Tag Archives: Downtown Wichita revitalization

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

Wichita city government

Downtown Wichita parking plan at odds with revitalization goals

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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 city government

Wichita’s Waterwalk failure breeds skepticism

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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?

Wichita city government

Planning downtown Wichita revitalization: an impossible task?

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At tomorrow’s meeting of the Wichita City Council, consideration of a plan for the revitalization of downtown Wichita is on the agenda. Before the city goes down this path, we ought to become aware of some of the difficulties with this type of planning.

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

He elaborates on the difficulty of the task:

Any who say they can write a comprehensive, long-range plan for a city or region necessarily presumes that

  • they can collect all the data they need about the values and costs of the land, improvements, and proposed and alternative projects in the planning area;
  • they can accurately predict how those values and costs will change in the future;
  • they can properly understand all the relationships between various parts of their region and activities in those areas;
  • they can do all this quickly enough that the plan is still meaningful when they are done; and
  • they will be immune to political pressures and can objectively overcome their own personal preferences.

What are the technical barriers to the success of planning? O’Toole lists these:

  • The Data Problem: Planning requires more data than can be collected in time for it to be useful to planners;
  • The Forecasting Problem: Planners cannot predict the future;
  • The Modeling Problem: Models complicated enough to be useful for planning are too complicated for anyone to understand; and
  • The Pace of Change Problem: Reality changes faster than planners can plan.

Are we in Wichita about to take on an impossible task?

Sedgwick county government

Welshimer files for re-election to Sedgwick County Commission

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Gwen Welshimer campaign announcement 2009-10-09Sedgwick county commissioner Gwen Welshimer files for re-election.

Today, Sedgwick County Commissioner Gwen Welshimer filed for re-election to her position as a member of the commission. Her statement is below.

Welshimer, a Democrat, is so far the only candidate in that party. There are three Republicans who have either filed or are considering filing.

Welshimer campaigned and has voted as a fiscal conservative. I asked her given your fiscal conservatism, how will these Republicans differentiate themselves from you? Welshimer said that she’s not heard their campaign platforms. They are all city people, she said, likely to support funding of downtown Wichita.

Responding to my question about the downtown Wichita revitalization planning and the likelihood of a tax to fund it, she said that we’ve given the city a $210 million economic development tool called the downtown Wichita arena. The county has also given many years of property tax incentives, both in the past and in the future. The other 19 cities in the county have not enjoyed this treatment, she said.

In 2006, Welshimer signed a pledge to not raise taxes if elected, and she has fulfilled that pledge so far. Her opponent in that election, incumbent Ben Sciortino, received the endorsement of the Wichita Eagle. Welshimer narrowly won that election, 10,081 votes to 9,941.

Analysis

Given Welshimer’s fiscal conservatism, Republican candidates will find it difficult to run to her right. Her stand against tax increment financing (TIF) districts and subsidies to downtown developers means she’s not likely to get the support of those downtown developers who thrive on taxpayer subsidy. Those people contribute heavily to political campaigns. Additionally, her support for the dismissal of Sedgwick County Manager Bill Buchanan — a position I support — puts her at odds with the Chamber of Commerce crowd. They make political contributions, too.

In this district (district 5), my analysis of a recent voter file shows voter registration runs 29% Democratic, 40% Republican, and 31% unaffiliated. (The remainder are Libertarian and Reform party registrants.)

Considering recent voters (those who voted in an election in 2008), the numbers change a bit. In this case, 30% are Democratic, 44% Republican, and 26% unaffiliated.

Welshimer’s statement

I have filed as a candidate for re-election to the 5th District Seat on the Sedgwick County Commission. I want to continue holding the line for Sedgwick County taxpayers.

At this time, center Downtown redevelopment is the number one issue for this race. I want the tax dollars paid by Southeast Wichita, Derby, and Mulvane to be used for paving roads, drainage, infrastructure, traffic controls, township assistance, and business district enhancements in District #5. The $210 million sales tax arena and decades of property tax incentives for center Downtown have been a weight around the neck of my district. I will support redevelopment of Downtown through private investment only in the future.

I want more property tax reduction. I want to pay for it with new revenues and more efficient policies.

If re-elected, I will continue to work for safe, sensible, and reasonable alternatives to a costly new jail.

The Coliseum site has the potential for 1,000 new jobs and $10 million in new revenue over the next five years. I want to work to make this happen.

I want to continue to work for the success of the National Center for Aviation Training at Jabara Airport. This is evolving into a job training destination center for employers around the world and it offers an incredible new future for Sedgwick County.

I believe in the power of progressive new ideas. I have not been a commissioner who gives in to the out-of-touch “good old boy” network.

I am ready for a rigorous campaign.

Wichita city government

Wichita sales tax likely to be proposed

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Two recent events have led me to suspect that as part of the plan for the revitalization of downtown Wichita, we’re going to see a sales tax proposed.

The first is Phillip Brownlee’s editorial in last Friday’s Wichita Eagle, which carried the title Taxes are lower than many think. While this editorial focused on property taxes, it’s easy to see this as an argument that Wichitans can bear the burden of more taxation. Softening up the electorate, so to speak.

Then, there’s this email sent to the Wichita city council and Sedgwick county commission members:

I recently received the attached information on Oklahoma City’s next plan for their downtown area. This is their MAPS program that spurred their downtown developed. I thought you might find this of interest.

http://www.okc.gov/maps3/

Sincerely,

John Rolfe
President and CEO
Go Wichita Convention & Visitors Bureau

MAPS — that’s the program that funded Oklahoma City’s downtown improvements through a sales tax, with a second version funding school projects — will be voted on in December. If approved, a 1% sales tax will raise funds for more downtown projects. This email, without saying so directly, endorses the idea of a sales tax for downtown development.

What’s the sales tax in Oklahoma City, you may be wondering? It’s 8.375%. It won’t change if the new MAPS plan is approved by the voters, as a current 1% tax will expire.

That sales tax was billed as “temporary,” and it does appear that it will expire as planned. But, city leaders are recommending approval of the new sales tax. This is similar to the sales tax for the downtown Wichita arena, when as that tax was nearing its end, Sedgwick County Commissioner Tim Norton “wondered … whether a 1 percent sales tax could help the county raise revenue.” (“Norton floats idea of 1 percent county sales tax,” Wichita Eagle, April 4, 2007)

The sales tax for Wichita is 6.3%.

City leaders are likely to use the the Intrust Bank Arena in downtown Wichita as an example of a successful project funded through a sales tax. But any assessment of the success of this project is about two years away. The fact that the arena exists is evidence of a minimum level of competence. It will be some time before we know whether the arena can support itself without being a drain on taxpayers, despite the provisions of the SMG management contract.

In Wichita, we’re going to have to be watchful. The drumbeats of new taxation have started.

Sedgwick county government

Wichita downtown arena parking promises not fulfilled

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In 2004, as residents of Sedgwick County were considering whether to vote for a sales tax to fund the downtown Wichita arena (now known as the Intrust Bank Arena and nearly ready to open), people wondered about parking.

So on a campaign literature piece, the arena supporters made this claim: “With the proposed garage structures, more than 10,000 parking spaces will be available within a three-block radius of the Arena (compared with the Coliseum’s 4,500 spaces.)”

Today, on the eve of the arena’s opening, these parking garages don’t exist.

What about surface parking spaces? According to the draft version of the parking plan submitted to the city council last week, there is “available weekday parking supply at peak of approximately 3,040 spaces within the Arena District.” That district is, approximately, a three-block radius around the arena.

The parking structures promised by arena boosters might be built. The city has approved a TIF district that surrounds the arena, and there is the potential, by my reckoning, to spend around $9 million on parking structures. But at a cost of $20,000 to $25,000 per space, this money buys 450 parking spots at most.

By the way, I learned that the number of parking spaces around the arena is likely to decrease. At least that’s the goal of one of the firms who pitched their planning services to Wichita last week. That’s because if there is development of the area immediately surrounding the arena, there won’t be room for so much parking. Travel by automobile is something to be reduced, according to most of the planners, and we should rely on transit and bicycles instead.

I realize that the arena boosters who put out this information weren’t government officials (although some may have been involved). They put out a few other whoppers, too. It’s too bad that so many citizens believed them.

Wichita city government

Goody Clancy proposal for Downtown Wichita revitalization master plan

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Last Friday a selection committee selected one company from four finalists to lead the planning effort for the revitalization of downtown Wichita. If some city leaders and a few citizen elites had their way, citizens of Wichita wouldn’t be able to see the company’s proposal document until after the city council makes a decision to follow — or not — the recommendation of the selection committee. But thanks to city manager Robert Layton’s decision, this document is now available for all to read. (Thanks also go to council member Jim Skelton, for his unsuccessful effort to release the documents.)

This proposal is available because I requested it (and paid for it) under the provisions of the Kansas Open Records Act. The Wichita Eagle requested it too, and as of the time I received my copy, only that newspaper and I had requested it (along with the other three proposals from the finalists).

I didn’t scan all the pages, leaving out a section about the personnel involved and an appendix of related articles. Still, there’s 109 pages to read — but there are a lot of pictures. Click on
Goody Clancy Proposal for Downtown Wichita Revitalization Master Plan to view or print the document.

(Update: The Wichita Eagle has obtained and posted a much better version of the proposal. It’s complete and in color. Click here and here.)

There are danger signs all over this document. Under the heading “Fiscal Responsibility,” for example, we see “Know the full range of effective public-private finance tools at hand.” Which means, of course, that developers will have their hands in the pockets of taxpayers through devices such as TIF districts, grants, tax credits, abatements, and other forms of subsidy.

Another sign: as a challenge to downtown, the document cites “The impact of relatively low development costs (inexpensive land, tenant-borne special assessment districts for infrastructure) at Wichita’s perimeter have a direct impact on Downtown land value and infrastructure economics.” (emphasis added)

What’s wrong with this statement? First, inexpensive land is a good thing. It means more people can afford what they want.

Second, note that people developing on the perimeter pay their own infrastructure costs. This statement hints that downtown developments won’t be expected to pay theirs.

There are just a few hopeful signs: “Indeed, WaterWalk 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 WaterWalk is a rousing success, it might not make sense to split the pie still further.”

Indeed. While we’re at it, let’s etch the names of the developers of WaterWalk on a large monument somewhere downtown, so that they are properly excluded from any further consideration as beneficiaries of the taxpayer. (Here’s the list, in case this monument isn’t built.)

But if there’s not demand for another food and fun district in Wichita, what about the promise of all the food and fun surrounding the Intrust Bank Arena? (A campaign piece from that election reads “It [the arena] will enrich our quality of life as new restaurants, shops and clubs spring up in the area …”)

It’s unknown how seriously the city council will take the steering committee’s recommendation. The council plans to vote on October 13.

Wichita city government

Wichita press release mislabels Wichita Downtown Development Corporation

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After selecting a firm to assist with the planning for the revitalization of downtown Wichita, the city issued a press release that contains a mischaracterization of a Wichita institution.

The press release reads “The City of Wichita has committed $225,000 for a downtown comprehensive strategic plan. The private sector has contributed $275,000, including $175,000 from Wichita Downtown Development Corporation and $100,000 from businesses, organizations and individuals.” (emphasis added)

Here, the Wichita Downtown Development Corporation is classified as part of the private sector. It’s hard to see how this characterization makes any sense.

The WDDC is organized as a 501(c)(3) tax-exempt non-profit corporation. But unlike most non-profits — which rely on voluntary contributions from those who support their causes — the WDDC is almost totally funded by a governmental body, the City of Wichita.

In fact, nearly all the WDDC’s revenue comes from taxation. According to its IRS form 990 for 2008, the WDDC received $610,214 from its public improvement district, in the form of property taxes paid by downtown property owners. According to the form, this represents 98.320% of the WDDC’s revenue.

So is the WDDC part of the “private sector?” Of course not. It is funded almost totally by government taxation. The City of Wichita calling WDDC “private sector” is like saying the Wichita public school district is private sector.

You can’t blame the city for trying this sleight of hand. One of the big buzzwords we’re going to hear as part of the coming centralized government plan for downtown is the “public-private partnership.” We can expect the city to do everything it can to pump up the appearance of private sector buy-in to the planning process. This misleading characterization of the WDDC, I suspect, is just the start.

Wichita city government

Wichita planning firm hopefuls make pitch

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This past Tuesday and Wednesday, the four planning firms that were selected as finalists for the master plan for the revitalization of downtown Wichita made their public presentations. I was able to attend three of the presentations.

In his opening remarks to the Tuesday session, Wichita Mayor Carl Brewer said that tonight is an important night for our community. He said that the revitalization effort is about more than just downtown, but about all of us. “Downtown is our front porch.” We must come together as a community in this effort.

Studies of other cities, he said, show that downtown revitalization leads to more jobs, tourism, increased property values, and increased satisfaction and pride in our city.

“Feet on the street,” the mayor said, means that everything people want can be provided in a walkable area.

The planning firms and their representatives are all immensely confident in their capabilities and proud of their past achievements. Most use grand language — “dynamic,” “bold plan, “innovative,” “forward-looking.”

Community engagement is important, all firms said. So is the public-private partnership. Leveraging public investment with private investment was always mentioned.

Transit — including public transit — was emphasized by the firms. One firm promoted “bicycle-oriented development.” In a nod to the green revolution — whether that’s a good idea or not — “sustainability” was often mentioned, with one firm having an expert in just that on its panel of presenters.

There was actually some distinction between the presenting forms. One makes use of a charrette, which is a period of intense design activity. Another firm said it doesn’t use this practice.

For one firm, the presenter said that the firm had been in Wichita for three months gathering information and meeting with Wichitans.

The presentations and the printed proposals are full of grand and attractive images of the firms’ projects in other cities. One firm, in its presentation, showed several images of parts of downtown Wichita where there was a vacant lot or other empty space. Then, said the presenter, imagine if it looked like this! And the empty space would be filled in with attractive buildings of immense size and scale.

Sometimes the presenters said things that made me wonder about their actual knowledge of Wichita. One said that because Wichita has such a stable economy, it is attractive to outside investors. While it’s true that our housing market has been relatively stable — we never had the huge run-up in prices and then a crash — it a common compliant that Wichita is too dependent on aviation, and that we need to diversify our local economy.

Another presenter, and I am not kidding, praised the WaterWalk development as an example of a Wichita success. I also learned that we must prepare — at least according to one firm — for the return of passenger rail service to Wichita.

I was surprised that most of the planning firms used a variety of experts in different fields — economics and economic development, transit, planning, architecture, sustainability, civil engineering, traffic, and transit are some of the examples. One firm had partnered with local experts.

Each firm presented for about an hour, with time for just a few questions from the selection committee.

Going forward, the selection committee will select one firm to recommend to the Wichita city council. The target date for this is tomorrow. Then, it’s thought that on October 13 the city council will make the selection — or maybe choose none of the firms.

Since the city council has the final say, I was surprised that only council member Lavonta Williams attended, besides, of course, Mayor Brewer.

After the steering committee makes its recommendation, I plan to examine that firm’s proposal more closely. We also need to take a look at the results of their previous projects. For example, were they financed through tax increment financing (TIF) districts, and how are those districts performing? What other type of public subsidy was necessary to make the projects work (or not)? Was eminent domain used to transfer property from one person to another, just because the new owner would pay more in taxes? If there was rezoning, was it done with overlays that respected existing property use rights?

These are some of the questions that we’ll want to get answers to. These are the important things I learned about during my trip to Anaheim’s Platinum Triangle development. Will Wichita pursue a freedom-friendly planning process as used there?

In addition, we need to decide whether we want to plan at all, at least in the comprehensive way that the planning firms are promoting. A book I recently read, The Best-Laid Plans: How Government Planning Harms Your Quality of Life, Your Pocketbook, and Your Future, presents evidence of the harm that centralized government planning causes. Listening to the presentations, I recognized the firms were planning to use many of the dangerous practices and beliefs mentioned in this book.

Sedgwick county government

Lutz, Hanson, Fahnestock owe Wichita an apology

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In the campaign for the sales tax to build the downtown Wichita arena (Intrust Bank Arena), the idea of hosting NCAA men’s basketball games was promoted as something that would happen if voters approved the arena.

This week we learned that for this event, our arena has been rejected for the next three years.

Three arena boosters in particular — Bob Hanson of the Greater Wichita Area Sports Commission, businessman George Fahnestock, and Wichita Eagle sports columnist Bob Lutz — owe Wichita and Sedgwick County voters an apology.

As it turns out, Lutz was quite the visionary in a June 18, 2004 Wichita Eagle column, in which he wrote: “Imagine our city bidding for an NCAA Tournament subregional or the Big 12 Tournament.”

We don’t have to imagine anymore.

Uncategorized, Wichita city government

DeBoer plan for Wichita downtown redevelopment largely realized

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The following is a lightly edited version of an insightful comment left on this site by an unknown writer, the “Wichitator.” Since many readers don’t read comments, I’ve promoted this to a post.

Hundreds of millions have already been spent for downtown redevelopment and what do we have to show for it? In contrast, look at the benign neglect the city has had on the thriving east and west sides of town where projects on Maize and Webb roads have prospered despite heavy property taxes.

Over 20 years ago the current downtown developer of the languishing East Bank (WaterWalk) project, Jack DeBoer, provided his vision for revitalizing downtown. There was a lot of public discussion about DeBoer’s proposal including front page Wichita Eagle articles at that time. No one in the local news media wants to talk about this now apparently.

Ironically enough, at that time, DeBoer’s plan did not include the struggling East Bank (Waterwalk) project that he is currently involved in. DeBoer’s vision of downtown projects were largely implemented by taxpayers over time.

The largest and most expensive of these projects will be the Intrust Arena with its $200+ million price tag. The only one that has been partially rejected was turning the Keeper of the Plains into a 500 foot community version of a Seattle Sky Needle that one might argue was at least partially implemented when this statue was placed on a much higher pedestal at a more prominent point where the two rivers meet at high cost to city taxpayers.

Lesser downtown projects that were part of DeBoer’s plan and were a lot less expensive than the new arena, were completed years ago. This public infrastructure is now in place at a very expensive cost to taxpayers of the past few decades. Another example, Exploration Place, still has years before its mortgage will be paid off, I believe.

Where has been the return for this community? It is invisible to this taxpayer. Look at the downtown taxing district. It takes in about the same level of property tax revenues as it has always received. It is clear that there is no private sector growth downtown. So tax revenues are stagnant. This publicly funded but privately selected downtown board operates with almost no media oversight. There is some taxpayer subsidized remodeling going on but outside of that, I can only think of the Garvey Center where significant private funds are being spent on a partial remodel of their downtown property.

The philosopher George Santayana said, “Those who do not remember the past are condemned to repeat it.” Since the downtown development plans are NOT being made public it looks like we’ll soon have another, 21st century version of the 1980s DeBoer plan that the taxpayers in our community will be expected to fund. In Washington, nothing fails like excess (see GSE’s Fannie & Freddie) and in Wichita we are trying to follow in our federal masters’ footsteps. Since local government can’t print money like the political fools in Washington can through the Federal Reserve Bank, the fiscal chickens will come home to roost a lot more quickly here. Mr. Weeks is right in trying to see the details of these proposals. If we did, the price tag would probably take our collective breaths away. The downtown development folks who want to be the 21st century reincarnation of Mr. DeBoer are just as right in wanting to keep this information hidden.

Wichita city government

Downtown Wichita presentations: what’s the point?

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As part of its effort to revitalize downtown Wichita, the city wants to hire a planning firm. Four firms have been selected as finalists. Tuesday and Wednesday, (September 22 and 23), the firms will make public presentations as part of the selection process.

I had thought that it would be great if the public would be involved in this selection process. To that end I asked — first informally, then under the provisions of the Kansas Open Records Act — for copies of the proposals submitted by the finalist firms. My requests were denied. (See Downtown Wichita proposals not available to citizens)

In the end, the fact that the city won’t let citizens see the proposals probably doesn’t matter. At this week’s planning meetings, citizens will not be allowed to ask questions. There will be a city council meeting where the council will make a decision, and citizens will have an opportunity to provide input at that time. But without detailed knowledge of the proposals, how can citizens ask questions?

Citizens need to realize that city government and downtown leaders are just not interested in their input in this matter.

There are a few citizens, though, who do have these proposals. If you’re a member of a select committee, you can have them. Government shouldn’t be allowed to pick and choose which select citizens are allowed to see how their tax dollars are to be used.

The fact that the city doesn’t want to let citizens — except those in a limited circle of downtown boosters — view these proposals and participate in the planning firm selection process is disturbing. It follows a pattern of stacking committees with people friendly to the desired goal, with no desire for dissent to be heard. It’s a public relations disaster for the City of Wichita.

Wichita city government

Wichita’s redevelopment role model needs scrutiny

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Power and Light District Kansas City 2009-09-16 35Kansas City Power & Light District

On the City of Wichita’s cable channel 7, Kansas City’s Power & Light District is presented as a model for the revitalization of downtown Wichita. Wichita Mayor Carl Brewer sees this district as Wichita’s competition.

So yesterday I went to take a look for myself. And I agree with the mayor. It’s a neat place. It’s huge. It would be great if Wichita had something like it.

But there are problems surfacing already. Although I haven’t yet done extensive research, it appears that the troubles stem from the public/private partnership nature of the district.

One problem is the tax increment financing district, or TIF district, that underlies the district. It appears to be underperforming: “The biggest project, the Kansas City Power & Light District, will cost the city more than $4 million because there wasn’t sufficient economic activity to cover TIF bond payments.” (TIF bonds take a bite out of KC’s skinny budget, Kansas City Business Journal, February 9, 2009)

In Wichita, when we have underperforming TIF districts, we might make an interest-free loan to solve the problem.

The district and Jackson County are squabbling over the taxable value of this property, too. And it’s not a small disagreement — the owners and the county disagree by a huge amount:

The developer of the Kansas City Power & Light District refers to the project on its Web site as an $850 million project.

Yet The Cordish Co. claims in a lawsuit and to county officials that the project’s value — at least its appraised valuation — should be $12.3 million when the project is complete.

That valuation, which equates to an average of about $24 a square foot, is a far cry from Jackson County’s appraised value of $160 million, roughly $270 a square foot, which is what county officials say the district is worth for 2009. (Power & Light District developer seeks bargain-basement valuation, Kansas City Business Journal, January 16, 2009)

The developer of the district seems to have a few issues, too, writes a Kansas City Star columnist: “Cordish Co. CEO David Cordish comes across as a petulant, greedy, uninformed developer in his e-mail rantings to KC Mayor Mark Funkhouser.”

In Wichita and across the country, public/private partnerships have a mixed record. We’ll want to think carefully whether we want to rely on the artificial nature of subsidized development as we think about the revitalization of downtown Wichita.

Wichita city government

Downtown Wichita proposals not available to citizens

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As part of Wichita’s downtown revitalization effort, city leaders decided to hire a planning firm. Four firms have been selected as finalists, and a committee is in the process of evaluating their proposals.

Whether or not you think this planning process is wise — and I happen to think it is not — it seems to be the will of the city and the special interest groups that will benefit from this type of central planning. So, it seems, we might as well make the best of it. This would include selecting a planning firm that seems most likely to respect property rights, specifically: (a) rejecting the use of eminent domain to seize property, (b) respecting existing zoning and land use rights, and (c) rejecting the use of TIF districts and other forms of public subsidy. These are the things that I learned are important from my trip to Anaheim’s Platinum Triangle, if a city wants to plan in a freedom-friendly way.

On September 22 and 23, the planning firms will be making presentations to the public. I thought it would be great for citizens to be able to read the proposals so that they would be able to ask intelligent questions at these presentations. Unfortunately, the city won’t let citizens read these proposals, and citizens will not be permitted to ask questions at the presentations.

The City of Wichita, according to Scott Knebel (Principal Planner, Advanced Plans Division, Wichita-Sedgwick County Metropolitan Area Planning Department), doesn’t consider the proposals to be open records under the Kansas Open Records Act. He wrote that in response to my informal request to view the proposal documents. I’ve now made a formal request to the city, and if the city denies access to the records, it will have to cite the provision in the Kansas Open Records Act on which it is relying.

Earlier I said that citizens can’t read these proposals, but that’s not entirely true. If you’re a member of a select committee, you can have them. Government shouldn’t be allowed to pick and choose which select citizens are allowed to see how their tax dollars are to be used, and all citizens have a right to know if government intends to take their property.

The fact that the city doesn’t want to let citizens — except those in a limited circle of downtown boosters — view these proposals and participate in the planning firm selection process is disturbing. It follows a pattern of stacking committees with people friendly to the desired goal, with no desire for dissent to be heard.

Wichita city government

At Wichita city council, special pleading of selfish interests

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At yesterday’s meeting of the the Wichita City Council, a matter was presented to the council that provided an illustration of basic economic principles that are foreign to the council.

A condominium homeowners association asked for special assessment tax financing to make repairs to the building. My remarks that I delivered at the meeting were based on my post In Wichita, waiving guidelines makes for bad policy.

David M. Bryan, a Wichita attorney and resident of the building, represented the the homeowners association that is asking for the special assessment financing. He spoke after I did. His wife accompanied him to the podium.

Bryan’s case for help was based on factors that — besides being irrelevant — show just what a fiasco this matter is. It also illustrates just how selfish these condominium owners are in expecting the city to bail them out of their problem.

First, he says that he and the other condo owners represent one of the goals of downtown redevelopment. “We all took that leap of faith and bought the lofts” when the building was still under construction.

He didn’t know what tuckpointing was when he moved in to this building, and he and the other residents didn’t know that this [the need for repair] was going to happen.

He said that he thinks the building represents a sound and good investment in downtown redevelopment, and that the building is part of what the city council wants to accomplish.

Conventional financing for these repairs would, Bryan said, require personal guarantees by all residents, and that would prevent the individual units from being sold unless the entire loan was paid off.

(In my testimony, I made the point that the amount that each condominium owner needs to pay to fix the building is on the order of what it would cost to paint a conventional house of the same value as these units. There’s also a defect in the ownership structure of this building if there is no way to pay for repairs like the present situation, as things like this are foreseeable.)

Council member Paul Gray, speaking from the bench, expressed concern that approval of this request sets a precedent for other condominium buildings in Wichita to make the same request that this building has made.

In the end, council member Lavonta Williams made the motion to approve the financing. All members except Gray voted for it. Vice-Mayor Jim Skelton was not present.

After the council voted, Mrs. Bryan gave Wichita economic development director Allen Bell a pat on the back, and Bell and Mr. Bryan shared a congratulatory handshake. You can see these things by attending the meetings in person.

It appears that the city’s desire for downtown redevelopment is an unsustainable goal that can’t be maintained without continued subsidy. The message is this: When a downtown development gets in financial trouble, make a beeline to city hall. This was the case last year when the Warren Theater received a no- and low-interest loan from the city, propping up the city’s ill-conceived investment in a TIF district benefiting that theater.

Recently we learned that rehabilitation of a downtown hotel is on hold because historic tax credits — that is, outright gifts to developers — are on hold because the state can’t afford to grant them.

Now, buildings that need small repairs that can be deemed to be part of the city’s plan for downtown redevelopment are eligible for special assessment financing.

I don’t think the council is aware of the corrosive effect of these special favors. No news media reported this story. It is a small amount of money that is involved in this case. This matter is emblematic, however, of an activist city council and city staff who believe they can direct economic investment in Wichita better than its citizens can on their own.

While listening to Bryan make his case, I thought this is an illustration of the lessons Henry Hazlitt taught us in his classic work Economics in One Lesson. The first chapter may be read at One Lesson, which I excerpt here:

Economics is haunted by more fallacies than any other study known to man. This is no accident. The inherent difficulties of the subject would be great enough in any case, but they are multiplied a thousandfold by a factor that is insignificant in, say, physics, mathematics, or medicine — the special pleading of selfish interests.

While every group has certain economic interests identical with those of all groups, every group has also, as we shall see, interests antagonistic to those of all other groups. While certain public policies would in the long run benefit everybody, other policies would benefit one group only at the expense of all other groups. …

In addition to these endless pleadings of self-interest, there is a second main factor that spawns new economic fallacies every day. This is the persistent tendency of men to see only the immediate effects of a given policy, or its effects only on a special group, and to neglect to inquire what the long-run effects of that policy will be not only on that special group but on all groups.

Wichita city government

In Wichita, waiving guidelines makes for bad policy

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Remarks to be delivered to the August 18, 2009 meeting of the Wichita City Council.

Mr. Mayor, members of the Wichita City Council,

I am here to ask you to deny the request for special assessment financing for the Lofts at St. Francis homeowners association to make repairs to their building.

I’ve spoken to this council about how the facade improvement program, in general, is bad public policy. In this case, it’s bad public policy compounded by the waiver of principles or guidelines that this council recently set in place.

I realize that special assessment financing means that the city is not making a grant of money to the homeowners association. Instead, the city is making a loan, which is required to be repaid over time.

What concerns me about this situation is that two guidelines in the city’s facade improvement program must be waived for this project to obtain special assessment financing.

The first is the private investment match. This is designed to ensure that the property owners have “skin in the game” and that the taxes will be paid back.

Here, the city is proposing that since the building’s owners have made a past investment in this property, there’s no need to require a concurrent investment. It hardly needs to be noted that anyone who has purchased property has made a past investment in that property.

Second, facade improvement projects are required to undergo a gap analysis to “prove” the need for public financing. According to the city’s report: “This project does not lend itself to this type of gap analysis; however, staff believes that conventional financing would be difficult to obtain for exterior repairs to a residential condominium property like this.”

So the city proposes to waive this requirement as well.

There seems to me to be a defect in the manner of ownership of this building. While the homeowners association and the individual condominium owners might not have anticipated that repairs would be needed so soon after the building’s opening, they must have contemplated that repairs and maintenance — to either exterior or interior common areas — would be needed at some time. How does the association plan to pay for these?

So what will happen if the city council doesn’t approve the special assessment financing? The agenda report states “Each individual condo owner would be required to fund a share of the cost.”

Isn’t that what private property owners do: fund the cost of repairs to their property?

According to the Sedgwick County Treasurer’s office, the appraised values of these condos range from $103,000 to $310,200, with an average value of $201,943. The maximum amount being added to each condo’s assessment is $4,022, although I have learned that the actual amount may be closer to $3,000.

That’s along the lines of what it might cost to perform a few repairs and paint a house that’s worth what these condos are worth. So I think it’s hard to make the case that these property owners can’t afford to make these repairs on their own without a loan from the city.

Furthermore, if the goal of the facade improvement program is to provide an incentive for property owners to fix up their buildings, I would submit that such incentive is not necessary in this case. This building is a valuable residential property, and the homeowners have a strong incentive to maintain the integrity and value of their property.

Mr. Mayor and members of the council, let’s ask these owners do just what thousands of homeowners in Wichita do every year: take responsibility for the maintenance of their own property without looking to city hall for help.

Wichita city government

Wichita special assessments for repairs is bad policy

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Lofts at St. Francis, Wichita, Kansas

At Tuesday’s meeting of the Wichita City Council, a privately-owned condominium association is seeking special assessment financing to make repairs to its building. In order for the association to succeed in its request, the council will have to waive two guidelines of Wichita’s facade improvement program.

Special assessment financing means that the cost of the repairs, up to $112,620 in this case, will be added to the building’s property taxes. Actually, in this case, to each of the condominium owners’ taxes. They’ll pay it off over the course of 15 years. (A conversation with the president of the homeowners association brought out the possibility that the actual assessment may be in the neighborhood of $75,000.)

So the city is not giving this money to the building’s owners. They’ll have to pay it back. The city is, however, setting new precedent in this action.

Special assessment financing has traditionally been used to fund infrastructure such as streets and sewers, and new infrastructure at that. The city, under its facade improvement program, now allows this type of financing to be used to make repairs and renovations to existing buildings. That’s if the building is located in one of the politically-favored areas of town.

By using special assessment financing in this way, the city seeks to direct investment towards parts of town that it feels doesn’t have enough investment. This form of centralized government planning is bad public policy. The city should stop doing this, and let people freely choose where to invest.

Besides this, two guidelines in the city’s facade improvement program must be waived for this project to obtain special assessment financing.

The first is the private investment match. This is designed to ensure that the property owners have “skin in the game” and that the taxes will be paid back.

Here, the city is proposing that since the building’s owners have made a past investment in this property, there’s no need to require a concurrent investment. It hardly needs to be noted that anyone who has purchased property has made a past investment in that property.

Second, facade improvement projects are required to undergo a gap analysis to “prove” the need for public financing. According to the city’s report: “This project does not lend itself to this type of gap analysis; however, staff believes that conventional financing would be difficult to obtain for exterior repairs to a residential condominium property like this.”

So the city proposes to waive this requirement as well.

There seems to me to be a defect in the manner of ownership of this building. While the homeowners association and the condominium owners might not have anticipated that repairs would be needed so soon after the building’s opening, they must have contemplated that repairs and maintenance — to either exterior or interior common areas — would be needed at some time. How does the association plan to pay for these?

So what will happen if the city council doesn’t approve the special assessment financing? The agenda report states “Each individual condo owner would be required to fund a share of the cost.”

Isn’t that what private property owners do: fund the cost of repairs to their property?

According to the Sedgwick County Treasurer’s office, the appraised values of these condos range from $103,000 to $310,200, with an average value of $201,943. The maximum amount being added to each condo’s assessment is $4,022, although the actual amount may be closer to $3,000.

That’s along the lines of what it might cost to perform a few repairs and paint a house that’s worth what these condos are worth.

Let’s ask that these owners do just what thousands of homeowners in Wichita do every year: take responsibility for the maintenance of their own property without looking to city hall for help.

Lofts at St. Francis Agenda Report 2009-08-18

Wichita city government

Wichita downtown revitalization discussed on Kansas Week

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Bob Weeks discusses planning for downtown Wichita revitalization and what he learned on his trip to the Platinum Triangle in Anaheim, California. Host Tim Brown and guest Randy Brown also appear. From the KPTS Television show Kansas Week, August 14, 2009.

The article referred to is Wichita’s getting ready to plan.

Wichita city government

Wichita’s getting ready to plan

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As the City of Wichita develops a grand plan for downtown revitalization, can we have a process that is freedom-friendly and respects property rights? I went to Anaheim to find out.

Leaders in Wichita — both private and public sector — believe that Wichita needs a plan for downtown. To support this, the city is seeking to develop a Downtown Revitalization Master Plan, a “a twenty-year vision for its thriving downtown.” Right away I want to ask: if downtown is thriving, why does it need revitalization?

The document Wichita used to lure planning firms to apply for the planning job is full of ambitious and colorful language: “a community synergy that is contagious,” “casting a grand vision to realize our potential,” “the bold vision the community is seeking.”

The danger we face is that Wichita’s plan will end up like almost all other urban plans — a top-down effort micromanaged by politicians and bureaucrats, people whose incentives are all wrong. We already have the structure in place, with our mayor promoting the plan for downtown as his signature achievement, and a tax-supported downtown development organization headed by a young and energetic planning professional.

There is a different way to go about redevelopment, a way that respects freedom and property rights, while at the same time promising a better chance of success.

Last month I visited Anaheim, California, to learn more about the Platinum Triangle. This is an area of low-rise warehouses and industry that the city thought would be a good place for redevelopment. (Anaheim’s old downtown was redeveloped starting in the 1970s, is fairly nondescript, and has not met expectations.)

What Anaheim decided to do with the Platinum Triangle is to employ “freedom-friendly” principles in the district’s development. Or, as the subtitle to an article written by Anaheim Mayor Curt Pringle states, a “Foundation of Freedom Inspires Urban Growth.”

Here are the important things that Anaheim has done that are out of the ordinary:

No use of eminent domain to take property. The forceful taking of property by government for the purposes of giving it to someone else is one of the worst violations of property rights and liberty that we can imagine. But it’s a prime tool of redevelopment, one that the planning profession says is essential to their efforts to reshape cities.

In Kansas, we have a relatively new eminent domain law that, on its face, should provide strong protection to property owners. It’s unknown whether this protection will be effective when a city such as Wichita asks the legislature to allow the use of eminent domain, which is what the law requires. If a city makes the case that the success of Wichita and thousands of jobs depend on the use of eminent domain, will legislators go along?

Overlay zoning that respects existing land use. Instead of replacing existing zoning, the city added an “overlay zone.” This meant that while the land had new permissible uses and restrictions, existing rights were protected. It’s only if existing property owners wanted to pursue new development that they would have to conform to the new development standards contained in the overlay zoning.

No public subsidies or incentives. In California, they’re called redevelopment districts. In Kansas, we call them tax increment financing or TIF districts. In either case, this mechanism allows property owners to, in effect, retain their own increased property taxes for the benefit of their developments, something that the average taxpayer — or real estate developer not working in a politically-favored area — can’t do.

The City of Wichita views TIF districts as a powerful tool for development. The city has many existing TIF districts, and we can expect that others will be created to support downtown revitalization. While many people recognize and agree that the taking of land through eminent domain for economic development is bad, the taking of tax revenues through TIF is subtle. Most citizens don’t know this is happening.

Anaheim did a few other things: it streamlined the permitting process, reduced parking regulation, developed a broad-based environment impact report, and relaxed requirements for balancing commercial and residential uses.

It also used a “first-come, first served” housing permit allocation process. Instead of allocating housing permits to each parcel, permits were allocated to a much larger district. Developers could claim them through a competitive process and use them flexibly.

What’s been the result in the Platinum Triangle? After the district was formed in 2004, development started at a fast pace. But the housing crisis in California has definitely put a damper on the pace of development. An illustration: In a loft project in the Platinum Triangle, condos originally priced at $400,000 are now offered at $250,000. It’s expected that as the housing crisis eases, developers will go ahead with their plans.

The Platinum Triangle offers a distinctly different model for redevelopment than that practiced in most cities. A few other cities in California have noticed and are adopting Platinum Triangle-style, freedom-friendly, principles.

The question we in Wichita now face is this: Will Wichita adopt a freedom-friendly approach to downtown revitalization?

Wichita city government

Light rail not good for Wichita

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A recent letter in the Wichita Eagle by Alden Wilner of Bel Aire worries that “flat, dusty and hot” parking lots in the neighborhood of the Intrust Bank Arena (formerly known as the downtown Wichita arena) in downtown Wichita will hamper downtown revitalization.

I don’t know if this claim is true or not, but I do know that the solution Wilner proposes — “an area wide light-rail system” — would be an absolute disaster for Wichita. These systems are costly to build and operate, suffer from low ridership almost everywhere they are built, and have many other problems.

In a recent article, Randal O’Toole presented the costs of light rail versus highways:

The average mile of light-rail line costs two to five times as much as an urban freeway lane-mile. Yet in 2007 the average light-rail line carried less than one-seventh as many people as the average freeway lane-mile in cities with light rail.

Do the math: Light rail costs 14 to 35 times as much to move people as highways.

The Government Accountability Office found that bus-rapid transit—frequent buses with limited stops—provided faster, better service at 2 percent of the capital cost and lower operating costs than light rail.

Light rail is the mantra of those who hate cars. They must love waste and failure in its place. Portland is an example of an area that’s built a lot of light rail in recent years. O’Toole points out that in 1980 — before the light rail building boom — 9.8 percent of the region’s commuters took transit to work. Now that number, despite the light rail building boom, has declined to 7.6 percent.

Another article by O’Toole (Light Rail Doesn’t Work) tells of the huge costs, inconvenience, congestion, misallocation of economic development, and increased energy consumption and greenhouse gas output that light rail projects produce.

O’Toole is the author of The Best-Laid Plans: How Government Planning Harms Your Quality of Life, Your Pocketbook, and Your Future. As Wichita prepares to undertake large-scale planning for the revitalization of downtown, I would urge our leaders to read this book.