For all their faults, community improvement districts and their higher sales-tax rates clearly are here to stay in Wichita. Developers seem as eager to request them as city officials are to approve them.
But the city should not be handing out CIDs like Valentine’s candy. The designation should be used only when necessary to spark development downtown or in areas where it won’t happen otherwise, or to land a big fish retailer or other business that otherwise wouldn’t bother with Wichita.
The CID request filed last week by Cabela’s passes the test.
Many others, including the one sought for the Eastgate shopping center, do not and should be rejected.
Unlike the economic development tools that capture revenue within a district to bankroll improvements there, CIDs raise money by raising taxes — adding 1 to 2 percent to the local 7.3 percent sales-tax rate to cover some of the costs associated with the project. City officials and developers see the CID as just another tool handy for these times, when financing is so hard to find. But it essentially lets businesses set tax rates and makes taxpayers underwrite some of what should be the costs of expanding and doing business, as it risks turning the city into a confusing patchwork of different sales-tax rates. And until the council opts for more transparency, only a vaguely worded sign mentioning a website will advise shoppers when they’re in a CID business that charges a higher sales-tax rate than they’d pay elsewhere in the city.
But in a world where CIDs are necessary, a CID for Cabela’s makes sense. In other markets, the Nebraska-based outdoor store functions as a tourist attraction as well as a place to shop. With taxidermy and wildlife displays, it promises to be a regional destination, drawing people and their money to Wichita. Plus, part of the proposed additional 1.2 percent of sales tax charged in the Cabela’s CID at 21st and Greenwich would serve the important public purpose of adding some ramps at the K-96 interchange at Greenwich. The CID could generate up to $17 million over 22 years. It’s easy to imagine that when the 80,000-square-foot Cabela’s opens in spring 2012 or later, it will provide a big boost to Wichita’s economy. City Council members, who are scheduled to discuss the Cabela’s CID at Tuesday’s meeting, should not hesitate to set it for a March 8 public hearing and approve it after that.
The same kind things cannot be said for the proposed CID at Eastgate Center, at Rock and Kellogg, where the owners want to raise the sales tax by 1 percent for 22 years to cover up to $18.5 million of their improvements. Eastgate suffered during the endless Kellogg construction nearby, but it’s at a high-profile intersection in a high-traffic, outlying area of town. Its fortunes should improve as the economy does. The council, which last week set the proposal for a March 1 public hearing, should decline to give Eastgate the higher tax rate it wants.
As members of the current and next City Council deal with these and other CID proposals, they should ask themselves: Does this serve downtown revitalization? Will it draw out-of-towners? And, above all, is this tax hike really necessary?