Delano apartment/hotel project barely passes amid opposition over $12 million subsidy

A plan for 180 new apartments and a hotel in Delano barely passed the Wichita City Council on Tuesday, with the mayor saying that he thinks a $12 million public subsidy for the project is too much.

The plan, called the Delano Catalyst, will sell two city properties to a Johnson County development group to build the apartments, 90-room hotel and a small retail space adjacent to the new Advanced Learning Library, which is under construction southwest of the intersection of Second and McLean.

The plan and accompanying $12 million in city subsidies were the result of about a year of negotiation between the city and and EPC Real Estate, chosen by the council last year to develop the site with an eye toward spurring business expansion in the Delano area.

It passed 4-3 with Mayor Jeff Longwell and council members Bryan Fry and Jeff Blubaugh voting no.

Longwell led opposition to the plan, although he said he likes the project.

“The only part I’m struggling with is staff said they started out at $14 million (for the developers) and talked them down to 12,” Longwell said. “Twelve hasn’t got me to my comfort zone yet.”

The site is part of larger sales-tax and property-tax bond districts that the city is counting on to generate money to replace the Lawrence-Dumont baseball stadium.

“I’m not comfortable with giving away $12 million because we’re not going to do anything close to this in the rest of that ... district, because we do need the financing to develop out the ball park in that area,” he said.

Council member Janet Miller, who represents the Delano area, defended the deal, saying it will generate funding for the new stadium even with the public subsidies for its construction.

“What we have presenting to us today is a project from a very highly sought-after, multi-year award-winning developer in the Kansas City area,” Miller said. “EPC’s project has a higher density of people than some other projects we’ve looked at, (containing) both residential and the hotel.

“That’s going to be advantageous to Exploration Place, the bike and boat rentals, to Delano, to the entertainment,” she said. “The hotel’s going to present opportunity for Intrust Bank Arena meetings, conventions, that’s a plus.”

The developers will pay $750,000 for the city-owned property.

They’ll get back incentives of as much as $9 million from future property taxes on the new buildings, plus $3 million from a 2 percent sales tax to be levied on purchases made in the project area.

The city also plans to issue bonds exempting the developers from paying sales tax on construction materials and supplies for the new construction.

This story was originally published December 12, 2017 at 1:49 PM with the headline "Delano apartment/hotel project barely passes amid opposition over $12 million subsidy."