City Council grants extensions, more IRBs for downtown education complex development
The Wichita City Council approved project extensions for three of the four buildings in developer Sudha Tokala’s downtown education complex.
The council also issued $10 million in industrial revenue bonds and a five-year 100% property tax abatement on the former Henry’s department store building that will house the WSU Tech culinary school.
In addition to the tax exemption on real estate financed by the bonds, IRBs also include a potential sales tax exemption for construction materials, which could be particularly valuable considering the inflated cost of materials.
Tuesday’s vote was 6-0 with council member Becky Tuttle abstaining. Tuttle serves as director of special projects for the WSU Tech Foundation.
Tokala’s education complex is also set to include the proposed Kansas Health Science Center – Kansas College of Osteopathic Medicine, a 119-apartment student housing facility and a 119-room AC Marriott Hotel.
The proposed medical school is nearing completion, but developers say a worker shortage and supply chain delays related to COVID-19 have slowed down work on the other three projects.
The council updated the development agreement with Douglas Market Development LLC to include “contractor/subcontractor or supplier delays” as excusable reasons for project delay.
“I’m a little concerned with the supply chain,” Vice Mayor Brandon Johnson said before the vote. “Things are moving slower than honey and I just want to make sure that we hit those deadlines. I know that there was confidence there, but I just hope that the supply chain keeps up.”
The updated development agreement defers completion of the hotel from March to December 2022 and the culinary school from July to August 2022.
The longest delay would be for the student housing facility, which was originally supposed to be completed by August 2022 to accommodate the first class of medical students expected at the OD school. The agreement now calls for its completion by December 2023.
The city has already invested millions of dollars in Tokala’s project in the form of IRBs, tax abatements and other incentives, as well as asbestos removal and facade improvement costs.
The city also added an extra sales tax on purchases within the project area and spent $1.3 million in tax increment financing that dedicates future property taxes to pay for the redevelopment of the Chester I. Lewis pocket park, which is being repurposed as an entry plaza for the private medical school.
This story was originally published November 9, 2021 at 12:20 PM.