Waterwalk hotel issue receives public input

Tuesday’s meeting of the Wichita city council featured a lengthy discussion of a proposal that in the past, might have been passed without much public discussion. Instead, some useful information emerged, and the meeting opened the possibility of more citizen input not only on this item, but also on future city initiatives.

The issue is a proposal for a hotel in the city’s WaterWalk district. My preview of the matter, which includes the city-supplied agenda report, is at Waterwalk hotel deal breaks new ground for Wichita subsidies.

As an example of information that was revealed at this meeting, there was concern expressed by council member Sue Schlapp that the proposed hotel might be granted a period in which it would be the only hotel in WaterWalk. Bell replied that we don’t have the answer to this question, and that this has not been addressed. Later, a representative of WaterWalk revealed that the proposed hotel had an agreement that it would be the only hotel in WaterWalk for three years and possibly up to four years.

This is an important piece of new information, as downtown boosters continually speak of the idea of “critical mass.” The idea, I believe, is that multiple hotels may feed off the presence of each other, instead of being in competition with each other. Or it might be that if other hoteliers see this proposed hotel doing well, they’ll be induced to build one on their own. But if there will not be another hotel in WaterWalk for at least three years, that puts a damper on the formation of critical mass. Hotels, of course, could be built in other parts of downtown.

Council member Lavonta Williams asked about the survey the city is conducting to see if the proposed hotel would harm the city-owned Hyatt Hotel: Will it look at nearby hotels that the city doesn’t own? Bell said the consultant may look at those hotels, interview their management, and may be able to offer some information as to that. But Bell said that the present agreement considers only the Hyatt Hotel.

Council member Jell Longwell said we’re sensitive about the burden on our local taxpayers. But the taxes on the proposed hotel would fall on out-of-area taxpayers, he said. His clear implication was that taxing visitors to our city is okay. The problem is that many visitors to a city pay attention to taxes. When a $100 hotel bill blooms to $114.30 with taxes, people notice, even business travelers whose employers may pay the bill.

(The taxes are 6% for the transient guest tax or “bed tax,” 6.3% for our present sales tax, and another 2% for the Community Improvement District tax. Then if the governor has his way, there will another 1% in Kansas sales tax, and if some downtown boosters have their way, there will be yet another 1% city sales tax to provide subsidy for downtown.)

Council member Paul Gray answered his own question with: “why would you?” The question was why would anyone build a hotel downtown privately when there are several subsidized hotels already operating? The unlevel playing field was created long ago, he said, and it’s unlikely that anyone will develop a hotel without receiving similar benefits from the city. He also said that we’re on the hook for the bonds sold for the WaterWalk TIF district. He made reference to the “giant hole that we’ve already created with the financial obligations we’ve placed on that.”

After citizen John Todd spoke, Longwell asked how much lead time the council should give citizens for matters like this. He said that the Wichita Eagle reported the story, adding “I thought everybody read the Eagle.” (I wonder if Longwell has noticed the layoffs at the Wichita Eagle and the poor financial performance of most newspapers as fewer people read them.)

A search of the Eagle for stories on this topic shows a blog column from Wednesday January 6, just six days before the city council meeting where the item was to be considered. The Eagle printed stories on Friday and Sunday. These stories, however, don’t report the detailed information that some people would like to have. There’s simply not room in a newspaper, as the agenda report for this item contained ten pages of small print. Not many people are interested in such detail, either.

(The city’s agenda packet for this meeting, which is the important source of detailed information, became available on the city’s website probably late Thursday. The pdf file indicates that it was created at 4:51 pm that day.)

Longwell pressed Todd: “How much lead time do we need?” I have an answer for him. After I read the agenda packet Friday afternoon, I emailed Wichita public information officer Van Williams with a few questions. By Monday afternoon I hadn’t received a response. I’m not criticizing Williams, as he might have had any number of valid reasons for not replying to my questions right away. But even if he had replied Monday afternoon, that’s just a few business hours away from the meeting. That is definitely not enough time to digest a project of this scope.

Gray then asked Todd how much vetting does the public do on a project like this? The answer to this is: not enough, as the city has a recent history of problems with its development partners. In December 2008 the city was about to enter into an agreement with a developer when Dion Lefler of the Eagle uncovered very troubling facts about the developer’s past dealings. See Wichita city hall: more evidence of lax procedures for a summary.

Then-city council member Sharon Fearey — now a candidate for the Sedgwick County Commission — was disappointed that the Eagle uncovered these facts and reported them. See Sharon Fearey doesn’t appreciate the Wichita Eagle for the story and video.

Since then Wichita has a new city manager, and the city has said it has new procedures in place for investigation of the backgrounds of potential business partners. Other problems remain, however. Last month Wichita Eagle editorial writer Rhonda Holman wrote about missing or incorrect information provided to the city council:

Worse, when the council approved the Big Dog deal on a 5-2 vote, its members reportedly were unaware that the company had hired an investment banker to explore a possible sale or merger. Plus, city documents about Big Dog listed its employment at 115 when the number actually has dwindled to 30 to 40 (from a 2005 high of 336).

A policy meant to guide the use of tax abatements and other tools doesn’t work well if decisions are based on faulty information.

Going back to 2004, we have evidence that city council members were not familiar with even the most basic facts about our economic development programs. The article “Tax break triggers call for reform” published in the Wichita Eagle on August 1, 2004 reported this:

Public controversy over the Genesis bond has exposed some glaring flaws in the process used to review industrial revenue bonds and accompanying tax breaks.

For example, on July 13, Mayans and council members Sharon Fearey, Carl Brewer, Bob Martz and Paul Gray voted in favor of granting Genesis $11.8 million in industrial revenue bond financing for its expansion, along with a 50 percent break on property taxes worth $1.7 million.

They all said they didn’t know that, with that vote, they were also approving a sales tax exemption, estimated by Genesis to be worth about $375,000.

It’s not like the sales tax exemption that accompanies industrial revenue bonds was a secret at the time. An easily accessible web page on the City of Wichita’s web site explains it.

Regarding the present case, Schlapp said she would have liked to have known about the exclusivity period earlier. That’s just one example of something not contained in the agenda packet that is important for citizens and council members to know, and we didn’t know that before this meeting.

Gray also noted the history of some of the people at the council meeting who opposed the project, adding that he didn’t see them changing their minds. That attitude represents a simplistic view of the way public policy ought to be formed.

An issue like this has many facets. Some could possibly have merit, and some certainly are harmful. A discussion like what took place at this meeting can provide a forum for exploring these issues, and perhaps eliminating the bad in favor of the good. The fact that some might still be opposed to the project doesn’t negate this.

In the end, the council voted unanimously to defer this matter until its February 2 meeting.


13 thoughts on “Waterwalk hotel issue receives public input”

  1. This was sent to one Councilman. Once again we as the public
    feel we are deceived by this process. If the citizens of Wichita are going to fully fund a hotel We demand something great like a Great Wolf Lodge that will bring real tourist $ to town.
    The cost to build a fairfield without land or development costs is about $30,000 maybe $45,000 (this includes land and development costs) at the outside. Try the enclosed Google link. http://www.hotel-online.com/News/PR2003_2nd/May03_HotelWaterParkStudy.html
    You realize at $35,000 per room they would actually receive more incentives than what it would cost for construction
    and operating capital

  2. Excellent coverage and assessment Mr. Weeks. It is obvious that the Council does not have all the necessary facts to make an informed decision. This is one reason why citizen input is so important….so that questions can be asked and perhaps get a better project as a result. The “slam/dunk” mind set of this council puts all of us in jeopardy for many years to come and it appears that any developer’s dream can be realized if only he peddles that dream at 455 N. Main and the dream is limited to downtown.

  3. We need a casino vote again. Why do we need another hotel for? Who is comming to Wichita for the night or weekend? Great Wolf Lodge would be good but guess what is near it??? A casino. Once again the wolves are asking the sheep what is for dinner. I am ready to run for city council. This sounds like some people are getting their pockets lined.

  4. Bob,
    I would like to correct the record. On the Genesis IRBs, I did know that a property tax exemption was part of the deal. The other members of the Council did also, but they decided to claim amnesia so that they could come back and renege on the deal for political reasons. I always read my Council agenda materials and knew what was going on. City staff did not lied to us, but sometimes they did not tell us everything about an issue. Most Council members did not read their entire agendas prior to our weekly Council meeting.

    In 2004, hotelier John Q. Hammond came to see me about buying the Hyatt, extending the parking garage to Main and building another tower without any government assistance. City staff and Councilmembers did not support Mr. Hammond’s plans. I, then, turned to the County to have Mr. Hammond build a hotel connected to the Intrust Arena and that idea, again, went on deaf ears. The bottom line is that in Wichita to build anything you have to “grease the wheels”.

  5. Seriously, is anyone other than John Todd that spoke in opposition even remotely qualified to offer an informed and objective opinion on the financial structure of this proposal? Or even offer any kind of credible opinion as to what it costs to construct a hotel without knowing any of the particulars?

    As I have noted previously on other threads on this particular issue, the “analysis” is nothing more than worn political rhetoric and Councilman Gray is correct. There is political agenda that cares not for facts or factors that don’t support a particular ideology. It’s just an opportunity to promote a particular platform. This is a very complex issue that has a lot of things to consider beyond just the financial structure of this proposal.

    Councilman Gray is absolutely correct. Unfortunate past policy has created a potential financial hole with Water Walk that almost demands that this proposal is approved because the community (that means all of us who live in Wichita) are at risk if it fails. There is nothing in the blog that gives any “analysis” of this aspect. Where is this information? Or a discussion on the lack of hotel rooms in the city? The lost financial opportunities, i.e. conventions

    The discussion at the council meeting was indeed informative and beneficial; however, to imply that our council members are obtuse about city policies is pretty much a low blow. With the exception of the Mayor, they are part time representatives. Do you really expect them to work 80 hour work weeks? Be careful what you ask for. I will always agree that staff needs to be thorough in providing information to the council so that an informed decision can be made. Guess it’s always easier to play arm chair quarterback and cast lead footballs…….

  6. Benjamin
    If you are truly sick of this we have a meeting at Mike’s Steakhouse Monday at noon. If you want to build a support base for a potential City Council Race it might be a place to start. Other places are joining AFP, Kansans for Liberty, American Majority, Independence Caucus.

  7. Pat Sorry I come across as a less informed and objective opinion. I had a real nice speech written. But in order to get most of the facts out (since it is impossible in the 5 minutes they give us) I emailed my concerns ahead. Since the council knows I will show up and bring all those points out it forced them to consider them in open Council before I got to speak. It also gave them the opportunity to attack me using my own material. Forcing them to debate all the items openly is a great improvement over what we normally get, and ultimately bought us the 3 weeks we will need to rally public opinion around a better choice or to kill this because of the dicrepencies exposed.

  8. Benjamin I know some people that have a petition prepared to circulate to get expanded gambling on the ballot. Would you care to champion it?

  9. Bob has done a good job summarizing the remarks before the council. I suspect some humor in Todd’s remarks when he complained about the government telling us how much water we can put in our toilets. I do think the government should make sure that everyone has enough to flush their toilets. And not just the ones who flush first. HA.

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