Politics & Government

Wichita plans to sell riverfront property near new ball park for $1 an acre

Editor’s note: This story initially reported that the city was selling 24 acres under and around the ballpark. The city has since clarified that the development areas to be sold total 4.5 acres.

After agreeing to build a $75 million stadium to lure a minor-league baseball team to Wichita, city officials now plan to sell the land around the stadium to the team owners for $1 an acre.

Wichita Riverfront LP, a partnership that was created to develop the area around the stadium, would buy 4 to 4.5 acres of the 24 acres the city owns west of downtown.

The ballpark developers’ majority owner, Lou Schwechheimer, said the city will come out ahead in the deal. Schwechheimer, who is moving the Triple-A Baby Cakes from New Orleans to Wichita, said the ballpark and surrounding area will be a catalyst for economic growth across Wichita.

“We are absolutely going to give the fans and the residents of Wichita and the surrounding areas our very best effort every day, and we’re going to give so much more than we are going to take,” Schwechheimer said.

Officials say the city is selling the land so cheaply so it can quickly begin collecting money from commercial development in the area to help pay for the stadium.

“It goes back to the partnership that we have worked out with the team,” said Scot Rigby, assistant city manager and director of development services, whose department came up with the agreement.

“That’s where we struck that agreement on the value of the ground. For the city, we’ve already owned that property,” he said. “If we didn’t do anything with it, it would be undeveloped property. So the value for us is to get it in development as quickly as possible.”

The real estate sale and development agreement will go before the City Council on Tuesday. It would sell several spots of city-owned property in the area from Douglas to Maple between Sycamore and the west bank of the Arkansas River to Wichita Riverfront LP, which filed articles of incorporation with the Kansas secretary of state on Friday.

Neither Schwechheimer nor the Kansas Secretary of State’s Office would provide a full list of owners for the newly formed business entity. Schwechheimer said it includes CBI LP, the owners of the New Orleans Baby Cakes and Port Charlotte Stone Crabs. He also plans to have Wichita partners in the baseball team and its future developments but would not name them yet.

Commercial development around the stadium is essential, City Manager Robert Layton said, not just to give people something to do and somewhere to go, but to help pay for the stadium project.

Bringing new businesses into the ballpark area will grow the city’s tax base and help pay off debt on the stadium through district-based taxes, Layton said.

“What you had to do is look at it as the total package, right?” he said. “And so you have to take all of the considerations: What they’re spending to bring the team here. What they’re going to spend for the team operation and maintenance, what we’re going to get back from the team for that as well as all the revenue stream coming from the private development.”

According to the terms of the agreement, if Wichita Riverfront LP failed to hit certain benchmarks, the city could buy back the land for the same price.

More than a stadium deal

Having the baseball team expand its operations from baseball to real estate along the river has been part of the plan since talks started between the team owners and city officials about three years ago, and it played a major role in attracting the team to Wichita, officials with the city and the team said.

“We needed a team that played the level of baseball that was attractive for the community and important in terms of affiliated baseball at the Triple-A level. But we also wanted a team that could deliver on the development,” Layton said.

Schwechheimer, the baseball team’s owner and ballpark area developer, said several things made his ball team choose Wichita, including how welcoming the community has been and the mayor’s enthusiasm. The potential for development around the stadium was a definite draw.

“It was easy to see that it could be transformational,” he said. “So it was a combination of factors, but certainly the riverfront and the development that can be part of the baseball village was something that was extraordinary for us.”

City leaders say the real estate deal would help make sure the team sticks around for the long haul.

“If you think about it, it’s the better assurance to the community that the team will be here for the long term,” Rigby said of the team’s owners taking on a lead developer role.

The city is not suited to act as the developer on such a big deal, Layton said. Selling the land would hand off the project to people who are better prepared for commercial development.

“The whole idea is for us to do what we do best,” Layton said. “And that’s infrastructure and our traditional services. I think that it would not be smart for us to also then try to serve as a developer on our own, because that’s not just something that we do every day.”

Development around the new stadium will be a new arena for the team’s owners. The New Orleans Baby Cakes played home games in a stadium mostly surrounded by parking lots and sandwiched between a highway and a railroad. The Port Charlotte Stone Crabs play home games in an undeveloped area of Port Charlotte, Florida, that has a grass parking lot.

But Schwechheimer said the owners are a creative, imaginative group that can make the development happen, especially with the help of local developers.

The city’s ability to buy back the land lessens the risk, Layton said.

“That’s an element of control in all this,” Layton said. “They have to deliver on their schedule, or else we buy the land back that they haven’t developed so that we can make it available to another developer.”

Selling the city’s land to the ballpark developers, instead of entering a long-term lease agreement, will make financing the construction projects easier for the developers, Layton said, because it’s difficult to take out a mortgage without owning the land.

Wichita Riverfront LP would also have an option to buy the parking lot north of Drury Plaza Hotel Broadview for between $1 million and $1.5 million in the next nine years under the terms of the agreement. It would have to develop that parking lot as part of the deal, Layton said.

What’s the deal?

If the real estate deal passes City Council, the developers would be obligated to build 65,000 square feet of commercial space by 2025.

All of the developments must conform to the Ballpark Village Master Plan and the Delano Neighborhood Plan, the agreement says. Those neighborhood plans give set standards for construction, such as how tall buildings can be and what sight lines will remain open.

Buildings would pop up in three phases.

In phase one, Wichita Riverfront LP would build 30,000 square feet of “ground floor retail, restaurants and/or hotel/hospitality space” by summer 2022.

Phases two and three would add 20,000 square feet and 15,000 square feet of commercial space to the area. Both would have an 18-month time limit from start to finish and would be completed by 2025.

Wichita Riverfront LP would agree not to accept money from the community improvement district, or CID, for its private developments.

A community improvement district would allow businesses to charge customers up to 2 percent in additional sales tax. That money typically goes back to the developers to cover the costs of the project. In this case, that money would help pay for the stadium, Layton said.

Wichita has not approved such a district for the area yet, but the map outlined in the City Council agenda suggests one that would stretch from Douglas to Kellogg and from Sycamore to Main. That would include the new baseball stadium, the WaterWalk area and Century II. Details are not final and City Council would have to approve that area after a public hearing, Layton said.

The ballpark project, which includes the stadium and a pedestrian bridge across the Arkansas River, is expected to cost the city around $83 million. The project is to be financed through a combination of STAR bonds and general obligation bonds, paid back by taxes on the new development, property taxes and sales taxes in the development area.

“Otherwise, the whole burden for the construction of the stadium would fall on property tax payers, and that just wasn’t going to work,” Rigby said.

Choosing local partners

Schwechheimer said he “absolutely” plans to hit every deadline in the agreement. One way he will do that is by working with local developers and community leaders who have approached him about buying into the team, he said.

“We have quietly met over the last several months with a number of very passionate and prominent business and civic leaders in Wichita who want to do the right thing for the community — our community,” he said.

“And we expect to announce shortly that there will be a number of local ownership entities being a part of our baseball park in Wichita,” he said.

“They’ll be intimately involved, and we wanted local ownership to embrace the riverfront, embrace the ballpark, and you know we’ve always said we’re going to do the right thing. To have the input, guidance and passion of those that were born in Wichita, that lived their whole lives in Wichita and have given so much back to the community is critically important to us,” he said.

He would not say who the prospective partners would be and said they would have to be approved by the Pacific Coast League, Minor League Baseball and Major League Baseball to be owners of the baseball team.

“I think once we convey who some of the wonderful leaders in the community that have joined us in this generational opportunity are, I think it will be a wonderful cross-section of the Wichita leadership, business and community leaders that have always sought to do the right thing for their community,” he said.

Schwechheimer said he landed in Wichita at the right moment.

“It’s a moment in time where the confluence of factors came together — with a visionary mayor, with a bold City Council, with a community leadership that embraced the idea of creating a bold vision for the future — and we’re proud to be part of that vision,” he said.

He said the team plans to keep ticket prices low.

“Our top ticket price is going to be $15 because of the support of the community. . . . Because of the support of those involved, a family of four can buy a ticket for $9 each and go out and sit on the berm and enjoy,” he said.

“It’s going to be one of the most iconic and beautiful ball parks in all of America,” he said of the stadium. “Not only minor league baseball, but major league and minor league baseball. This is going to be a ball park that takes your breath away,” he said.

From a first date to a first pitch, he wants the new ballpark development to be a vital part of Wichitans’ lives.

“These are the types of things that forever change a culture,” he said.

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Chance Swaim won the Betty Gage Holland Award in 2018 for distinguished service to honor and protect the integrity of public dialogue on America’s college campuses. He has been a news reporter for The Wichita Eagle since 2018. You can contact him at 316-269-6752 and cswaim@wichitaeagle.com.