Politics & Government

City OKs razing Mead’s Corner, gives $5 million plus in tax breaks to developer

Despite pleas from historic preservationists, the City Council voted to allow a developer to demolish the building that recently housed the Mead’s Corner coffee house at the northwest corner of Douglas and Emporia.

Moments later, the council voted to provide more than $5 million in sales tax support and property tax breaks to the developer to construct a four-story building with 60,000 square feet of office space and 10,000 square feet of storefront retail.

The council also voted to sell a public parking lot to the company to provide parking, because the new building will be constructed over the existing on-site parking.

The project is expected to create 25 new jobs.

TGC is the same company working in partnership with the city to redevelop the Spaghetti Works District and rebuild the adjacent Naftzger Park on Douglas west of the BNSF railroad tracks.

Council member Cindy Claycomb, who represents the area, recommended approving the demolition and new construction.

“I think that our history is very important, but our history is not just buildings,” she said. “A vibrant downtown with office workers and retail is also part of our history.”

Tuesday’s council actions came after two former City Council members, Sharon Fearey and Greg Ferris, spoke in opposition.

Feary asked the council to uphold a decision by the Historic Preservation Board to preserve the building.

Ferris objected to the tax package supporting the building.

He said the proposed tenant, the financial services firm IMA, will be moving from east Wichita to the new building. He said the company wasn’t in any danger of leaving Wichita and had actually been negotiating with another building owner for new space before the Mead’s Corner project cropped up.

“To grant (tax breaks for) spec office space and to grant office space to move from one facility to another (within the city) certainly is bad policy,” he said.

Corb Maxwell, a lawyer representing TGC, said the company sees it as an extension of its partnership with the city in redeveloping the historic Spaghetti Works building, redeveloping and modernizing Naftzger Park and constructing new commercial buildings alongside it.

“This developer does not not like historic renovation,” he said. “They want to do it when it can be done and it can be for the best of the community . . . Unfortunately for this specific (Mead’s Corner) site it doesn’t work.”

He said the only way to bring about a class-A office building at the site would be to allow demolition of the existing building and provide the developer the tax breaks.

“It is a thin project, it is not showing market returns,” he said.

Greg Kite, president of the Historical Preservation Alliance of Wichita and Sedgwick County, said that’s the developer’s own fault.

“They bought it knowing full well it had triple registry designation (on the local, state and national registers of historic places) and was an important part of the East Douglas Historic District,” he said. “This issue today raises a very dangerous precedent. A developer buying a triple historic registered property, not to be the caretaker, not to be the custodian of that property, but to demolish it . . . where do we end with that approach?”

The historic district was established in 2004 to preserve the architectural heritage of what was the dominant center of commerce and transportation in Wichita from 1875 to the end of World War II.

Mead’s Corner was a coffeehouse and community ministry of First United Methodist Church. It operated for about 10 years until July, when the property owner demanded a steep increase in rent. An effort to establish another coffeehouse at the site was turned aside in favor of the redevelopment plan.

The financial package for TGC’s office building includes:

▪ The sale of a 75-space city-owned parking lot to the developers for $300,000, mostly to provide parking for the prospective office space at the site. Mayor Jeff Longwell said his understanding is that the lot, on the east side of Emporia, is little-used at present.

▪ An extra sales tax on purchases made in the new development of 2 cents on the dollar for 22 years.

The add-on sales tax is projected to generate $2.2 million, most of which would go to the developer to help defray the cost of the project.

▪ The city would keep 10 percent of the increased sales tax to pay for converting Emporia from a one-way street to a two-way street to accommodate the development.

▪ Industrial revenue bonds would be issued. Those would provide about $2.7 million in property tax relief over 10 years for the developer.

The bond issue would also save the developer an estimated $750,000 in sales tax on building materials, equipment and furnishings to complete the project.

Senior Journalist Dion Lefler has been providing award-winning coverage of local government, politics and business in Wichita for 20 years. Dion hails from Los Angeles, where he worked for the LA Daily News, the Pasadena Star-News and other papers. He’s a father of twins, director of lay servant ministries in the United Methodist Church and plays second base for the Old Cowtown vintage baseball team.