Voice For Liberty

Tag: Jeff Longwell

Wichita City Council Member Jeff Longwell

  • State of the City, Wichita: Employment strength

    State of the City, Wichita: Employment strength

    Wichita Mayor Jeff Longwell’s State of the City video relies on flimsy evidence and plucks scant good news from a sea of bad. This is a problem.

    Recently Wichita Mayor Jeff Longwell delivered the State of the City video. It was posted to YouTube on March 28, 2019, and may be viewed here.

    In this video, the mayor said, “The recent Livability.com study measured employment rates strength over time, affordability, and community amenities.” This isn’t the first time the mayor and other city officials have mentioned this study, if we can even call it that. 1 In January, a tweet from the official @CityofWichita Twitter account contained: “We have been named one of the top two recession-proof cities in the nation by @Livability. Wichita was praised for its ability to withstand turbulence in the national economy, steady job growth and the state’s low income-to-debt ratio.” 2

    What does the data tell us? The nearby chart illustrates that since the end of the last recession, job growth in Wichita has been below job growth in the nation as a whole. Generally, job growth in Wichita has been at about half the rate of the nation. In 2017, Wichita lost jobs. Yet, City of Wichita officials, including Mayor Longwell, tout “steady job growth,” relying on a study that obviously isn’t based on evidence.

    Click for larger.

    The mayor also said: “Wichita’s unemployment rate is at a historically low 3.5%, and WSU forecasts that Wichita is expected to see an across-the-board increase in overall jobs this year.”

    Look at the data. In this table, we see that the unemployment rate (monthly average) for 2018 is nearly unchanged from 1999. Also nearly unchanged for these 19 years are the civilian labor force and number of jobs. Both values are slightly lower now. This is not “steady job growth,” as Wichita officials proclaim. It is stagnation.

    It’s not only employment that has been bad news. In 2017 the Wichita economy contracted, which is the definition of a recession. 3 Personal income has grown only slowly. 4

    Regarding jobs, the mayor accurately reports what the Center for Economic Development and Business Research at Wichita State University forecast said: Jobs are forecast to rise in Wichita for 2019. 5 Specifically, the report said: “Wichita is estimated to add approximately 2,500 jobs in 2018, and growth is projected to increase modestly to 0.9 percent in 2019, with more than 2,700 new jobs added.”

    Is 0.9 percent job growth good? Nationally, the economy is expected to continue strong growth, although perhaps slightly slower than in 2018. 6 Nationally, job growth is forecast at 1.7 percent for 2019. 7 Wichita’s forecast rate of 0.9 percent is 53 percent of the national rate.

    It’s good news that jobs are set to grow rather than shrink. But in a surging national economy, that’s setting a low standard for success.

    What’s unfortunate is the mayor and city promote things like this as good news. But when we use readily accessible data from sources like the Bureau of Labor Statistics (part of the United States Department of Labor) and Bureau of Economic Analysis (a division of the United States Department of Commerce), we easily see that we’re not being told the entire story. “Recession-proof” glosses over recent years of declining production. “Historically low” unemployment rates ignore a stagnant and declining labor force. “An across-the-board increase in overall jobs this year” doesn’t contextualize that the forecast rate of growth for Wichita is anemic compared to the nation.

    What we need to know is this: Are the mayor and city officials aware of the actual statistics, or are they ignorant?

    —
    Notes

    1. Weeks, Bob. Wichita, a recession-proof city. Available at https://wichitaliberty.org/wichita-government/wichita-recession-proof-city/. ↩
    2. Twitter, January 22, 2019. https://twitter.com/CityofWichita/status/1087832893274157059. ↩
    3. “For 2017, the Wichita metropolitan area GDP, in real dollars, fell by 1.4 percent. Revised statistics for 2016 indicate growth of 3.8 percent for that year. Last year BEA reported growth of -1.4 percent.” Weeks, Bob. Wichita economy shrinks, and a revision. Available at https://wichitaliberty.org/economics/wichita-economy-shrinks-and-revision/. ↩
    4. “For all metropolitan areas in the United States, personal income rose by 4.5 percent. For the Wichita metro area, the increase was 2.3 percent. Of 383 metropolitan areas, Wichita’s growth rate was at position 342.” Weeks, Bob. *Personal income in Wichita rises, but slowly. Available at https://wichitaliberty.org/economics/personal-income-in-wichita-rises-but-slowly/. ↩
    5. Center for Economic Development and Business Research at Wichita State University. Wichita Employment Forecast. January 8, 2019. Available at http://www.cedbr.org/forecast-blog/forecasts-wichita/1558-economic-outlook-wichita-2019-january-revision. ↩
    6. Minutes of the Federal Open Market Committee. December 18-19, 2018. Available at https://www.federalreserve.gov/monetarypolicy/fomcminutes20181219.htm. ↩
    7. Yandle, Bruce. Block out the noise: Here’s the 2019 economic outlook. Available at https://www.washingtonexaminer.com/opinion/block-out-the-noise-heres-the-2019-economic-outlook. ↩
  • State of the City, Wichita: The bright future

    State of the City, Wichita: The bright future

    Wichita Mayor Jeff Longwell’s State of the City video doesn’t seem to be based on reality.

    Recently Wichita Mayor Jeff Longwell delivered the State of the City video. It was posted to YouTube on March 28, 2019, and may be viewed here.

    Not long into the address, the mayor says, “… we must embrace the challenges we face and forge ahead into the bright future that is just around the corner.”

    Wichita MSA population, percent change from prior year. Click for larger.
    On that bright future: Since the mayor spoke, learned that the Wichita metropolitan area lost population during the year ending July 1, 2018. 1 So at the time of the address, Longwell didn’t know the area had lost population, but he should have known that the trend of population growth has been slowing, as can be seen in the nearby chart.

    What about the population of Wichita city proper, as that is the jurisdiction the mayor was elected to represent? (It’s better to look at the MSA, for a number of reasons. 2 For one, several major “Wichita” employers are not located within the Wichita city limits. Major portions of Spirit Aerosystems, for example, lie outside the city, and the city certainly takes credit for job creation there.)

    Wichita and top 100 city population, annual change. Click for larger.
    City populations are available through July 1, 2017. 3 From 2011 to 2017, the top 100 cities averaged annual growth of 1.03 percent. For the City of Wichita, the average was 0.29 percent, barely more than one-fourth the rate. (Wichita was the 50th largest city in 2017.) The trendline of growth for Wichita is down, as it is for the top 100 cities in general.

    We have to ask: With a population growing much slower than the nation — and declining in the most recent year — what is the future of Wichita?

    More importantly: Is Mayor Longwell aware of these statistics, and if so, why does he not recognize them? I hope this isn’t what he means by “embrace the challenges.”

    —
    Notes

    1. Weeks, Bob. Wichita population falls; outmigration continues. Available at https://wichitaliberty.org/wichita-government/wichita-population-falls-outmigration-continues/. ↩
    2. Weeks, Bob. Wichita metropolitan area population in context. Available at https://wichitaliberty.org/wichita-government/wichita-metropolitan-area-population-in-context/. ↩
    3. Annual Estimates of the Resident Population for Incorporated Places of 50,000 or More, Ranked by July 1, 2017 Population: April 1, 2010 to July 1, 2017 U.S. Census Bureau, Population Division. Release Date: May 2018 ↩
  • Wichita city protections for ballpark land development

    Wichita city protections for ballpark land development

    The City of Wichita says it has safeguards built in to the proposed baseball park land development deal.

    This week the Wichita City Council will consider a land development deal for land surrounding the new ballpark on the west bank of the Arkansas River downtown. The city assures us that there are safeguards in the deal that protect Wichitans.

    We need safeguards. The city is borrowing to pay for the project, and the city expects to collect a lot of money from surrounding development, necessary to pay off the borrowed money. 1

    To spur this development, the city plans to sell (about) 4.25 acres of land to the development team for $1 per acre. If the developer does not perform by building commercial space according to a schedule, the city can buy back land at that same price.

    This — the buyback of the land — is promoted as security for the city. There are protections, the city tells us. The city also acknowledges that some past deals like WaterWalk have not had the type of protections built in to the ballpark deal.

    But really: What is the value of the safeguards in the ballpark land deal?

    If the ballpark developers fail (I’d like to name them, but we don’t know anything about them except for one person 2), the city can get its land back. But what then? Who pays the bonds? (Some of the borrowing is in the form of STAR bonds, which are not obligations of the city. But if these bonds went unpaid, it would be a very large and bad blot on the city’s reputation.)

    The city says it would hurry to find another developer. But finding reputable developers willing to take over a failed effort might be difficult. Principal and interest must be paid during this time.

    This doesn’t seem like much protection.

    Walk away from WaterWalk

    Critics of city development projects point to WaterWalk as an example of a failed downtown development. Some $41 million of city funds were spent there with few positive results, and with the recent closing of the Gander Mountain store, fortunes are not looking up.

    But WaterWalk is different, the city says. In a recent social media town hall, the city stated, “Waterwalk wasn’t the deal we put together nor did it have the safeguards of this project. Waterwalk is not a city owned development.” 3

    I guess it depends on the meaning of “we.” True, most city officials weren’t in office at the time of the WaterWalk deal. Accountability belongs to others is the attitude of Wichita Mayor Jeff Longwell and others.

    But most of the people of Wichita are still here, and still waiting for the city’s promises to be realized.

    While the city criticizes the WaterWalk deal for not having safeguards, the protections built in the baseball deal aren’t very strong. And while the city says “WaterWalk is not a city owned development,” neither is the ballpark land development deal. Remember, the city is selling the land.

    The protections

    In the Wichita city council agenda packet for March 19, 2019, we find this in item IV-1:

    City grants the Developer an initial, exclusive right to purchase the Private Development Site for the development of the hospitality, commercial, retail, office and residential uses, as contemplated herein, for $1.00 an acre. This opportunity extends for ninety (90) days after the start of the first full season of the team’s residency in Wichita.

    The next point requires the developer to exercise the purchase rights and meet a series of benchmarks, with a first phase of 30,000 square feet of development starting in 2021, with a second phase of 20,000 square starting the following year, and another 15,000 square feet after that.

    Then the purported safeguards:

    If the Developer fails to Commence Construction on any Phase by the appointed time or fails to complete construction of any Phase of development within the appointed time. The Developer can forestall a default by providing personal guarantees and making the CID and TIF shortfall payments. The Developer will also forfeit any right to any future phase of development. The City may repurchase any unaffected phase property for the original sale price. If the Developer fails to make the shortfall payments, the City may collect on the personal guarantees and exercise all legal remedies.

    There is an escape clause:

    Developer may provide personal guarantees reasonably satisfactory to the City as security that Developer will make the City whole for the lost revenue stream required to satisfy the state and local STAR bond repayments, CID and TIF District financing pro forma on an annual basis (Shortfall Payments).

    As for accepting personal guarantees, we don’t know the identities of the developers, except for majority owner Lou Schwechheimer. 4 We don’t know the size of the share he owns, except the city tells us it is over 50 percent.

    —
    Notes

  • Wichita vets its baseball partner(s)

    Wichita vets its baseball partner(s)

    The City of Wichita tells us it has thoroughly vetted the majority owner of the new Wichita baseball team.

    It appears that the owners of the New Orleans Baby Cakes baseball team talked with the City of Wichita before the team received permission from Minor League Baseball. The Wichita Eagle reports: “A Minor League Baseball team may have violated league rules by talking to Wichita Mayor Jeff Longwell before seeking approval from the league, according to a letter from the league’s attorney.” 1

    While the letter doesn’t name the New Orleans team, the Eagle reported in the same story, “A city official confirmed Wednesday night that Longwell was communicating with the Baby Cakes.”

    This revelation is relevant for a few reasons.

    First, if we look at the timing of this letter, the city — at least Wichita Mayor Jeff Longwell — knew of this transgression over a year ago. 2

    These rules of minor league baseball were considered so sacred that the mayor used them as a pretext for conducting negotiations in secret, particularly withholding disclosure of a side land development deal. (Although the city did disclose, at least somewhat. 3) Apparently, these rules didn’t mean much to the majority owner of the New Orleans team — someone the city says it has “thoroughly vetted.” Now we know that Schwechheimer is alleged to have these rules regarding moving his team to Wichita.

    By the way, the rules of minor league baseball that the city shared applied to the team, not the city. The letter the mayor received warned the team could be fined, not the city.

    When the city was notified that the team had broken the rules, didn’t this raise a warning flag?

    Second, the city says it vets its partners thoroughly, including baseball team majority owner Lou Schwechheimer. But in this case, we don’t know the identities of all the partners. All we know is that one Lou Schwechheimer is a majority owner. When asked what proportion of the team he owns, the city replied, “Over 50%.” Either the city does not know the number, or is not willing to tell us. 4 There’s a big difference between owning 51 percent of something and, say, 95 percent.

    The team owners are breaking their stadium lease in New Orleans in order to move to Wichita. There is much press coverage of the owners making grand promises to the people there, only to start planning to move the team within two years. 5

    Now the majority owner makes grand promises to Wichita. But the city says he’s been “thoroughly vetted,” and relies on long-term agreements with him.

    Why won’t Schwechheimer reveal the identities of his partners or the percent of the team he owns? Why is the city willing to enter expensive and long-term agreements without knowing this?

    —
    Notes

    1. Swaim, Chance. Baseball team owners may have broken rules by talking to Wichita behind league’s back. Wichita Eagle, March 13, 2019. Available at https://www.kansas.com/news/politics-government/article227674224.html. ↩
    2. Letter and attachments from Minor League Baseball to City of Wichita 2018-01-16.pdf. Available at https://drive.google.com/open?id=1PIrEaj3X3XoqqX9Ekq1u5m6KCGV9hFDH. ↩
    3. “A bond disclosure document anticipated a development agreement for land surrounding the new Wichita ballpark.’ Weeks, Bob. Wichita ballpark STAR bonds, 2018 issue. Available at https://wichitaliberty.org/wichita-government/wichita-ballpark-star-bonds-2018-issue/. ↩
    4. City of Wichita social media town hall on Facebook, March 7, 2019. See https://wichitaliberty.org/wp-content/uploads/2019/03/City-of-Wichita-Facebook-2019-03-07-c.png. Also https://wichitaliberty.org/wp-content/uploads/2019/03/City-of-Wichita-Facebook-2019-03-07.png. ↩
    5. Weeks, Bob. Coverage of Wichita baseball owner Lou Schwechheimer. Available at https://wichitaliberty.org/wichita-government/wichita-baseball-owner-lou-schwechheimer/. ↩
  • In Wichita, respecting the people’s right to know

    In Wichita, respecting the people’s right to know

    The City of Wichita says it values open and transparent government. But the city’s record in providing information and records to citizens is poor, and there hasn’t been much improvement.

    The City of Wichita is proud to be an open and transparent governmental agency, its officials say. Former Mayor Carl Brewer often spoke in favor of government transparency. 1

    When the city received an award for transparency in 2013, Wichita City Manager Robert Layton said the city was honored. 2

    Mayor Jeff Longwell penned a column in which he said, “First off, we want City Hall to be open and transparent to everyone in the community.” And the mayor’s biography on the city’s website says, “Mayor Longwell has championed many issues related to improving the community including government accountability, accessibility and transparency …”

    But the reality is different. It shouldn’t be. Nearly four years ago the city expanded its staff by hiring a Strategic Communications Director. When the city announced the new position, it said: “The Strategic Communications Director is the City’s top communications position, charged with developing, managing, and evaluating innovative, strategic and proactive public communications plans that support the City’s mission, vision and goals.”

    But there has been little, perhaps no, improvement in the data and information made available to citizens. The Wichita Eagle has editorialized on the lack of sharing regarding the details surrounding the new baseball team. 3

    While this is important and a blatant example, there are many things the city could do to improve transparency. Some are very simple.

    For example, it is very common for governmental agencies post their checkbooks on their websites. Sedgwick County does, as does the Wichita school district. But not the City of Wichita.

    Until a few years ago, Wichita could supply data of only limited utility. What was supplied to me was data in pdf form, and as images, not text. It would be difficult and beyond the capability of most citizens to translate the data to a useful format. Even if someone translated the reports to computer-readable format, I don’t think it would be very useful. This was a serious defect in the city’s transparency efforts.

    Now, if you ask the city for this data, you’ll receive data in an Excel spreadsheet. This is an improvement. But: You may be asked to pay for this data. The city says that someday it will make check register data available, but it has been promising that for many years. See Wichita check register for the data and details on the request.

    Another example: For several years, the Kansas city of Lawrence has published an economic development report letting citizens know about the activities of the city in this area. The most recent edition may be viewed here.

    The Lawrence report contains enough detail and length that an executive summary is provided. This report is the type of information that cities should be providing, but the City of Wichita does not do this.

    Example from the Lawrence report. Click for larger.
    It’s not like the City of Wichita does not realize the desirability of providing citizens with information. In fact, Wichitans have been teased with the promise of more information in order to induce them to vote for higher taxes. During the campaign for the one cent per dollar Wichita city sales tax in 2014, a city document promised this information regarding economic development spending if the tax passed: “The process will be transparent, with reports posted online outlining expenditures and expected outcomes.” (This is what Lawrence has been doing for several years.)

    The city should implement this reporting even though the sales tax did not pass. If it’s good for citizens to have this type of information if the sales tax had passed, it’s good for them to know in any circumstance, because the city (and other overlapping governmental jurisdictions) still spends a lot on economic development.

    Why is this information not available? Is the communications staff overwhelmed, with no time to provide this type of information?

    During the sales tax campaign Wichita city staff had time to prepare news releases with titles like “City to Compete in Chili Cook-off” and “Jerry Seinfeld Returns to Century II.” Now the city produces headlines like “Wichita Transit to Receive Good Apple Award.”

    But if you want to know how the city spends economic development dollars, you won’t find that.

    There are other things:

    Most of all, the city simply needs to change its attitude. Here’s an example.

    Citizen watchdogs need access to records and data. The City of Wichita, however, has created several not-for-profit organizations that are controlled by the city and largely funded by tax money. The three I am concerned with are the Wichita Downtown Development Corporation, Visit Wichita (the former Go Wichita Convention and Visitors Bureau), and Greater Wichita Economic Development Coalition, now the Greater Wichita Partnership. Each of these agencies refuses to comply with the Kansas Open Records Act, using the reasoning that they are not “public agencies” as defined in the Kansas law that’s designed to provide citizen access to records.

    The city backs this interpretation. When legislation was introduced to bring these agencies under the umbrella of the Kansas Open Records Act, cities — including Wichita — protested vigorously, and the legislation went nowhere.

    Recently the City of Wichita added a new tax to hotel bills that may generate $3 million per year for the convention and visitors bureau to spend. Unless the city changes its attitude towards citizens’ right to know, this money will be spent in secret.

    This attitude has been the policy of the city for a long time. In 2008, Randy Brown, at one time the editorial page editor at the Wichita Eagle wrote this:

    I’m fairly well acquainted with Bob Weeks, our extraconservative government watchdog. It’s fair to say that I agree with Weeks no more than one time in every 20 issues. But that one time is crucial to our democracy.

    Weeks is dead-on target when he says that conducting the public’s business in secret causes citizens to lose respect for government officials and corrupts the process of democracy (“TIF public hearing was bait and switch,” Dec. 5 Opinion). And that’s what happened when significant 11th-hour changes to the already controversial and questionable tax-increment financing plan for the downtown arena neighborhood were sneaked onto the Wichita City Council’s Tuesday agenda, essentially under cover of Monday evening’s darkness.

    This may not have been a technical violation of the Kansas Open Meetings Act, but it was an aggravated assault on its spirit. Among other transgressions, we had a mockery of the public hearing process rather than an open and transparent discussion of a contentious public issue.

    The Wichita officials involved should publicly apologize, and the issue should be reopened. And this time, the public should be properly notified.

    Randy Brown
    Executive director
    Kansas Sunshine Coalition for Open Government

    A few years later, Brown noticed the attitude had not improved. Although he did not mention him by name, Brown addressed a concern expressed by Wichita City Council Member Pete Meitzner (district 2, east Wichita). He accurately summarized Meitzner’s revealed attitude towards government transparency and open records as “democracy is just too much trouble to deal with.”

    I don’t think things have improved.

    —
    Notes

    1. For example, in his State of the City address for 2011, Brewer listed as an important goal for the city this: “And we must provide transparency in all that we do.” See https://drive.google.com/open?id=1xgx96BEXALDEgLBRcQdz2Kg0_W5x3e2J. ↩
    2. “The City Council has stressed the importance of transparency for this organization,” City Manager Robert Layton said. “We’re honored to receive a Sunny Award and we will continue to empower and engage citizens by providing information necessary to keep them informed on the actions their government is taking on their behalf.” Wichita City New Release. Available at https://www.wichita.gov/News/Pages/2013-03-18b.aspx. ↩
    3. Wichita Eagle Editorial Board. *Fight for transparency during ‘Sunshine Week’ and year-round.” Available at https://www.kansas.com/article227430494.html. ↩
  • Wichita ballpark STAR bonds, 2018 issue

    Wichita ballpark STAR bonds, 2018 issue

    A bond disclosure document anticipated a development agreement for land surrounding the new Wichita ballpark.

    When offering bonds for sale, issuers file a disclosure document that is often full of interesting detail. In the disclosure for the STAR bonds for the new Wichita ballpark, we learn this:

    The City and the owner of the minor league team are anticipated to enter into a development agreement whereby the owner has the ability to develop approximately 15 acres of property surrounding the stadium. The development agreement is anticipated to require development to commence within 18 months of completion of the stadium and include the development of a hotel, retail spaces, restaurants and bars to complement the stadium and surrounding areas.

    This is from a document dated November 1, 2018 and filed with the Municipal Securities Rulemaking Board on November 16, 2018. This seems to contradict a claim made by Wichita Mayor Jeff Longwell and other city officials that the city was barred from disclosing the fact of land development negotiations until last week. The bond disclosure is silent regarding terms of an agreement.

    Following are some excerpts from the disclosure. The complete document is available at https://emma.msrb.org/IssueView/Details/ER387382.

    $42,140,000
    City of Wichita, Kansas
    Sales Tax Special Obligation Revenue Bonds
    (River District Stadium Star Bond Project)
    Series 2018

    Official Statement dated November 1, 2018

    STAR Bonds Overview

    (page 1)

    “Sales tax and revenue” bonds (“STAR Bonds”) are authorized to be issued by the City pursuant to K.S.A. 12-17,160. et seq., as amended (the “STAR Bond Act”), The STAR Bond Act provides a form of tax increment financing that enables the issuance of bonds payable from certain State and local sales and compensating use tax revenues generated from STAR Bond projects constructed within a STAR Bond district.

    To implement STAR Bond financing, a local government must adopt a resolution that specifies a proposed STAR Bond project district’s boundaries and describes the overall district plan, hold a public hearing on the district and the plan, and pass an ordinance that establishes the STAR Bond project district.

    There may be one or more proposed STAR Bond projects within a STAR Bond project district. As with the STAR Bond project district, the local government must adopt a resolution, hold a hearing, and pass an ordinance that establishes each such STAR Bond project. Each project also must have a project plan that includes a description and map of the project area, a plan for relocating current residents and property owners, a detailed description of the proposed buildings and facilities and a feasibility study showing that the project will have a significant economic impact, generate enough tax revenues to pay off STAR Bonds proposed to be issued to finance the project, and not adversely affect existing businesses or other STAR Bonds that have already been issued. STAR Bonds can be used to pay for certain costs of a STAR Bond project, including property acquisition, site preparation, infrastructure improvements, certain hard construction costs, bond issuance costs, bond financing costs, loan financing costs, and related soft costs.

    The District and the Project

    (page 2)

    In 2007, the City adopted the River District STAR Bond Project Plan (the “Original Project Plan”) for an approximately 210 acre tract known as the East Bank Redevelopment District (the “Original District” or the “Phase I Project Area”). The Original Project Plan anticipated a $155.8 million redevelopment project along the banks of the Arkansas River (the “River”) through the City’s Central Business District.

    In December 2016, the City adopted an ordinance to expand the boundaries of the Original District by adding approximately 64 acres located on the west bank of the River north from Kellogg Avenue to approximately 1st Street (the “Additional Property.” the “West Bank Project Area” or the “Phase II Project Area”). The West Bank Project Area includes commercial properties, the City’s Lawrence-Dumont Baseball Stadium, the Wichita Ice Center and the Wichita Public Library’s Advanced Learning Library. The Original District, as expanded by the Additional Property, is referred to herein as the “STAR Bond District” or the “District.”

    The West Bank Project Area was added to the Original District to fund additional riverbank improvements between Douglas Avenue and the Kellogg Avenue Bridge, to install a pedestrian bridge to connect the performing arts area on the East Bank with the sports and entertainment area on the West Bank, to construct a multi-sport athletic facility that will replace the existing Lawrence-Dumont Baseball Stadium on the same site and to construct a baseball-themed spoils museum in conjunction with the multi-sport athletic facility. On December 20, 2016. the Secretary of Commerce of the State of Kansas (the “Secretary”) determined that the District, as expanded by the Additional Property, is an “eligible area” within the meaning of the STAR Bond Act.

    On January 3, 2017, the City adopted an ordinance to approve the Project Plan Amendment to the STAR Project Plan, dated as of December 2016 (the “STAR Bond Project Plan Amendment”). The STAR Bond Project Plan Amendment included a pedestrian bridge across the River, a baseball/sports museum, riverbank improvements and design and site work related to the baseball stadium. Major components of the STAR Bond Project Plan Amendment and the Phase II Project Plan (the “2018 Projects”) include the following:

    (i) the replacement of the City’s existing Lawrence-Dumont Baseball Stadium expected to be the home a Triple-A minor league affiliate of the Miami Marlins;
    (ii) a museum and home of the National Baseball Congress; and
    (iii) a pedestrian bridge across the River.

    (page 5)

    The proceeds of the Series 2018 Bonds, along with other available fluids, will be used to (i) pay a portion of the costs of the 2018 Projects; (ii) fond a deposit to the Capitalized Interest Fund established under the Indenture for the Series 2018 Bonds to be used to pay interest on the Series 2018 Bonds through September 1, 2020; and (iii) pay certain costs related to the issuance of the Series 2018 Bonds.

    (Page 8)

    THE DISTRICT AND THE 2018 PROJECTS

    The Original STAR Bond District and the Original Project

    In 2007, the City adopted the Original Project Plan for the Original District. The Original Project Plan anticipated a $155.8 million redevelopment project along the banks of the River through the City’s Central Business District. The first phase of the project plan extended from the First/Second Street Bridge to the Central Avenue (Little Arkansas) and Seneca Street (Big Arkansas) bridges. It included upgrades to the area surrounding the Keeper of the Plains statue at the confluence of the rivers. Additional construction included a portion of the South Riverbank to the west of Exploration Place, two cable-stayed pedestrian bridges linking the Keeper of the Plains monument to the outer banks of each river, and work along the East Riverbank from Central to First Street. The first phase also included construction of the Fountains at WaterWalk, a fountain attraction incorporating programmed water jets linked to lights and music.

    The East Riverbank Project was completed in 2011 as part of the Drury Plaza Hotel Broadview redevelopment. The $2,500,000 STAR revenue financed project involved extensive East Riverbank improvements north of Douglas Avenue. This project phase supported the $29 million Drury Plaza Hotel redevelopment project. Improvements included a venue space, pedestrian access from Waco Street and river overlook areas.

    The recently completed West Bank Apartments Project, located within the boundaries of the Original District, included a West Riverbank promenade between Second Street and Douglas Avenue and the Chisholm Trail McLean Memorial Fountain area, riverbank improvements with landscaping, fountains and walking/bike paths along the River. These improvements are associated with a tax increment financing and community improvement district development that includes an apartment complex, parking garage and a boat and bike rental facility. STAR Bonds financed $4,750,000 of West Riverbank improvements associated with the West Bank Apartments Project.

    The Expanded STAR Bond District

    In December 2016, the City adopted an ordinance to expanded the boundaries of the Original District by adding approximately 64 acres located on the west bank of the River north from Kellogg Avenue to approximately 1st Street (the “Additional Property,” the “West Bank Project Area” or the “Phase II Project Area”). The West Bank Project Area includes commercial properties, the City’s Lawrence-Dumont Baseball Stadium the Wichita Ice Center and the Wichita Public Library’s Advanced Learning Library. The Original District, as expanded by the Additional Property, is referred to herein as the “STAR Bond District” or the “District.” A map depicting the boundaries of the District, is set forth above.

    The West Bank Project Area was added to the Original District to fund additional riverbank improvements between Douglas Avenue and the Kellogg Avenue Bridge, to install a pedestrian bridge to connect the performing arts area on the East Bank with the sports and entertainment area on the West Bank, and to construct a baseball-themed sports museum on the site of the Lawrence-Dumont Baseball Stadium. On December 20, 2016, the Secretary of Commerce of the State of Kansas (the “Secretary”) determined that the District, as expanded by the Additional Properly, is an “eligible area” within the meaning the of the STAR Bond Act.

    The 2018 Projects

    On January 3, 2017, the City adopted an ordinance adopting the STAR Bond Project Plan Amendment which provided for additional development within the District. On March 20, 2017, the Secretary took the following actions with respect to the District and the STAR Bond Project Plan Amendment:

    (1) found and determined that the District, as expanded, is a major commercial entertainment and tourism area and an “eligible area” within the meaning of the STAR Bond Act;
    (2) approved and designated improvements to the West Bank of the Arkansas River and enhanced public improvements within the District as part of a “STAR bond project” within the meaning of the STAR Bond Act; and
    (3) approved the issuance of up to $19,500,000 (exclusive of approved financing costs) in STAR Bond financing for the improvements and amenities related to the STAR Bond Project Plan Amendment.

    On May 2, 2017, the City adopted an ordinance adopting the River District Phase II STAR Bond Project Plan (the “Phase II Project Plan”) which provides for the redevelopment of the West Bank Project Area. On April 30, 2018, the Secretary took the following actions with respect to the District and the Phase II Project Plan:

    (1) found and determined that the District, as expanded, includes a “major multi-sport athletic facilities” and museum components and is an “eligible area” within the meaning of the STAR Bond Act;
    (2) approved and designated improvements to the East Bank of the Arkansas River and enhanced public improvements within the District as part of a “STAR bond project” within the meaning of the STAR Bond Act; and
    (3) approved the issuance of up to $20,500,000 (exclusive of approved financing costs) in STAR Bond financing for the improvements and amenities related to the Phase II Project Plan.

    Major components of the Phase II Project Plan (also known as the “2018 Project”) include the following:

    (i) the replacement of the City’s existing Lawrence-Dumont Baseball Stadium which is expected to be the home a Triple-A minor league affiliate of the Miami Marlins;
    (ii) a museum and home of the National Baseball Congress; and
    (iii) a pedestrian bridge across the River.

    The estimated overall plan of finance for the 2018 Projects includes the use of fluids provided from other available City fluids or borrowings, including proceeds of general obligation bonds and revenues from tax increment financing districts and community improvement districts, which proceeds are expected to be available in the first half of 2019. The following table provides a summary of the sources and uses of such funds:

    Sources of Funds
    STAR Bonds: 40,000,000.00
    Available City Funds & Financing: 43,000,000.00
    Total Sources: 83,000,000.00

    Uses of Funds
    Stadium & Museum: 75,000,000.00
    Pedestrian Bridge: 3,000,000.00
    Riverbank Improvements: 3,000,000.00
    Parking & Infrastructure: 2,000,000.00
    Total Uses: 83,000,000.00

    The existing Lawrence-Dumont Baseball Stadium was constructed in 1934 as part of the Works Progress Administration during the Great Depression. The stadium previously served as the home to the Wichita Wranglers (Class AA Texas League) through the 2007 baseball season. As part of the plans to continue to redevelop the City’s downtown area, the City has estimated the demolition of the current stadium by year end 2018 and completion of the new stadium by March 2020. The new facility is estimated to include 6,500 to 7,000 fixed seats, with group areas and other spaces bringing total capacity to around 10,000. The stadium will serve as the home for a to-be-named Triple A minor league affiliate of the Miami Marlins and be used to hold concerts and various high school and collegiate sporting events.

    The City and the owner of the minor league team are anticipated to enter into a development agreement whereby the owner has the ability to develop approximately 15 acres of property surrounding the stadium. The development agreement is anticipated to require development to commence within 18 months of completion of the stadium and include the development of a hotel, retail spaces, restaurants and bars to complement the stadium and surrounding areas.

    Other Anticipated Development in the District

    Anticipated future phases of development expected to occur within the West Bank Project Area include: (i) completion of the west bank corridor improvements from Douglas Avenue south to Kellogg with an estimated $5 million in STAR Bond funded improvements for a plaza and riverbank amenities designed to complement the stadium and surrounding Delano neighborhood; (2) an East Bank Catalyst Site north of the Broadview Hotel redevelopment site and across the River from the West Bank Apartments Project (as described above), with an anticipated $40 million mixed-use development along the river that complements both the River corridor and adjacent Broadview Hotel and includes an estimated $4 million in STAR Bond financed plaza and River bank amenities; and (3) development of the area referred to as the Upper Reach, extending from the Seneca Street Bridge to Sim Park on the opposite side of the River.

    The City and EPC Real Estate Group. LLC (the “Delano Catalyst Site Developer”) have entered into a Development Agreement relating to certain property within the West Bank Project Area, consisting to the property south and east of the Wichita Public Library’s Advanced Learning Library. Pursuant to the Development Agreement, the Delano Catalyst Site Developer has agreed to develop the property to include the following:

    • a public greenway/gathering area on the property;
    • an apartment complex consisting of a minimum of 180 apartment units;
    • a hotel consisting of a minimum of 90 guest rooms;
    • a minimum of 114 parking spaces available to the public; and
    • a minimum of 5,000 square feet of Class A commercial space.

    The Delano Catalyst Site Developer has agreed to meet certain project milestones in connection with the development of the property, including full project completion by October 1, 2020.

    Projected Incremental Tax Revenues

    (page 14)

    Click here to view Wichita ballpark STAR bonds series 2018 projected incremental tax revenues.pdf

    (page 15)

    SOURCES AND USES OF FUNDS

    The following sets forth the estimated sources and uses of fluids relating to the proceeds of the Series 2018 Bonds:

    Sources of Funds
    Series 2018 Bond Principal: 42,140,000.00
    Net Original Issue Premium: 1,733,967.20
    Total Sources: 43,873,967.20

    Uses of Funds
    Deposit to Project Fund: 40,000,000.00
    Deposit to Capitalized Interest Fund: 3,276,163.30
    Costs of Issuance(1): 597,803.90
    Total Uses: 43,873,967.20

    (1) Includes underwriters’ discount (see “UNDERWRITING” herein) and other costs of issuance related to the Series 2018 Bonds.

    Debt Service Requirements

    (page 16)

    Click here to view Wichita ballpark STAR bonds series 2018 debt service requirements.pdf

  • Is the Wichita mayor satisfied with this?

    Is the Wichita mayor satisfied with this?

    A gloomy jobs forecast is greeted with apparent approval by Wichita Mayor Jeff Longwell.

    We have to wonder: Did Wichita Mayor Jeff Longwell read before tweeting?

    Click for larger.
    A recent Longwell tweet references news reports regarding a forecast from Intrust Bank Wealth Services. Titled 2019 Economic Outlook and Market Perspectives, it contains this regarding Wichita:

    The Wichita economy saw jobs lost in 2017, but improved last year. Job growth is expected to trend slightly higher in 2019, buoyed by manufacturing and professional services. We anticipate the Wichita economy to expand this year, but grow at slower rate than the U.S. and the majority of metro areas. Business/consumer optimism and aerospace demand should help power the local economy; however, trade issues, commodity prices, lack of skilled labor, and slow population growth will likely limit growth in southeast Kansas.

    There’s not much good news in this forecast, except that job growth is expected to grow rather than decline as it did two years ago. So we have to wonder why the mayor retweeted — presumably approvingly — this grim forecast.

    It’s a continuation of a trend:

    • Several times Longwell and other city officials have promoted a study claiming Wichita is a highly “recession-proof” city. That study is nonsense and ignores key economic data and the definition of a recession. See Wichita mayor promotes inaccurate picture of local economy and Wichita, a recession-proof city.

    • Responding to a different forecast of job growth in Wichita for 2019, Scot Rigby, who is Assistant City Manager, Director of Development Services for the City of Wichita, tweeted “great news.” But that forecast is as gloomy as the Intrust forecast, with job growth expected to be about half the national rate. See Job growth in Wichita: Great news?

    • Generally, Wichita officials are pleased with the local economy (Former Wichita City Council Member Pete Meitzner: “We have enjoyed great progress and growth during my two terms as a City Council member and I plan to do my part to assure Sedgwick County is part of this continued success.”) But the available statistics are grim and are improving only slowly. See Growing the Wichita economy.

    If Wichitans don’t read beyond the rosy headlines and tweets from the mayor and city officials, they will be uninformed, and unfortunately, misinformed by people we should be able to trust.

  • From Pachyderm: Wichita Mayor Jeff Longwell

    From Pachyderm: Wichita Mayor Jeff Longwell

    From the Wichita Pachyderm Club: Jeff Longwell, Mayor of the City of Wichita. This was recorded February 8, 2019.

  • Facade improvement program raises issues in Wichita

    Facade improvement program raises issues in Wichita

    An incentive program in Wichita should cause us to question why investment in Wichita is not feasible without subsidy.

    At its February 5, 2019 meeting, the Wichita City Council will consider an item regarding economic development in Delano. The owner of a building there has applied for financial assistance under the city’s facade improvement program.

    The purpose of the facade improvement program, according to city documents, is to provide “low-cost loans and grants” to help improve the appearance of buildings “located in defined areas needing revitalization, including the City’s core area.”

    The matter before the council this week is to accept the petition of the property owner and set February 19, 2019 for the public hearing.

    Undoubtedly council members will praise the property owner for deciding to invest in Wichita. I’m glad he is, and it sounds like the project will improve the Delano area. But the need for this item raises a few questions regarding public policy in Wichita that are more important than any single project.

    First, city documents state: “The Office of Economic Development has reviewed the economic (‘gap’) analysis of the project and determined there is a financial need for incentives based on the current market.” In other words, the city has determined that this project is not economically feasible unless it receives a government subsidy. Will any council members ask why is it not possible to renovate a building in the core of Wichita without subsidy? What factors in Wichita — specifically Delano — make it impossible to have investment like this without subsidy?

    Second: Wichita officials, especially Wichita Mayor Jeff Longwell, tell us that the city doesn’t use cash as an economic development incentive. But this proposal includes a cash grant of $30,000. This is not a low-cost loan that must be repaid. Instead, it is an incentive, a gift — and it’s cash.