Owners ask Wichita for added 1% sales tax at former Margarita’s building

The new owners of the former Margarita’s Cantina building on East Douglas are asking the Wichita City Council to place an added 1% sales tax on future businesses that operate on their property.

The extra sales tax would reimburse the owners for renovations to the highly visible 1931 Art Deco building near Douglas and Hillside that’s painted a loud pink color that matched Margarita’s playful tex-mex theme.

Brothers Brian and Paul Sullentrop bought the property at 3109 E. Douglas for $555,000 in an October auction. After the purchase, Margarita’s Cantina announced it was closing after Dec. 31, 2025 with plans to reopen in March 2026 at 725 E. Douglas in Union Station. It has yet to reopen.

The Sullentrops plan to spend $1.5 million renovating the building – with $233,250 in public funding under a proposed community improvement district, or CID, according to the city’s agenda report.

The Margarita’s site also includes a small vacant attached building that used to be a barber shop at 3111 E. Douglas and a large parking lot that stretches from Douglas to Oakland Avenue. The CID covers the entire property but does not include any neighboring properties.

The City Council is expected to decide Tuesday whether to set a public hearing date for the CID request. The hearing would be July 7 or later.

In a petition for the new tax, the owners say there’s a market demand for the project.

“The East Douglas corridor has seen growing interest from small businesses and restaurateurs,” the petition says. “The renovated space will fill a gap in quality commercial inventory between Hillside and Oliver.”

But it isn’t feasible without public assistance, the petition says.

“Without CID assistance, the project produces negative cash flow at achievable market rents,” the petition says. “The building is currently vacant and generating zero taxable sales. CID reimbursement bridges the gap between renovation cost and supportable rents.”

The incentives would be “pay-as-you-go,” meaning the developers would be responsible for the upfront costs of renovating the building while the city would reimburse them through the 1% sales tax as money was collected. The tax district would expire after 22 years or after generating $233,250, whichever comes first. No money would go to the owners without sales at the property.