Higher tax in upscale areas shouldn’t be aim of Community Improvement Districts

Community Improvement Districts are fine in theory. Give a developer an incentive of tax breaks on materials needed to construct a new business, getting back that money by charging extra sales tax – usually 1 or 2 percent – to consumers in that pre-determined area over a period of up to 22 years.

The developer saves millions. The consumer gets the benefit of new development – a hotel, restaurant, business or entertainment venue – and probably doesn’t see or feel the extra tax being paid. The city sees value from development of an area that may not otherwise be improved.

Once you get past the troubling idea of consumers footing the bill for developers – check your receipt closely – there are CIDs that are cause for concern. The new Chicken and Pickle development, at 13th and Greenwich Road, is the latest example.

The Greenwich corridor is one of the most rapidly developing areas of the city, and the land on which the Chicken N Pickle restaurant and pickleball courts will be developed is one of Wichita’s most valuable parcels. It’s a few hundred yards from the Warren Theaters and The Alley bowling and entertainment complex, with some of the city’s more upscale homes minutes away in all directions.

It is not a blighted or run-down area, which have traditionally been places in which CIDs are intended and most effective. But the City Council approved a Chicken N Pickle CID last week, planning to raise $2.3 million with a 1 1/2-cent sales tax increase for up to 15 years.

The Council vote was 6-1. Bryan Frye, a regular opponent of CIDs, was the dissenter.

“It’s supposed to be used for areas that are not likely to get developed otherwise,” Frye told The Eagle. “With everything else that’s going on in that part of town, I didn’t see it as necessary. ... It’s one of the more developable parts of town and continues to grow with more and more.”

Frye is right. Though land in the Plazzio development has gone undeveloped since the Warren East opened in 2002, it hasn’t been because it’s not attractive. Interested developers were probably waiting, patiently, for the right deal to come along.

It came along for Chicken N Pickle.

The City Council approved two other CIDs last week. One is the area scheduled for improvement around the old Spaghetti Works building near Douglas and St. Francis, and the other is the planned hotel/apartment project to be located on both sides of Sycamore Street between the Delano area and the nearly completed Advanced Learning Library.

Those CIDs make more sense. Development in those areas is riskier and offering incentives to builders is a logical way to spur needed or desired improvements.

In their seven-year history, community improvement districts have been a popular tool in Wichita and around Kansas. But city leaders should recommit themselves to use them sparingly and only for blighted areas or areas that have a unique need or community value.

Development in those areas become a useful goal that can be put on taxpayer shoulders, but the same can’t be said for the city’s most well-off places. Taxing consumers in places that could be developed without the city’s help becomes an unnecessary burden that favors developers over Wichitans.

This story was originally published January 12, 2018 at 2:39 PM with the headline "Higher tax in upscale areas shouldn’t be aim of Community Improvement Districts."