Voice For Liberty

Tag: Downtown Wichita revitalization

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

  • Wichita press release mislabels Wichita Downtown Development Corporation

    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 planning firm hopefuls make pitch

    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.

  • Lutz, Hanson, Fahnestock owe Wichita an apology

    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.

  • DeBoer plan for Wichita downtown redevelopment largely realized

    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.

  • Downtown Wichita presentations: what’s the point?

    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’s redevelopment role model needs scrutiny

    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.

  • Downtown Wichita proposals not available to citizens

    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.

  • At Wichita city council, special pleading of selfish interests

    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.

  • In Wichita, waiving guidelines makes for bad policy

    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.