, it led to a reduction from 103 public parking spaces to 64. But Real Development partner Michael Elzufon has said that at least 100 spaces will be open to the public during the day, when many apartment tenants are gone. Pat Ayars, who has been working with Real Development, said Tuesday that there should be as many as 164 public spaces during the day.