Tag Archives: Downtown Wichita revitalization

Articles about the redevelopment of downtown Wichita and its impact on the economic freedom of Wichitans.

Public forum on WaterWalk hotel proposal

On Monday January 25, a group of citizens will hold a public forum concerning the proposal for a hotel in the WaterWalk development in downtown Wichita.

The event is from 7:00 pm to 8:00 pm in the meeting room of the Wichita Downtown Public Library. The meeting room is on the top floor of the library.

Tirza Heflin is the organizer of this forum. She says:

“You and the public are invited to join a group of interested citizens to discuss the proposed Water Walk hotel.

An invitation to join this public forum discussion has been sent to Wichita Mayor Carl Brewer and all of the Wichita City Council members.

The forum is being organized by a group of citizens who are interested in downtown redevelopment, and want to see our downtown thrive. Several citizens have questions about the public sector interests in the WaterWalk public/private partnership before our City Council considers the letter of intent for this project on February 2, 2010.”

Contact Tirza Heflin at 316-201-8353 or [email protected].

The Facebook page for this event is Public forum on WaterWalk hotel proposal.

Goody Clancy market findings presented to Wichita audience

Goody Clancy market findings 2010-01-13 08On January 13, 2010, planning firm Goody Clancy presented some findings to a Wichita audience at the Scottish Rite Temple.

Last Wednesday Boston planning firm Goody Clancy presented some preliminary findings regarding the planning process for the revitalization of downtown Wichita. While the presentation contained some material specific to Wichita, those looking for a preview of how the planning process will deliver its promised benefits were likely to be unsatisfied.

As always when talking about downtown, there was talk about how a thriving downtown is necessary for a healthy Wichita and region. One presenter said “If you have a healthy downtown, you will have a healthy region. If the downtown starts to fail, the region will start to fail.” Believers of this mantra, however, are not able to supply evidence as to the truth of this.

A theme repeated over and over is that downtown development will succeed as downtown becomes more walkable.

David Dixon, the Goody Clancy principal for this project, told how that in the future, Wichitans will be able to “enjoy the kind of social and cultural richness” that is found only at the core. “Have dinner someplace, pass a cool shop, go to a great national music act at the arena, and then go to a bar, and if we’re lucky, stumble home.”

Dixon said that this planning effort is grounded in data and hard analysis. As an example, Dixon promoted Walk Score as a measure of the value we place in downtown. Walk score, according to its website, “calculates the walkability of an address based on the distance from your house to nearby amenities. Walk Score measures how easy it is to live a car-lite lifestyle — not how pretty the area is for walking.”

I’ve found that the walk scores are not credible measures. The score for 525 E. Douglas, the block the Eaton Hotel is in and mentioned by Dixon as a walkable area, scored 91, which means it is a “walker’s paradise.” Examination of the results, however, leads us to have little confidence in this measure.

For example, an important “amenity” — that’s a favorite word of planners — that should be nearby is a grocery store. The details for the walk score indicates a grocery store just 0.19 miles away. It’s “Pepsi Bottling Group,” located on Broadway between Douglas and First Streets. Those familiar with the area know there is no grocery store there, only office buildings. Those familiar will also know that the nearest grocery is several miles away.

For a nearby library, it lists Robert F. Walters Digital Library, which is a specialized geological library costing $1,500 per year to use — over the internet.

For a drug store, it lists Rx Doctor’s Choice, which is a specialty store selling oral chelation treatments. It’s nothing at all like a general-purpose drug store. One of those is nowhere nearby.

Sedgwick County projected employmentSedgwick County projected employment, according to planning firm Goody Clancy. This excerpt starts with 2009.

Some claims and evidence just don’t make sense. A slide titled “The Sedgwick County economy is projected to grow” contained a graph that, while showing a projected increase in employment for the next few years, becomes flat for many years. This slide was used twice in different presentations.

Some of the most specific information about Wichita was contained in the residential and hotel market presentations. Regarding the hotel market — the presentation is available at the WDDC website — the preliminary conclusions are: there is market to support additional hotel rooms downtown, limited service hotel niche is a near term opportunity, cluster hotels in mixed-use, pedestrian-oriented environments, and to maximize leverage, locate hotels near convention center.

The residential market findings are not available online at this time, but the main finding is that downtown Wichita should be able to support 1,000 new residential units over the next five years, about 200 new units per year. The mix, according to the presenter, should be 134 rentals, 48 condominiums, and 18 live-work spaces. Rental prices would range from $400 to $2,100, while purchase prices would range from $150,000 to $400,000.

Some speakers from Goody Clancy revealed a condescending attitude towards those who hold values different from this group of planners. One presenter said “Outside of Manhattan and Chicago, the traditional family household generally looks for a single family detached house with yard, where they think their kids might play, and they never do.”

Regarding office buildings, walkability again was a theme: “We need to offer an urban product. What we do not need is a large office building surrounded by a sea of parking and call that a downtown office building.” But parking and transit linkages are important, the presenter said.

The presenter on retail topics had been in Wichita only once for a period of four days — “not a lot” by his own admission. His presentation was mostly generic and could have been presented at any city.

In his closing remarks, Dixon noted that there was no disagreement among the presenters and panelists, except in one case over parking, and that really wasn’t a disagreement after all. He also said that the presentation tonight was not just an infomercial for downtown, but a presentation of data about our markets.

In the short time devoted to questions from the audience — about ten minutes from a two hour meeting — several questioners wasted much time delivering their own personal stories instead of asking questions.

One question asked about cooperation between the downtown planning effort and a committee working on homeless issues. The answer by Dixon was noncommittal.

Another question asked about the use of eminent domain and the use of public subsidy. Dixon replied that eminent domain has been used and misused, and is much less available at this time. Regarding public investment — and he stressed the word “investment” — he said this is a market-driven effort, and there will be a role for public investment. The kinds of public investments are still to be determined, he said.

The fact that these investments are still to be determined is unsettling. Downtown revitalization boosters promote ratios of up to fifteen to one of private investment to public investment. This is after a decade of public investment in downtown Wichita has produced private investment approximately equal to public investment. If Goody Clancy has a method of going from one to fifteen, it wasn’t revealed at this meeting.

It’s starting to be revealed that the fifteen to one returns will be realized after “critical mass” is achieved. It appears that public investment will be at the front, with private investment blossoming later — according to plans. As there is no definition of what constitutes critical mass, any criticism can always be deflected by claiming that that mass has not yet been achieved.

Dixon is correct in that the use of eminent domain is more restricted than in the past. But in Kansas, the threat of its use is still available, and may be as effective as its actual use.

After the event I received feedback from two residents of Wichita who are skeptical of downtown planning. One said “I thought the answers to questions they gave were very generic and broad. Answers that could have applied to any city or town anywhere.”

Another made an observation about the composition of the discussion panel members: “Something else I observed was that the panel existed of mostly those that seem to be already on the ‘in’ when it comes to elected officials in the city. Now I recognize that there are two ways of looking at this situation. People can be insiders either because they are active in developing downtown and are the ‘go to’ guys, or they are developing downtown because they are insiders and know where the money is to get the projects done to line their pockets. I really do not care which is the case with the people that are on the panel, but to me I just wish that there was a larger pool of people that the WDDC and Goody Clancy chose from to sit on the panels.”

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.

WaterWalk deal not good for city, public policy

Remarks to be delivered at the January 12, 2010 meeting of the Wichita City Council.

Mr. Mayor, members of the council:

There are several aspects of the proposed hotel in the WaterWalk development that I find troubling.

Perhaps most important to public policy, the city has now recognized that when it provides subsidy to one business, it may harm other businesses. As you may recall, I’ve spoken to the council several times on this topic over the past few years. I’ve been concerned about the effect on privately-owned businesses and the willingness of entrepreneurs to assume risk only to find themselves competing with a subsidized business. The city has shown little concern for this.

But now that a city-owned business — the Hyatt Hotel — may be imperiled, the effects of city subsidy on competition is now a concern. It’s only now that city hall is measuring the harmful effects of its actions.

This is a slap in the face of all businesses in the city that have faced competition from a city-subsidized competitor. In particular, there is a Holiday Inn and Suites just three blocks away from the proposed hotel. Will the city survey to see if this hotel will be harmed by a subsidized competitor?

Then, why are we settling for such a low rate of return on this project? Promoters of public investment in downtown Wichita like the Wichita Downtown Development Corporation are promising returns of up to 15 to one for future projects. The agenda report for this proposed public investment indicates a benefit to cost ratio of 1.77 to one for the City of Wichita.

Are these two indicators measuring the same thing? If so, why are we about to make an investment with a return of less than two to one, when much higher returns are promised after the planning for downtown revitalization is complete?

I’m also concerned about the economic viability of this project. If we want to have robust development that has deep roots, grounded in solid financials and free market capitalism instead of crony capitalism, we need to turn away from highly subsidized ventures like this proposal. Relying so extensively on public subsidy creates development with shallow roots.

An example of this is the problem the city is currently experiencing with the Broadview Hotel. This hotel was scheduled to be renovated by its new owners. The purchase and renovation were to be made possible by large subsidies by the city. Tax credits from the state were to play a large part, too. But last year when the state realized that it couldn’t afford these tax credits, it placed a lid on them, and now the Broadview renovations are on hold.

There are a few specific questions about this project that need answers. We need to see a development budget for this hotel. It appears that the cost will be around $100,000 per room. I’ve been told this cost is high for this type of hotel.

We also need to have more information about how much of their own money the developers are putting into this deal. Also, I think citizens would like to see the details of the ground lease and the parking arrangements.

Although the governor didn’t mention this last night, there’s movement in Topeka to limit or eliminate tax exemptions, including sales tax exemptions such as planned for this hotel. Is the city confident it can secure the planned sales tax exemption?

Waterwalk hotel deal breaks new ground for Wichita subsidies

On Tuesday, the Wichita City Council will consider an agreement with a hotel developer that, besides awarding the usual subsidies to politically-favored developers, breaks new ground in the use of subsidy. Additionally, the deal contradicts recent promises made by a top city official.

The proposed hotel, a Marriott Fairfield Inn and Suites Hotel, would be located immediately south of the WaterWalk Place condominium building, at the northwest corner of Dewey and Main Streets.

Site of proposed hotel at Dewey and Main Streets, Wichita 2010-01-10 02
Site of proposed hotel at Dewey and Main Streets. View is looking northeast. WaterWalk Place is the large building at the left. The Intust Bank Arena can be seen in the distance.

Information from the city’s Office of Urban Development indicates these subsidies are proposed for the hotel developers:

  • The city will provide a cash contribution of up to $2.5 million to help pay for building the hotel.
  • The city will create a Community Improvement District to benefit the hotel. Community Improvement Districts, which are a creation of the Kansas Legislature last year, allow a district to charge up to an additional two percent in sales tax. The proceeds from the tax are used for the exclusive benefit of the developers.
  • The project will use Industrial Revenue Bonds. The usual benefit of these bonds is the accompanying property tax exemption. But since the location of the proposed hotel is within a TIF district, this benefit doesn’t apply. Instead, in this case the benefit of the IRBs is that the hotel will escape paying an estimated $328,945 in sales tax.
  • The city will lease the land under the hotel for $1.00 per year, for a term of 99 years. There is a provision that if the hotel performs very well financially, the city will be entitled to additional rent.
  • The hotel will be able to use the WaterWalk Place parking garage for its clients. There is a provision to install a gate so that some parking spaces will be available only to hotel guests and condominium owners. The value of this parking to the hotel developers is huge.

There is a contingency. The city will conduct a study to determine the impact of the proposed hotel on the financial performance of the city-owned Hyatt Regency Hotel that is located nearby. If the study shows a negative impact on the Hyatt, the city “may rescind the Letter of Intent and halt development of the hotel.”

Analysis

This proposal is perhaps the most egregious example of corporate welfare to be proposed to the city council, and one that should be rejected. There are many areas of concern.

Holiday Inn and Suites, Wichita 2010-01-10 07The Holiday Inn and Suites near the proposed hotel. Will the city conduct a survey to see if this hotel will be harmed?

Perhaps most important to public policy, the city has now recognized that when it provides subsidy to one business, it may harm other businesses. This is something on which I’ve written extensively, and I’ve spoken to the council several times on this topic. I’ve been concerned about the effect on privately-owned businesses. The city has shown little concern for this.

But now that a city-owned business — the Hyatt Hotel — may be imperiled, all of the sudden the effects of city subsidy on competition is a concern. This is a slap in the face of all businesses in the city that have faced competition from a city-subsidized competitor. In particular, there is a Holiday Inn and Suites just three blocks away from the proposed hotel. Will the city survey to see if this hotel will be harmed by a subsidized competitor?

There’s also the credibility of the people involved in this deal. The new owner of the WaterWalk development, Jack DeBoer, was quoted in a Wichita Business Journal article in November saying “I don’t want any more money from the city.”

In the same month the Wichita Eagle quoted him saying “I’m not going down to City Hall with my hand out. I can’t. The city has put their money in it, and I’m happy with that. We’ve put a lot of our own money in and that’s OK. Now, time to deliver.”

DeBoer isn’t going to own the proposed hotel. But it’s part of the WaterWalk development that he owns.

More troubling is the turnaround by Wichita City Manager Robert Layton.

In October the Wichita Eagle reported: “Layton was clear earlier this week: No more city money is available for WaterWalk.” Other Eagle articles quoted Layton stating “We don’t have any other resources to put in.”

Now the city is proposing huge and unprecedented subsidies for this hotel.

The cost of this hotel needs to be questioned, too. The projected cost divided by the number of rooms comes out to around $100,000 per room. I’ve been told that this is very expensive for a hotel of this type. While not a cut-rate budget hotel, this Fairfield Inn won’t have a restaurant. In my experience, they don’t have bars or comfortable lobbies.

If we want to have robust development that has deep roots, grounded in solid finances and the discipline of free markets instead of crony capitalism, we need to turn away from highly subsidized ventures like this proposed hotel. Relying so extensively on public subsidy results in development with shallow roots. As an example, the city is currently facing a huge problem with the Broadview Hotel. This hotel was scheduled to be renovated by its new owners, the purchase and renovation made possible by large subsidies by the city. Tax credits from the state were to play a large part, too. But last year when the state realized that it couldn’t afford to be so lavish with tax credits and placed a cap on them, the Broadview renovations were put on hold.

There are many questions about this project that need answers, and I’ve submitted a few to the city. From a public policy standpoint, the problem is that citizens have a very short time in which to ask questions and receive answers. The document that details the proposal appears to have been created at around 5:00 pm on Thursday January 7. The city council meeting is on the next Tuesday morning. There just isn’t time for citizens and journalists to submit questions and get answers. Performing any independent investigation in such a short time is nearly impossible.

The developers who are in line to receive millions in subsidy, however, have been working with the city on this matter for much longer. There’s a reason why this work is done in secret: Citizens ought to be outraged at this deal. Better to give them little time to object.

Letter of Intent Relating to Development of WaterWalk Hotel 2010-01-12

Wichita’s economic development strategy: rent seeking

As Wichita embarks on our planning for the revitalization of downtown Wichita — or as we look back at actions the Wichita city council takes almost every week — we ought to take a look to see if these actions produce an increase in wealth for our community.

It is wealth, after all, that defines prosperity. Our goal ought to be to create an environment where everyone lives in an environment conducive to creating prosperity and wealth. But in a misguided effort, our city leaders, week after week, take actions that produce just the opposite.

The revitalization of downtown Wichita is likely to further harm the economic environment in Wichita. That’s because counterproductive measures such as tax increment financing districts and a sales tax are likely to be necessary to implement the plan.

What’s wrong with these actions? Simple: They’re rent seeking activities. They don’t produce wealth.

The term rent, or more precisely, economic rent is somewhat unfortunate, as the common usage of the term — paying someone money for the use of an asset for a period of time — contains no sinister connotation. But economic rent does carry baggage.

So what is rent seeking? Wikipedia defines it like this: “In economics, rent seeking occurs when an individual, organization or firm seeks to earn income by capturing economic rent through manipulation or exploitation of the economic environment, rather than by earning profits through economic transactions and the production of added wealth.”

This explanation doesn’t do full justice to the term, because it doesn’t mention the role that government and politics usually play. The Concise Encyclopedia of Economics adds this: “The idea is simple but powerful. People are said to seek rents when they try to obtain benefits for themselves through the political arena. They typically do so by getting a subsidy for a good they produce or for being in a particular class of people, by getting a tariff on a good they produce, or by getting a special regulation that hampers their competitors.”

It’s thought that Wichita needs to dish out economic development subsidies so that we can attract new companies to our town, or, as is often the case, retain existing companies. So we grant special tax treatment — usually through industrial revenue bonds, but also in other ways — to these companies. Or sometimes we may dispense with the cumbersome IRB process and simply give companies money, or make loans that don’t need to be repaid.

These benefits — representing economic rent and rent seeking behavior — are great for the lucky companies that received them. But what about considering the city or region as a whole? In that case, something different emerges. Here’s an excerpt from “Rent Seeking and Economic Growth: Evidence From the States,” Harold J. Brumm, Cato Journal, Vol. 19, No. 1 (Spring/Summer 1999):

The present study finds the growth rate of real gross state product (GSP) per capita to be negatively correlated with the initial level of real GSP per capita, the burden of state tax structure, and — most notably — the level of rent-seeking activity in the state. On the basis of the estimates obtained for the standardized coefficients of the explanatory variables in the growth rate equation, the conclusion reached here is that rent-seeking activity has a relatively large negative effect on the rate of state economic growth. An implication of this finding is that a state government which promulgates policies that foster sustained artificial rent seeking does so at considerable expense to its economic growth.

In simple terms, rent seeking activity harms economic growth.

This study also states: “The private returns of rent seekers come from the redistribution of wealth, not from wealth creation. The tax that rent seeking imposes on the productive sector reduces the output growth rate by reducing the incentives of entrepreneurs to produce and innovate.”

This study looked at state governments and their activities, but there’s reason to suspect that the findings apply to cities and counties, too.

So should we simply give up and not grant preferential tax treatment and other subsidies to companies to induce them to locate in Wichita? No. Instead, as I’ve outlined in Wichita universal tax exemption could propel growth, we should offer preferential tax treatment to all new investment in Wichita.

A broad policy like this, where everyone benefits, eliminates the harmful effects of rent seeking. All companies can benefit, not only those that fit into certain categories or make special pleadings to politicians or bureaucrats. All companies can plan with certainty on receiving the benefit — there won’t be the risk whether the city council and bureaucrats will approve the benefit.

This is the type of policy we should follow to increase economic growth in Wichita.

Oklahoma City sales tax passes; model for Wichita

On Tuesday, voters in Oklahoma City passed a new sales tax to fund downtown improvements. It passed by a vote of 54 percent to 46 percent.

The tax will be used to fund improvements such as a 70-acre downtown park ($130 million), a new convention center ($280 million), mass transit initiatives ($130 million), health and wellness aquatic centers for senior citizens ($50 million), and other things.

The tax was promoted as not really a “new” tax, as it is timed to replace an existing tax of the same amount that is expiring.

Wichita’s plans for downtown revitalization will need some sort of funding, and the Oklahoma City tax — its name is MAPS 3 — has been promoted by John Rolfe, President and CEO of Go Wichita Convention & Visitors Bureau, as “interesting.” Other downtown leaders have spoken favorably of a sales tax for funding downtown improvements.

Wichitans can count on a similar sales tax being proposed for whatever projects the year-long downtown planning process calls for. Oklahoma City’s experience will surely be used to promote a similar tax in Wichita.

Jeff Fluhr updates status of downtown Wichita

Last Friday, Jeff Fluhr, president of the Wichita Downtown Development Corporation, addressed members and guests of the Wichita Pachyderm Club. His topic was the future of downtown Wichita and its revitalization.

“It’s very important that we have a downtown that is very clear and very concise on where it wants to go,” he said. He likened the development of downtown to the planning of an automobile trip, so that we don’t make major investments that we later regret.

The potential of increased private investment is an important goal for downtown. Predictability will help the private sector invest, he said.

As to the importance of downtown, he said that is where the distinctive quality of a city is found — its history, cultural arts, and other institutions that represent the community. Tourism is another goal of a revitalized downtown Wichita, along with an improved perception in the global market as a great place to do business.

Old Town is an example of success in Wichita, he said, an example of what can be done when people are creative and purposeful. He said that Wichita’s transit center, being located near the new Intrust Bank Arena, provides the potential to use mass transit.

As to the economics of downtown Wichita redevelopment, he showed a chart, nearly a year old, that compares public and private investment in downtown over the past ten years. The two amounts are nearly equal to each other. Fluhr said that Goody Clancy, the firm hired to to plan the revitalization of downtown Wichita, has offered the opinion that the way Wichita has measured investment in downtown — using capital investment only — is not an accurate picture. We should also take into account companies that may have moved into the downtown area because of the improvements that have been made. What types of jobs have been created, and what is the spin-off from them?

Addressing the WaterWalk project, he said that an important event took place last November, when people started moving in to the residential building. Now we see human activity in the development. The landscaping is being installed at this time.

Along Douglas, Fluhr said that gaps in the buildings are a problem. We need to bring storefronts back to downtown. This creates an atmosphere of walkability, which helps to bring residential back to downtown, an important thing he said we must continue to work on.

Mentioning the Q-Line, the free trolley bus service, Fluhr said that “we’ll literally have a couple thousand people that can be on this thing in a given night.”

Besides downtown, Fluhr said that they’re also looking at “first-ring” neighborhoods, the areas that surround downtown. In response to a question, he said we need a healthy city throughout. The first-ring neighborhoods may provide housing that is more affordable than in downtown proper.

Analysis

In comparing the planning of downtown Wichita to a car trip, Fluhr made the same presumption that Wichita city council member Lavonta Williams made when she compared downtown planning to planning her lessons as a schoolteacher. The planning of even a small portion of a city is an immensely more complicated task. That these two figures make such comparisons leads me to believe that we don’t understand the monumental scope of the task we’ve decided to undertake.

Regarding predictability being important to private sector investors: the planning process right now has created huge uncertainty as to the future of downtown. Who is likely to invest in downtown at this time, when so much is up in the air?

Further, the potential use of eminent domain to take property creates uncertainty, too. This is why it is important for the city to swear off the use of eminent domain, and even the threat of its use.

There’s also this concern I have about the predictability Fluhr said is needed for private investment to flourish: For the future to be certain, someone has to enforce the plans that have been made. All the methods that government has to enforce or encourage human behavior lead to loss of economic freedom: incentives, grants, tax abatements, subsidies, regulation, zoning, eminent domain, preferred treatment. All are contrary to economic freedom.

It’s also troubling that now we’re going to be measuring the economic impact of public investment in a new way, using — if I can read between the lines a bit — things like “multipliers” and other economic development jargon and devices to exaggerate the impact of public investment. It’s important to remember that when left to their own devices, Wichitans have made investments that have produced tremendous economic impact with their own multiplier effects. These investments, however, have not always been made in the politically-favored downtown area. Instead, they’re been made where people wanted them to be made, so their economic impact, in terms of creating wealth and things that people really want, has been greater than if directed by government planners.

As to the Q-Line claim of thousands of riders in a night, I hope Fluhr meant the potential capacity of the Q-Line system, as its actual ridership is much less and very expensive on a per-rider basis. See Wichita’s Q-Line an expensive ride for ridership numbers, which have been less than 1,500 per month.

It’s impossible not to appreciate Mr. Fluhr’s enthusiasm for his work and his genuine concern and vision for the future of downtown Wichita. I’m concerned, however, that Fluhr and the downtown Wichita revitalization boosters — let’s call them the “planners” — have fallen victim to what Randal O’Toole and others call the design fallacy.

O’Toole explains in his book The Best-Laid Plans: How Government Planning Harms Your Quality of Life, Your Pocketbook, and Your Future:

These planners are guilty of believing the design fallacy, the notion that architectural design is a major determinant in shaping human behavior. While design does play a role at the margins of certain things — for example, certain patterns can make housing more vulnerable to crime — the effects that planners project are often highly exaggerated.

Later O’Toole writes:

The worst thing about having a vision is that it confers upon the visionary a moral absolutism: only highly prescriptive regulation can ensure that the vision overcomes an uncaring populace responding to a free market that planners do not really trust. But the more prescriptive the plan, the more likely it is that the plan will be wrong, and such errors will prove extremely costly for the city or region that tries to implement the plan. … Problems such as these stem from the design fallacy that is shared by so many planners and the architects who inspire them.

Do the Wichita planners suffer from the design fallacy? Fluhr mentioned “engagement of the river” as he has in past talks. Referring to a conversion of an old school building into residential use, he used language like “a dynamic living space in a renovated school,” “each of the units is unique,” and “taking distinctive architecture to us and bringing it to new use.”

Referring to our Carnegie Library, he said that its architecture is unique to Wichita, and wouldn’t be found in other cities. Projects like this, along with the Broadview Hotel and Union Station, should “remain in our fabric” as part of the “distinctive qualities that make us who we are.”

This focus on the architecture of buildings in a city is characteristic of past talks by Fluhr. So yes, I believe that he and the planners are influenced by the design fallacy. It’s something we’ll have to watch out for as we proceed with the planning process.

Kelo abandonment holds lesson for Wichita

In New London, Connecticut, developers wanted to build a new business complex on land owned by a number of homeowners, including Suzette Kelo. She didn’t want to sell, and the case eventually wound its way to the United States Supreme Court. In the decision, the court ruled in favor of the ability of cities to use eminent domain to take property from one party and give to another private party for economic development.

Locally, at least one Wichita bureaucrat was relieved. According to Wichita Eagle reporting:

City economic development director Allen Bell lauded the Supreme Court decision.

“I’m relieved to know that we’ll continue to have an important tool for implementing economic development and urban redevelopment projects here in Wichita,” Bell said. “But this is a tool we do not use lightly. The city of Wichita has never sought to use eminent domain except in very rare cases when there is no alternative to keep a project alive and further the overall needs of the city.”

So what has happened in New London? Nothing. In fact, worse than nothing, as the planned development has been abandoned. Paul Jacob of the Citizens on Charge Foundation gives an excellent wrap-up of the situation in The politics of government usurpation, post-Kelo.

Eminent domain was used to assemble the property where the WaterWalk development stands in downtown Wichita. This development is emblematic of the failures of public-private partnerships. Is its failure the result of its foundation built on eminent domain?

As Wichita prepares its plans for downtown revitalization, freedom-loving citizens need to insist that the city forgo the use of eminent domain, especially the threat of its use. On its face, it appears that Kansas has a strong law prohibiting the type of eminent domain takings that the Supreme Court authorized in the Kelo decision. Kansas law says that the legislature must pass a law allowing the use of eminent domain on a specific parcel of property, if the purpose is to give it to another private party.

But it is the threat of the use of eminent domain that remains the real problem. We can easily imagine a scenario where the City of Wichita decides it needs a parcel of property for some public-private use. Mayor Carl Brewer may make the case that the property is needed so that Wichita can create hundreds, perhaps thousands of jobs. The economic future of our city hangs in the balance, he’ll say. Dale Goter, Wichita Governmental Relations Manager, will make the case to legislators that Wichita really needs the property. By the way, legislator from Overland Park, won’t your city also want to use eminent domain someday?

The poor property owner, who in the past would have been faced with a small battle in the Kansas district court, now has to lobby the entire Kansas legislature to protect his property.

This is why it is important for Wichitans to insist the the plans for downtown Wichita revitalization specifically state that eminent domain — not even its threat — will be used.

This summer I traveled to Anaheim, California to learn about a redevelopment district where the city decided not to use eminent domain. The article Anaheim’s mayor wrote about this planning effort is titled “Development Without Eminent Domain: Foundation of Freedom Inspires Urban Growth.” It’s very informative.

Carlos Mayans addresses state and local issues

Last Friday immediate past Wichita mayor Carlos Mayans addressed members and guests of the Wichita Pachyderm Club.

Speaking of his experience as a member of the Kansas House of Representatives, Mayans said that Kansas state spending must be brought under control. Having served under governors from both parties, he said that Republicans spend as much as Democrats. Some people change after they get elected, he said, acting differently in office from how they campaigned. It’s important to hold these people accountable.

Turning to Medicaid, Mayans said the federal government requires a certain minimum level of coverage. Then, there are 33 optional things that states may decide to cover. Kansas offers 23 of these. Further, the health care bill in the Senate will expand the number of people that are eligible for Medicaid.

On local issues, the City of Wichita has some challenges ahead, he said. Our local governments are spending too much money with very little accountability to the taxpayers and that tax increases will be suggested to balance the budget.

Mayans corrected the record over allegations that his actions drove away a Bass Pro Shops store from the struggling WaterWalk development in downtown Wichita. Mayans said that he cut $3 million from a $33 million project: $2 million from the parking garage, and $1 million from the canal. The cuts to the canal made it not as deep and enabled it to be heated in winter, he said. Nothing else was cut by his administration, but now the project is $42 million. Noting the current state of the project, Mayans asked: “And has anything else happened? No.”

He also reminded the audience that council members Paul Gray, Sue Schlapp, and now-mayor Carl Brewer voted for this plan.

Mayans said he can understand WaterWalk developer Jack DeBoer’s frustration. At one time DeBoer wanted to tear down the Wichita Boat House to make room for new development. Mayans advised his that the people of Wichita would not go along with this plan, but DeBoer wouldn’t listen.

There’s also been talk of shifting the plan for WaterWalk to a “civic center,” to include non-profit organizations and museums. Mayans said this would be contrary to the original intent of the city and its representation to taxpayers when the city acquired the land.

Furthermore, he said that the financing of WaterWalk, because it is based on tax increment financing and sales tax anticipation districts, requires property and sales taxes to be paid in order to fulfill the bonds. Non-profit organizations don’t pay these taxes, so the result would be a continual need for subsidy by the city.

In answering a question, Mayans said that private developers from out of state have looked at making their own, private investment in downtown Wichita. But the city bureaucracy rejected this effort. Mayans also mentioned the The Cordish Companies of Baltimore (developers of the Power & Light District in Kansas City) as possible development partners in WaterWalk. But Mayans said that Cordish doesn’t like to be involved in projects where the public sector is involved, as there is too much red tape. Also, WaterWalk developers didn’t want outsiders being involved.

Regarding city council members and the part-time nature of the job, Mayans said that here are at least one or two council members who don’t show up until the day of the council meeting. Then they pick up a packet that may be five hundred pages long.

On Wichita’s future water needs, Mayans said that Equus Beds Aquifer Storage and Recovery project currently under development has never been tried anywhere else. He said that Wichita should build another lake instead. Wichita sells water at high rates to surrounding cities, he said, and uses this to curtail economic development in other communities.

Downtown development chief to address Pachyderms

This Friday, the Wichita Pachyderm Club presents Wichita Downtown Development Corporation president Jeff Fluhr. The topic is “Downtown Wichita’s Renaissance.”

All are welcome to attend Pachyderm club meetings. The program costs $10, which includes a delicious buffet lunch including salad, soup, two main dishes, and ice tea and coffee. The meeting starts at noon, although it’s recommended to arrive ten minutes early to get your lunch before the program starts.

The Wichita Petroleum Club is on the ninth floor of the Bank of America Building at 100 N. Broadway (north side of Douglas between Topeka and Broadway) in Wichita, Kansas (click for a map and directions). Park in the garage just across Broadway and use the sky walk to enter the Bank of America building. Bring your parking garage ticket to be stamped and your parking fee will be only $1.00. There is usually some metered and free street parking nearby.

Uncertainty over Broadview’s future doesn’t bother Wichita

Yesterday the Wichita City Council approved plans for riverbank improvements that would benefit the Broadview Hotel in downtown Wichita. The cost is $2,200,000.

One of the problems with this action is that the renovation of the hotel is on hold, according to recent reporting. The reason given by the hotel’s owners, Drury Southwest Inc., is a problem with tax credits issued by the State of Kansas.

These tax credits, which are in effect a free grant of money to the hotel’s owner that does not need to be repaid, could potentially be worth 25% of the renovation project’s budget of $19 million. That’s up to $4,750,000 that the taxpayers of the state would be giving to the hotel owners.

This year the Kansas legislature realized that these tax credits are costly to the state, and facing a very tight budget, it placed a cap on the amount of tax credits that could be given.

By all accounts, the legislature will be facing an even tougher situation in January when it returns to the statehouse for its 2009 session. With everyone scrambling to find cost savings (and new sources of revenue), the tax credits for historic renovation could face an uncertain future.

How does the uncertainty surrounding the tax credits affect the plans for the Broadview’s renovation? I don’t know. A telephone call and email message to Drury Southwest Inc. seeking an update on its plans was not returned.

In his remarks after the unanimous vote passing the improvements, Mayor Carl Brewer thanked representatives from Drury for attending the meeting. He noted the budget challenges at the state level, and pledged that the city will continue to work with them on the tax credits. He said he appreciates the work they’re doing and thanked them for their commitment to the city. The hotel is important to the city, he said, as commitments have already been made to lease rooms in the Broadview.

Analysis

Because of the uncertainty surrounding the future plans for the Broadview Hotel’s renovation, the city should have delayed these riverbank improvements.

A problem is the shaky economics surrounding this hotel. Besides the tax credits, the hotel received a 10-year exemption from paying property taxes and a sweetheart deal on a parking garage across the street. It’s little wonder representatives from Drury traveled to Wichita for the council meeting. They have a lot of taxpayer subsidies to protect.

If we want a thriving and vibrant downtown Wichita — including a convention hotel that can be relied on — we need to rely on something more than massive taxpayer subsidies and the mayor’s appreciation to those who receive them.

If Wichita truly seeks community input in downtown planning …

As Wichita begins to plan for the revitalization of downtown Wichita, city leaders say they want everyone to be involved. All ideas are welcome and appreciated, they say.

In a recent city council meeting, Mayor Brewer said “we need every person’s ideas, recommendations, and their opinion. … Being quiet and then complaining about it later isn’t going to be good for you or the community.”

Recently Wichita Downtown Development Corporation president Jeff Fluhr said “We want to make sure we do a holistic outreach with this project.”

I wonder if they — especially Mayor Brewer — really mean it. In the past Brewer said “The naysayers have gotten too much media attention while those who are engaged and do the hard work are too often ignored and criticized.” Just last week he was quoted in the Wichita Eagle as saying this: “We cannot be intimidated. … I know for a fact that the citizens of Wichita believe we should do what we need to do to accomplish this. …We need to take a bold stance. If they’re not right and they’re not telling the truth, then create an environment where we can get the message out.”

The mayor sends out conflicting messages.

Here’s what Mayor Brewer and the Wichita Downtown Development Corporation could do, if they’re really interested in public engagement and hearing from all citizens, no matter what their ideas might be: The city could sponsor a one-day forum where alternatives to the top-down, centralized method of government planning are presented. I think we could do this with a budget of maybe $10,000 or so. That’s just two percent of the amount we’re spending on the Goody Clancy plan. When you add the budget of the WDDC and what the staff in Wichita city hall are spending on this effort, it’s a mere pittance.

There are some very interesting speakers that are willing to come to Wichita and present their ideas. One is Cato Institute policy scholar Randal O’Toole, author of the book The Best-Laid Plans: How Government Planning Harms Your Quality of Life, Your Pocketbook, and Your Future.

Will those in charge of Wichita’s future consider sponsoring a forum where alternatives are expressed? The answer to this will let us know just how much they value alternative opinions, and if they’re willing to back up their words with action.

Wichita downtown Q-Line an expensive ride

On the first Friday in June — that’s the outdoor music night in Old Town Wichita — I went downtown. One of the things I did was to ride the Q-Line. That’s the free trolley or shuttle bus that provides service in Old Town and downtown, including Exploration Place.

Wichita Q-Line riders and costWichita Q-Line riders and cost

I rode the entire route, and I was the only passenger. So I got to wonder about ridership and costs.

The Q-Line service has been offered three nights per week, Thursday through Saturday. In early October it started operating six nights a week after Sedgwick County added some funding.

For the May though October season, the City of Wichita committed $66,000, or $11,000 per month, to run the Q-Line. The Wichita Downtown Development Corporation agreed to spend $20,000 marketing the service.

Considering only the $11,000 per month of operating costs, you can see that the cost per rider is quite high. Most months it’s around eight dollars or so, and much more in some months.

If two or three people traveling as a group get on the trolley, the cost becomes much more than a taxi ride anywhere in downtown — or across town, for that matter.

The problem with the high cost per rider on the Q-Line is representative of the high cost of public transit and the huge subsidies it requires to function. According to Michael Vinson, Director of Transit for the City of Wichita, for the city’s regular bus service, fare-box revenue covers 22.5% of operating cost. The remainder is paid for by grants from local, state, and federal government.

So those who might think that the $1.25 fare to get on a city bus is a good deal might want to realize that their contribution to the fare box is matched by $4.30 from other people.

And that’s for operating costs only. It doesn’t include capital costs.

As we move forward in the planning for the revitalization of downtown Wichita, transit is always mentioned as a central component. Hopefully we’ll be able to get the cost per rider down to a reasonable figure. Wichita hasn’t shown the ability to do that so far.

City council members on downtown Wichita revitalization

At the meeting of the Wichita City Council last week, several city council members gave their reasons for supporting the planning for the revitalization of downtown Wichita. It’s worthwhile to take a look at two members and their remarks.

Council member Janet Miller spoke first. (Click on Wichita downtown planning proposal: Janet Miller for video.)

“We’ve given the free market a chance in downtown,” Miller said. There’s a few things we can disagree with in this statement. First, the market downtown is not very “free.” There are TIF districts overlaying much of downtown, for example. These TIF districts are an example of government interventionism in the extreme, something quite different from free markets.

Besides this, Miller frames the decision incorrectly. To her, downtown redevelopment is something that must happen, and since people haven’t responded to this decree very well, that’s a failure of the market. But the correct decision point is when people and business decide to be downtown or somewhere else. That’s where we see free markets in action and the decisions people make. Because they make decisions other than what Miller wants them to make, that doesn’t mean that free markets have failed. Instead, people have simply made a decision other than what she believes is the correct decision.

She also said this: “Without incentives, the free market just doesn’t work.” To which I say: “Where there are incentives, markets are not free.” That’s government interventionism. It’s axiomatic.

Then, there’s this quote from Miller: “Just like the human body cannot succeed with rot at its core, neither can a city be healthy with rot at its core.” Variations on this nostrum are constantly repeated by government-subsidized downtown revitalization supporters. This analogy is meaningless. I’ve asked the city to supply evidence of this — something more authoritative than the mayor’s vision and dreams — and so far none has been supplied.

Regarding public and private investment in downtown Wichita: A document published earlier this year showed that public and private investment in downtown Wichita over the past decade is nearly even, or about a one to one ratio. Now Miller says: “I’ve heard the city manager talk about moving us toward a return more in the neighborhood of 15 to one, private contribution to public.”

So has something new been discovered in the last ten years that allows public-private partnerships to reap such fabulous rewards? It doesn’t seem likely.

Furthermore, if it is possible to achieve such impressive results from public investment, why is this our goal only now? Shouldn’t we have had this goal earlier? Is this an example of the incompetence of previous city councils, of which Mayor Brewer has been a member for many years?

Council member Lavonta Williams, in her remarks, said that we must have a plan, comparing the planning of downtown revitalization to planning her classes when she was a schoolteacher. (Click on Wichita downtown planning proposal: Lavonta Williams for video.)

“Without a plan, there is chaos,” she said, noting that some people think that the things we’ve done downtown may be chaotic. “Hopefully this bond will bring us all together. … Downtown is everybody’s community, but it’s not going to be if you don’t have everybody buying in to what’s going on.”

She urged citizens to attend meetings so that their comments are validated.

William’s analogy — downtown planning and running her classroom — is not meaningful. There’s simply no comparison between the two. One is a highly structured situation, while the other is a problem of immense complexity with very little structure. My post Planning downtown Wichita revitalization: an impossible task? summarizes some of the characteristics that make planning such a difficult task. Deluding ourselves that the task is as simple as Williams posits is a sure path to failure.

Then, I have some news for Williams: not everyone is going to buy in to these plans and the huge public subsidies that will accompany them. We’re not all going to come together on this. As council member Miller recognized in her remarks: “There’s a great variety of opinions on this subject.”

Low NBA attendance in Wichita danger sign for Intrust Bank Arena

The Intrust Bank Arena management firm SMG must be wondering what it bit off in Wichita. Last night NBA professional basketball players put sneaker to floor in Wichita for the first time in 14 years, and only an estimated 8,000 fans showed up. (Estimate is by the Wichita Eagle.)

The game was held at the Charles Koch arena on the campus of Wichita State University. That arena has a capacity, according to the goshockers website, of 10,400.

Wichita downtown arena boosters told voters that if we passed the tax, we’d have lots of events like this, and lots of fans would attend. But in this trial run of big-time professional sports in Wichita, the fans that did attend would fill barely more than half of the new downtown Wichita arena.

Arena apologists are likely to come up with a variety of excuses for this embarrassingly poor turnout: It was only an exhibition game. It wasn’t at the downtown arena. It wasn’t the right teams. It was drizzling rain. There will always be excuses.

The citizens of Sedgwick County are going to have to hope that the Intrust Bank Arena can do a better job drawing fans. Even though the SMG contract puts that firm on the hook for losses, that contract has a lot of ways for SMG to wiggle out, even before its five year management term expires. Ultimately, it is the Sedgwick County taxpayer who is financially responsible for the arena, and it is they who must hope for success.

Wichita planning puts freedom, prosperity at risk

Remarks to be delivered to the October 13, 2009 meeting of the Wichita City Council.

Mr. Mayor, members of the council,

I’m here today to ask this council to put aside consideration of this proposal. My reasons are not particular to this proposal or planning firm, but rather I am concerned that we believe we have the ability to successfully plan at all.

Here’s just one reason why I’m concerned: Wichita’s favorite method of financing developments is the TIF district. Recognizing this, the Goody Clancy proposal under the heading “Opportunities” mentions “Continue to employ established TIF funding mechanisms.”

But as documented by the Wichita Eagle last year, our city has a poor record of financial performance with TIF districts.

Another reason I’m concerned is that our attempts at downtown redevelopment so far have produced mixed results. In particular, the WaterWalk project in downtown Wichita has so far consumed $41 million in public subsidy, and we have very little to show for it. Shouldn’t we see if we can nurture this project to success before we take on projects that are much larger?

Then there’s the presumption expressed by city leaders that downtown must be revitalized for the sake of our entire city. Several months ago I asked Mr. Williams to supply me with references that provide evidence for the claimed benefit of downtown redevelopment. At first he referred me to the mayor’s vision statement. But with all due respect, Mr. Mayor, your visions and dreams aren’t evidence.

We do have a document that describes what’s been built in several cities. But the mere fact that buildings were built or renovated is not evidence of success. In these descriptions there’s no discussion of the cost, or the public subsidy needed to redevelop these downtowns, and importantly, no discussion of the effect on the entire city.

When we look at the effect of things like TIF districts on an entire city, we find evidence like economists Richard F. Dye and David F. Merriman found. They concluded that yes, development happens in the subsidized TIF district. But it’s often at detriment to the entire city.

Besides TIF districts, I’m also concerned about the use of other public subsidy, including a sales tax that some are talking about. I’m also concerned about the potential for eminent domain abuse. This summer I traveled to Anaheim, California to learn about a redevelopment district where the city decided not to use these techniques. The article Anaheim’s mayor wrote about this planning effort is subtitled “Foundation of Freedom Inspires Urban Growth.”

That’s what I’m really concerned about: freedom.

Why aren’t we satisfied with letting people live where they want to live? Why aren’t we satisfied with letting developers’ capital flow to where they think it finds its most valued use? Why do we think that centralized government planning can do a better job of making decisions and allocating resources than the dispersed knowledge of all the people of Wichita?

Randal O’Toole has written about the impossibility of the planning task. In his book The Best-Laid Plans: How Government Planning Harms Your Quality of Life, Your Pocketbook, and Your Future, he writes this about urban planners: “Because they can build a house, planners think they can design an entire urban area.”

He expands on the difficulty of the planning task at length in his book.

These difficulties can be summed up like this: If we think that we can plan the revitalization of downtown Wichita, we ought to heed this quote from Friedrich Hayek’s book The Fatal Conceit: “The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.”

Mr. Mayor and members of the council, our efforts at downtown redevelopment have produced mixed results at best. Yet we have a lot of development — commercial and residential — taking place in Wichita. It’s just not happening downtown. Instead, it’s happening where people want it to happen. It’s happening without TIF districts, public subsidy, or the use of eminent domain.

Why can’t we be happy with that?

Downtown Wichita parking plan at odds with revitalization goals

Currently, Wichita is struggling to find enough parking spots downtown to meet the demand expected to be created by the new Intrust Bank Arena. It’s been a contentious issue, with many Wichitans skeptical of the city’s ability to supply enough parking at prices that people are willing to pay for.

But did you know that there is likely to be fewer parking spots in downtown Wichita if the firm likely to lead downtown revitalization planning has its way?

Here are a few excerpts from the proposal submitted by Goody Clancy, the firm the city is likely to choose to lead the planning process:

Because transit, walking and biking will be viable options, less parking will be needed. … Parking policy will also unlock opportunity to redevelop parking lots … The effects of visionary choices such as increasing downtown residential development, expanding transit service, and constraining parking supplies will be investigated. … A sound and coordinated approach, encompassing economics, engineering and urban design, is needed to free up existing parking lots for redevelopment. (emphasis added)

I wonder: do city leaders know that their herculean effort to develop more parking downtown is an obstacle to downtown Wichita revitalization?

Wichita’s Waterwalk failure breeds skepticism

A recent Wichita Eagle editorial starts with this: “Seven years into a project that was supposed to give Wichita a grand gathering place full of shops, restaurants and night spots as well as offices and condos, some City Council members and citizens remain skeptical at best about WaterWalk’s ability to deliver on its big promises. … True, the skepticism to date is richly deserved.”

The editorial goes on to report that public investment in this project has risen to $41 million. I don’t know if this figure includes long-term land leases for $1 per year.

In any case, there’s little to show for this investment. Even the proposal for the redevelopment of downtown Wichita from the planning firm Goody Clancy realizes that WaterWalk is a failure:

Indeed, Water Walk might be struggling to fill its space because it has, simply put, hit a ceiling: it is focusing on food and fun, and perhaps there is room for only one such district (Old Town) in Downtown Wichita. The Arena could help in this regard, but until the publicly subsidized Water Walk is a rousing success, it might not make sense to split the pie still further.

With this glaring example of failure of a public-private partnership staring right at us in downtown Wichita, why do we want to plan for more of this? Shouldn’t we at least wait until WaterWalk is finished (if that ever happens) before we go down the path of throwing more public investment into the hands of subsidy-seeking developers?

At minimum, we ought to insist that the developers of the WaterWalk project be excluded from any consideration for further taxpayer subsidy. The WaterWalk development team: Dave Burk, Marketplace Properties, LLC; Jack P. DeBoer, Consolidated Holdings, Inc.; Gregory H. Kossover, Consolidated Holdings, Inc.; David E. Wells, Key Construction, Inc.; and Tom Johnson, CRE, WaterWalk LLC need to recognize their failure and the tremendous amount they have cost the Wichita taxpayer.

Some of these people — Burk and Wells to be specific — are partners in the failed Old Town Warren Theater TIF district. In that case, the city felt it had to make a no-interest (later becoming a low-interest) loan to protect its interests.

It’s a near certainty that the plans for downtown Wichita — at least plans as grand as revitalization supporters must be thinking of — will require massive subsidy. Already new taxes are being talked up. We don’t have a good record of protecting the taxpayers’ investment in Wichita. What makes us think we can change now?