The Union Station tax increment financing district expanding to include a 1901 building to the southeast of the vacant building got the go-ahead Tuesday from the Sedgwick County Commission.
The Wichita City Council approved the expansion last month.
Occidental Management is the developer of the $54 million Union Station project and will also develop and eventually move into the building included in the expansion. The 20-year district was originally approved in 2014. Occidental president Chad Stafford said they would invest another $9-plus million in the building included in the expansion, which is Union Station’s former icehouse at 155 S. Rock Island.
The tax increment financing district or TIF district puts most of the financial burden of construction on the developer. The developer will be reimbursed with future increases in property tax revenue that resulted from the development.
Municipalities can only use funds for infrastructure and other public improvements, such as a park within the district.
For the municipalities, a building that was once blight will be improved. And the entities capture future revenue from the increased property value taxes after the allotted TIF district period.
Sedgwick County Deputy Chief Financial Officer Brent Shelton said appraised value at Union Station tripled since the 2014 improvement started. Meanwhile, the building in question for the expansion has remained flat during that time.
“Basically, it’s not moving up and the other area adjacent to it is tripling,” Shelton said.
The Union Station development will repurpose five buildings and add as much as 150,000 square feet of new office and retail space, county documents say.
The new development, appropriately called the Ice House, will turn the 27,000 square-foot building into a 40,000 square-foot office and retail space.
The project includes up to $317,000 in infrastructure improvements that will come from the increased appraised value that otherwise would have gone to the city, county and Wichita Public Schools District.
County documents say the return on investment of the building included in the expansion would be -1.62 percent if it were not for the TIF district. The change bumps that up to a 7.7 percent increase.
The school district also will need to vote to deny or approve the expansion, since it affects the district’s tax base. No action would be the same as an approval.
District agendas don’t seem to indicate if the school board weighed in yet. A spokesperson did not return a call from The Eagle.