Voice For Liberty

Tag: Wichita city council

  • Business improvement district on tap in Wichita

    Business improvement district on tap in Wichita

    The Douglas Design District seeks to transform from a voluntary business organization to a tax-funded branch of government.

    Tomorrow the Wichita City Council will consider forming a business improvement district (BID) in east-central Wichita. Previously, city documents offered some explanation regarding the district: 1

    First, there already exists a voluntary organization: “The Douglas Design District (DDD) is a voluntary organization of over 300 local businesses located near Douglas Avenue between Washington Avenue and Oliver Avenue. In 2017, the DDD established a five-year strategic plan to become a financially self-sustaining organization that is not reliant on elective membership.”

    The purpose of a business improvement district: “A BID provides for the administration and financing of additional and extended services to businesses within the district and is funded by the City levying a mandatory service fee on the businesses within the district.”

    Who will collect, and who will spend? “While the City levies the service fee, it can contract with a third-party organization such as the DDD to operate the BID. The approach is similar to that used by the City to contract with the Wichita Downtown Development Corporation in downtown.”

    All this is repeated in the agenda packet for this week’s meeting. 2

    The action on the agenda this week finalizes the district’s funding mechanism: “The annual fee ranges from $100 to $550 depending on the size of the business and is anticipated to generate approximately $50,000 a year.” By size, the city means the number of square feet. If a business or property owner does not pay, the city may start collection activity, although what that means is unspecified: “If any delinquent Fee or penalty is not paid within sixty (60) days from the date on which the Fee or penalty became delinquent, the City may give notice to the business of its intention to initiate a collection action.”

    Are BIDs a good idea? Most information about them is provided by their boosters, that is, those who directly benefit from the service fee, which is really a tax. But there are some doubters. The New Republic, by no means a conservative publication, printed a piece arguing against BIDs, stating: “But too often BIDs have turned against the businesses they were meant to serve, making the cost of entry into a new area even higher for local merchants, or lacking the transparency needed to instill trust from the community.” 3

    A larger and more balanced look at BIDs comes from Washington Monthly in 2018:

    The privatized structure of BIDs may raise liberals’ hackles, but it’s clear that BIDs can be a useful tool to remake neighborhoods into places where people actually want to spend their time. Many big-city mayors — who are overwhelmingly Democratic — have thrown their weight behind them. D.C. Mayor Muriel Bowser recently doled out grants totaling $300,000 to five neighborhoods thinking about forming their own BIDs. (One of the grantees, Dupont Circle, with the decaying park, will start collecting taxes from business owners in the fall.)

    Still, there are real downsides to BIDs for renters and small business owners, who will not benefit from rising property values and may ultimately be pushed out of the area. Luckily, this isn’t a hugely difficult problem to remedy. The best, and easiest, way to revamp how BIDs are run is through city halls; they’re the ones who legislate what BIDs can and can’t do, while holding them accountable to the public. But too often, they renege on that responsibility. 4

    From Canada, harsh criticism:

    In this paper, we propose and develop the concept of “socio-economic hygiene” to denote the ways in which neoliberal Western urban space is spatially regulated and re-oriented towards consumption in a way that reinforces social exclusion. … We conclude by tracking how sociological strategies of “hygiene” have moved from racial and biological features to features of place and socioeconomic status, and how BIDs, resembling genocidal states in certain ways, use these strategies to continually justify their own existence. 5

    Civil society, or government?

    What should trouble everyone is the replacement of civil society with political society. Edward H. Crane explains: “There are basically only two ways to organize society: Coercively, through government mandates, or voluntarily, through the private interaction of individuals and associations. … In a civil society, you make the choices about your life. In a political society, someone else makes those choices.”

    Right now DDD is a voluntary organization. Civil society, in other words. But now it is proposed to replace it with political society.

    Why trade voluntary cooperation for the force of government? The annual report of the DDD (included in the city council agenda packet in 2018) explains: “Approximately 1/3 of businesses in DDD’s project area are DDD members yet ALL businesses benefit from DDD’s efforts. A BID eliminates this ‘free rider’ problem and, if implemented, would allow DDD to have a singular focus on implementing the BID business plan rather than always chasing membership.” For emphasis, the report notes: “THE PAYMENT OF THE BID ASSESSMENT WILL REPLACE MEMBERSHIP DUES.”

    Another term for chasing membership is selling your product by showing how it creates value. If the formation of the BID is successful, the Douglas Design District will be relieved of this necessity. Will having a guaranteed source of revenue make DDD more or less responsive to its members?

    Also, the DDD annual report states: “A BID assessment is not a tax.” But for those who decide to skip paying this tax? After a few years, they will experience the blunt power of government tax collection.

    Taxation without transparency

    The agenda packet states this about the relationship between the city and the district: “While the City levies the service fee, it can contract with a third-party organization such as the DDD to operate the BID.”

    Wichita has similar organizations. One is the Wichita Downtown Development Corporation, now known as Downtown Wichita. This organization is funded nearly entirely by tax revenue from an improvement district. Yet, it refuses to make its spending records public, and the city supports that decision. 6

    Another similar taxpayer-funded organization is the city’s convention and tourism bureau, which has gone by several names over the years. Regarding it, in 2012 I wrote:

    We’ve learned that city council members rely on — as Randy Brown told the council last year — facile legal reasoning to avoid oversight: “It may not be the obligation of the City of Wichita to enforce the Kansas Open Records Act legally, but certainly morally you guys have that obligation. To keep something cloudy when it should be transparent I think is foolishness on the part of any public body, and a slap in the face of the citizens of Kansas. By every definition that we’ve discovered, organizations such as Go Wichita are subject to the Kansas Open Records Act.” 7

    Of interest is a segment from the KAKE Television public affairs program “This Week in Kansas” where the failure of the Wichita City Council, especially council member Pete Meitzner (district 2, east Wichita), to recognize the value of open records and open government is discussed. Video is here.

    Since this time, the city has formed a business improvement district known as a TBID. It covers all hotels in the city and imposes an additional 2.75 percent tax to hotel bills, although the city and hotels call it a “City Tourism Fee.” 8 I’ve not asked for records of this spending, but I am sure the request would be rejected.

    Will the Douglas Design District follow the standard set by Wichita’s other improvement districts and evade accountability and transparency?

    Results from current improvement districts

    The Washington Monthly piece mentions that city halls can hold BIDs accountable. But lack of transparency works against oversight and accountability.

    Then, if anyone wonders what about the results of Wichita’s improvement districts, here are a few findings:

    • For the past decade business activity in downtown Wichita has been on a downhill trend. The data for 2017 (the most recent year for data) holds good news, with business activity rising. It isn’t the vibrant growth we’ve been told is happening in downtown Wichita, but at least things are not getting worse. 9
    • Truthfulness is in short supply. The Downtown Wichita organization has been caught in either a huge lie or gross incompetence regarding its claim of the number of people working in downtown Wichita. After brought to its attention, the number is no longer used. 10
    • Wichita economic development officials use a circuitous method of estimating the population of downtown Wichita, producing a number much higher than Census Bureau estimates. 11
    • Looking at hotel guest tax receipts, which are a surrogate for total hotel room revenue, we observe that of the largest markets in Kansas, Wichita has experienced nearly the least growth in hotel guest tax collections since 2010. 12

    Despite this record, Wichita City Hall seems satisfied with these results.

    —
    Notes

    1. City of Wichita. Agenda for August 21, 2018, Item IV-1. Available at http://www.wichita.gov/Council/Agendas/08-21-2018%20City%20Council%20Agenda%20Packet.pdf. ↩
    2. City of Wichita. Agenda for January 14, 2020, Item V-4. Available at https://wichita.gov/Council/Agendas/01-14-2020%20Agenda%20Packet.pdf. ↩
    3. Max Rivlin-Nadler. Business Improvement Districts Ruin Neighborhoods. The New Republic, February 19, 2016. Available at https://newrepublic.com/article/130188/business-improvement-districts-ruin-neighborhoods. ↩
    4. Saahil Desai. One Landlord, One Vote. Available at https://washingtonmonthly.com/magazine/july-august-2018/one-landlord-one-vote/. ↩
    5. Sanscartier, Matthew D.; Gacek, James. Out, Damned Spot: Socio-economic Hygienic Practices of Business Improvement Districts. Canadian Journal of Urban Research. Winter 2016, Vol. 25 Issue 2, p73-85. ↩
    6. Weeks, Bob. Wichita’s open records policy is contrary to the interests of citizens. Available at https://wichitaliberty.org/wichita-government/wichita-open-records-policy-contrary-interests-citizens/. ↩
    7. Weeks, Bob. Wichita, again, fails at open government. Available at https://wichitaliberty.org/open-records/wichita-again-fails-at-open-government/. ↩
    8. Weeks, Bob. Wichita seeks to add more tax to hotel bills. Available at https://wichitaliberty.org/wichita-government/wichita-seeks-add-tax-hotel-bills/. ↩
    9. Weeks, Bob. Downtown Wichita jobs rise Available at https://wichitaliberty.org/economics/downtown-wichita-jobs-rise/. ↩
    10. Weeks, Bob. Downtown Wichita jobs, sort of. Available at https://wichitaliberty.org/wichita-government/downtown-wichita-jobs/. ↩
    11. Weeks, Bob. Downtown Wichita population is up Available at https://wichitaliberty.org/wichita-government/downtown-wichita-population-is-up-2018/. ↩
    12. Weeks, Bob. Updated: Kansas hotel guest tax collections Available at https://wichitaliberty.org/economics/updated-kansas-hotel-guest-tax-collections/. ↩
  • It may become more expensive in Wichita

    It may become more expensive in Wichita

    The City of Wichita plans to create a large district where extra sales tax will be charged.

    At next Tuesday’s Wichita City Council meeting, the council will consider imposing additional taxes in downtown Wichita and Delano. The new tax district includes the new baseball park and large amounts of surrounding land, some of the land in Waterwalk east of the Arkansas River, and land as far north as First and Waco.

    The new tax is known as a Community Improvement District, or CID. In these districts, merchants charge additional sales tax which is used to benefit the owners of property in the district. In this case, the city is proposing to add two cents per dollar to the existing 7.5 percent sales tax.

    City documents give this for the use of the funds: “CID revenue will be used for the design and construction of the stadium utilities, parking, and other improvements related to the stadium, river corridor improvements and surrounding development on the west bank, within the district.”

    Of note, the city proposes to pass the ordinance on emergency first reading.

    Following, a map of the CID. Click for a larger version.

  • Downtown Wichita population is up

    Downtown Wichita population is up

    New Census Bureau data shows the population growing in downtown Wichita.

    Data released today by the United States Census Bureau shows the estimated population for zip code 67202 in 2018 was 1,671, an increase of 73 from the prior year.

    Zip code 67202 is greater downtown Wichita, from the Arkansas River east to Washington, and Kellogg north to Central, roughly.

    The source of this data is U.S. Census Bureau, 2014-2018 American Community Survey 5-Year Estimates. This means the data is not the Bureau’s estimate of the population in 2018. For areas of population less than 65,000, the Bureau does not provide one-year estimates. Instead, the five-year estimates use data gathered over a longer time period in order to provide greater accuracy. The 90 percent confidence interval for the 2018 estimate is plus or minus 214 persons.

    The Bureau cautions that the five-year estimates should not be used as the population of the year in the midpoint of the five-year period: “Therefore, ACS estimates based on data collected from 2011–2015 should not be labeled ‘2013,’ even though that is the midpoint of the 5-year period.” (See below for more about these data.)

    Further, the Bureau issues this advice: “However, in areas experiencing major changes over a given time period, the multiyear estimates may be quite different from the single-year estimates for any of the individual years.” Downtown Wichita, I believe, qualifies as an area “experiencing major changes.” The five-year estimates must be considered in light of this advice.

    Still, as shown in the nearby table and charts, the ACS numbers are far below the population reported by the downtown Wichita development agency Downtown Wichita. See my article Downtown Wichita population for more about this topic.

    Following, excerpts from the Census Bureau publication Understanding and Using American Community Survey Data: What All Data Users Need to Know.

    Understanding Period Estimates
    Single-year and multiyear estimates from the ACS are all “period” estimates derived from a sample collected over a period of time, as opposed to “point-in-time” estimates such as those from past decennial censuses. For example, the 2000 Census “long form” sampled the resident U.S. population as of April 1, 2000.

    While an ACS 1-year estimate includes information collected over a 12-month period, an ACS 5-year estimateincludes data collected over a 60-month period.

    In the case of ACS 1-year estimates, the period is the calendar year (e.g., the 2015 ACS covers the period from January 2015 through December 2015). In the case of ACS multiyear estimates, the period is 5 calendar years (e.g., the 2011–2015 ACS estimates cover the period from January 2011 through December 2015). Therefore, ACS estimates based on data collected from 2011–2015 should not be labeled “2013,” even though that is the midpoint of the 5-year period.

    Multiyear estimates should be labeled to indicate clearly the full period of time (e.g., “The child poverty rate in 2011–2015 was X percent.”). They do not describe any specific day, month, or year within that time period.

    Multiyear estimates require some considerations that single-year estimates do not. For example, multiyear estimates released in consecutive years consist mostly of overlapping years and shared data.

    The primary advantage of using multiyear estimates is the increased statistical reliability of the data compared with that of single-year estimates, particularly for small geographic areas and small population subgroups. Figure 3.2 shows the improved precision of an ACS 5-year estimate, compared with a 1-year estimate, for child poverty statistics in Rice County, Minnesota—a county with about 65,000 residents in 2015. The lines above and below the point estimates represent the confidence intervals, or ranges of uncertainty, around each estimate. The confidence interval for the 1-year child poverty estimate ranges from 1.4 percent to 9.4 percent (8 percentage points) while the interval for the 5-year estimate is narrower, ranging from 12.8 percent to 19.2 percent (6 percentage points). (Refer to the section on “Understanding Error and Determining Statistical Significance” for a detailed explanation of uncertainty in ACS data.)

    Deciding Which ACS Estimate to Use
    For data users interested in obtaining detailed ACS data for small geographic areas (areas with fewer than 65,000 residents), ACS 5-year estimates are the only option.

    The 5-year estimates for an area have larger samples and smaller margins of error than the 1-year estimates. However, they are less current because the larger samples include data that were collected in earlier years. The main advantage of using multiyear estimates is the increased statistical reliability for smaller geographic areas and small population groups.

    However, in areas experiencing major changes over a given time period, the multiyear estimates may be quite different from the single-year estimates for any of the individual years. The single year and multiyear estimates will not be the same because they are based on data from two different time periods.

  • Wichita water plant contract

    Wichita water plant contract

    Wichita should consider discarding the water plant contract in order to salvage its reputation and respect for process.

    This week the Wichita City Council will consider approving a contract with Wichita Water Partners to build a new water treatment plant. It’s a controversial matter that likely played a significant role in the recent mayoral election. Wichita Eagle reporting by Chance Swaim in the story Wichita’s mayor steered multi-million-dollar water plant contract to friends traces through the issues.

    The most important thing is that the city receives a reliable water plant that meets its needs. Currently, the city operates a plant that is the only source of water. It’s described as having outlived its useful life. At any moment over the next several years, the city might have to spend millions to repair a plant it will retire soon.

    It’s also important that the city does not reward the corruption — petty or not — surrounding the awarding of this contract. Mayor Longwell was defeated in his bid for reelection, and that sends a message. But the other corrupt party is being rewarded, as it seems likely the city council will approve the contract with Wichita Water Partners. Its principals sought to influence the mayor by wining and dining. (Literally, they offered to deliver leftover wine to the mayor.) They flattered the mayor with honorifics like Mayor Miracle, Your Eminence, His Highness, Homecoming Queen, Eye Candy, Jethro, and Wine Delivery Guy.

    Besides this, Wichita Water Partners was not honest with the city. The Wichita Eagle reported this: “Rod Young, president of the engineering firm PEC, and Roger McClellan, president of the construction company Wildcat, both acknowledged to The Eagle their relationships with the mayor. They did not disclose those relationships to the city on a form asking about potential conflicts of interest in the water project.” (emphasis added) PEC and Wildcat are part of Wichita Water Partners.

    But the coddling of Longwell worked. After paying the mayor’s $1,000 fee to enter a charity golf tournament, Longwell told them, “I’m going to be super nice to you for a long time.” Longwell switched the basis of awarding the contract, proposing a “design competition.” But only one firm entered the competition, Wichita Water Partners. Jacobs, one of the largest engineering firms, was originally and unanimously preferred by the city’s selection committee. But the company decided not to enter the design competition. The result was only one company participating in the mayor’s “contest.”

    There are important considerations going forward, especially as the city considers spending one billion dollars or more on new projects like a convention center, performing arts center, and other downtown projects:

    • The selection committee had significant concerns regarding Wichita Water Partners and its proposal. Since the city overrode the committee’s strong recommendation, will the recommendation of other similar committees be taken seriously? Will other committees feel their job is important? What about citizen advisory boards?

    • One of the nation’s largest and most respected engineering firms declined to participate in the mayor’s “design contest.” Will the city be able to attract bids from other reputable firms given the way the water plant contract process was changed? Will future bidders fear that the city’s bid process will be changed just before the contract is awarded, after bidders have spent time and money preparing their bids?

    • While Mayor Longwell will be leaving office soon, other city officials who enabled the process — elected and others — are still in place.

    This is not the way to do business, even though the government is not a business. As the Wichita Eagle editorialized: “Longwell steered the council away from its earlier decision on how to award the water plant contract — away from competitive bidding and toward shadier ways of doing business — and that is unacceptable.”

    While Longwell was defeated in an election, the other party to the “shadier ways of doing business” won. That’s bad for the city right now, and bad for the city looking forward.

    Should the city discard the Wichita Water Partners contract this week, as is its right? Undoubtedly, starting the bid process again would add cost and cause further delay. And, given the city’s conduct, would a new bid process attract quality proposals?

    Canceling the contract and starting over is worth deliberation and consideration. Our city’s reputation and respect for process are more important than any single contract, even its largest.

  • The Wichita baseball team’s name

    The Wichita baseball team’s name

    Is the name of the new Wichita baseball team important? Yes, as it provides insight.

    Whatever you may think of the name of the new Wichita baseball team, it’s important. Important because the city is spending many millions on the stadium, much of it borrowed through bonds that must be repaid if the team doesn’t generate as much success (and tax revenue) as planned.

    Additionally, the city is depending on the team owners to successfully develop the four acres of surrounding land that the city gave to them. (Well, almost gave to them. They paid about four dollars.) Without successful development, the city and its residents are in trouble.

    But given that the reaction to the name is near-universal scorn, I don’t have a lot of confidence in the team owners and their judgment.

    Still, there are knowledgeable Wichitans who are praising the team’s ownership and management. I would suggest asking the people of New Orleans what they think of the promises made to them by Lou Schwechheimer, the majority owner of the team. See Coverage of Wichita baseball owner Lou Schwechheimer and Wichita vets its baseball partner(s).

    Can a city’s political and bureaucratic leaders want something so badly that they make bad decisions regarding who to choose as partners and how to structure the partnership? Yes, I’m afraid so.

  • Wichita consent agenda reform proposed

    Wichita consent agenda reform proposed

    The Wichita city council will consider reforms to the consent agenda.

    Next week the Wichita City Council will consider changes to the form of city council meetings, specifically the consent agenda. 1

    A consent agenda is a group of items — perhaps as many as two dozen or so — that are voted on in bulk with a single vote. If the consent agenda is passed, each individual item on the consent agenda is also considered as passed. An item on a consent agenda will be discussed only if a council member requests the item to be “pulled.” If that is done, the item will be discussed. Then it might be withdrawn, delayed to a future meeting, voted on by itself, or folded back into the consent agenda with the other items. Generally, consent agenda items are considered by the city to be routine and non-controversial, but that is not always the case.

    The city proposes two main changes. First, a draft, or proposed consent agenda will be presented to the mayor and vice mayor one week before a council meeting, with the finalization on Friday. City documents explain:

    A draft consent agenda will be presented to the mayor and vice mayor one week before the scheduled city council meeting. The mayor and vice mayor will make a preliminary designation of the items to be included on the consent agenda. The consent agenda will be considered only a draft until it is endorsed by the city council during its regular Friday agenda review meeting.

    Second, there is a list of items considered appropriate for inclusion on the consent agenda, as presented below.

    In the past, the city has placed major items on the consent agenda, such as authorizing a $2 million contract with the city’s convention and visitors’ bureau. 2

    Notably, this summer the city placed a long-term lease with a proposed airport hotel on the consent agenda. Before the meeting, it was found the contract had many errors. 3 At that time, Wichita Mayor Jeff Longwell expressed frustration with items such as this being placed on the consent agenda and said he would propose changes. 4

    Items appropriate for consent agenda

    From the proposed ordinance:

    In order to provide City staff with additional guidance, the following items are considered appropriate for the consent agenda:

    1. Applications for licenses
    2. Community event requests
    3. Street closures
    4. Preliminary construction estimates
    5. Petitions for public improvements
    6. Design services agreements and supplements to design services agreements
    7. Sale of remnant parcels and property previously designated as surplus
    8. Purchase of property for right-of-way
    9. Second reading ordinances
    10. Property acquisitions
    11. Minutes of advisory boards and commissions
    12. One year agreements, agreement amendments or agreement extensions with a value of $100,000 or less
    13. Grant applications and awards if the local match is less than $100,000
    14. Change orders
    15. Settlement agreements
    16. Establishing public hearing dates for the repair and removal of dangerous structures
    17. Authorizing note and bond sales
    18. Zoning applications that have no protest and are recommended for approval by the DAB and MAPC
    19. Nuisance assessments

    —
    Notes

    1. Wichita City Council agenda packet for November 19, 2019, item V-2. ↩
    2. See, for example, For Wichita, another agenda surprise at https://wichitaliberty.org/wichita-government/wichita-another-agenda-surprise/, Naftzger Park costs up, yet again at https://wichitaliberty.org/wichita-government/naftzger-park-costs-up-yet-again/, In Wichita, spending semi-secret at https://wichitaliberty.org/wichita-government/wichita-spending-semi-secret/, A consultant to help Wichita’s confidence factor at https://wichitaliberty.org/wichita-government/consultant-help-wichita-confidence-factor/, For Wichita City Council, discussion is not wanted at https://wichitaliberty.org/wichita-government/for-wichita-city-council-discussion-is-not-wanted/, In Wichita, a gentle clawback at https://wichitaliberty.org/wichita-government/in-wichita-a-gentle-clawback/, Wichita, again, fails at government transparency at https://wichitaliberty.org/wichita-government/wichita-fails-government-transparency/, and Wichita open records issue buried at https://wichitaliberty.org/open-records/wichita-open-records-issue-buried/. ↩
    3. Lefler, Dion. What’s up with the new airport hotel? Wichita scrambles to correct errors before vote. Wichita Eagle, June 24, 2019. Available at https://www.kansas.com/news/politics-government/article231911503.html. ↩
    4. Lefler, Dion. Longwell proposes changes in city process after airport hotel blunder. Wichita Eagle, June 28, 2019. Available at https://www.kansas.com/news/politics-government/article232088887.html. ↩
  • From Pachyderm: Wichita City Council Candidates

    From Pachyderm: Wichita City Council Candidates

    From the Wichita Pachyderm Club this week: Wichita city council candidates from district 2. This audio presentation or podcast was recorded on October 11, 2019. Todd Johnson is the moderator.

    Candidates are, in order of first speaking, Rodney Wren, Becky Tuttle, and Joseph Scapa.

  • In Wichita, more tax increment financing

    In Wichita, more tax increment financing

    The Wichita city council will consider expanding an existing TIF, or tax increment financing district.

    Tomorrow the Wichita City Council will consider expanding the boundaries of an existing tax increment financing district in downtown Wichita. 1

    According to city documents for this agenda item,

    Expanding the District would allow the Developer to capture the additional increment generated by the increased value of the Ice House building for pay-as-you-go reimbursement of eligible TIF expenses within the TIF district. The Developer would also be reimbursed for the TIF eligible costs related to redevelopment of the Ice House building.

    Further:

    The project includes up to $317,170 in infrastructure improvements that would be TIF eligible. The Developer proposes that tax increment financing be used to pay for eligible redevelopment project costs on a “pay-as-you-go” basis, for site preparation and infrastructure improvements.

    This may be confusing, so here it is in a nutshell: The city will be diverting up to $317,170 in future property tax paid by the developer. Instead of these taxes going to pay for operations of the city, county, and school district, these taxes will be given back to the developer.

    Usually, economic development incentives such as tax increment financing, or TIF, are justified because they create jobs. For this building, according to Wichita Eagle reporting from August, the two tenants that will occupy most of the space are existing companies that are moving from other parts of Wichita.

    In addition, Gary Oborney, Manager of Union Station, LLC and Ice House, LLC, the company that is receiving the benefit of tax increment financing, has made these recent campaign contributions, according to campaign finance reports filed in July:

    On March 18, 2019, $250 to Wichita Mayor Jeff Longwell.

    On July 2, 2019, $250 to Wichita City Council Member Bryan Frye (district 5,west and northwest Wichita).

    On June 22, 2019, $250 to Wichita City Council Member Jeff Blubaugh (district 4, south and southwest Wichita).

    Of note, all three are seeking reelection this year.

    There is nothing illegal regarding these campaign contributions based on Wichita and Kansas law. Some jurisdictions, however, have laws known as pay-to-play. These laws may prohibit political campaign contributions by those who seek government contracts, prohibit officeholders from voting on laws that will benefit their campaign donors, or the laws may impose special disclosure requirements.

    In general, these laws prohibit government officials from enriching their campaign contributors. That seems like a simple concept that makes sense.

    While there is no such law in Wichita, wouldn’t citizens appreciate officials acknowledging the campaign support they have received from people with business before the council?

    For more information on pay-to-play laws, see:

    Craig Holman, Ph.D., Public Citizen; and Kyung rok Wi, Democracy Law Project at Penn Law. Pay-to-Play Restrictions on Campaign Contributions from Government Contractors, 2016. Available at https://www.citizen.org/wp-content/uploads/pay-to-play_state_summary_report.pdf

    Weeks, Bob. Is graft a problem in Wichita? Includes excerpt from and link to History and Constitutionality of Pay-to-Play Campaign Finance Restrictions in America. Available at https://wichitaliberty.org/wichita-government/is-graft-a-problem-in-wichita/.

    Perkins Coie. Summary of State Pay-To-Play Regulations. Available at https://www.perkinscoie.com/images/content/2/1/v2/21769/wp-10-05-pay-to-play.pdf.

    —
    Notes

    1. City of Wichita City Council Agenda for October 8, 2019. Agenda Item No. V-1, Public Hearings Considering an Expansion of the Union Station Tax Increment Financing District and Considering a Development Agreement for the Union Station Project Area 3 Plan (District I) ↩
  • Contribute to a campaign, get (nearly) free rent

    Contribute to a campaign, get (nearly) free rent

    Citizens may not have noticed that a campaign contributor to Wichita Mayor Jeff Longwell received a large benefit from the city this week.

    This Tuesday the Wichita City Council voted to amend an existing lease. In a nutshell, the city council voted to lease to a tenant 8,600 square feet of retail space for $1.00 per year.

    Not $1.00 per square foot per year, but $1.00 per year for all 8,600 square feet. That’s for the first four years of the lease.

    Computed as rent per square foot, which is the common way to quote rent for commercial space, the rent is $0.00. Essentially free, that is.

    According to the lease, the rent will increase in future years, first to $1.16 per square foot, then to $2.33.

    The Block 1 garage on East William Street in 2014.
    The real estate is at 360 East William in downtown Wichita. It’s on the north side of William between Broadway and Topeka. This is the first floor of the Block 1 parking garage built as part of the Ambassador Hotel project.

    It’s been difficult to rent this space. According to John Philbrick, the city’s real estate administrator, half of the space has been leased to two tenants. One lease is at $4 per square foot; the other at $6. According to the Weigand Commercial Retail Forecast for 2019, for total retail space in the central business district, the quoted rent was $10.65 per square foot. Across the city, class A retail space rents for $19.81, from the same source.

    Who is the new tenant that will pay essentially no rent for four years, then steeply discounted rent thereafter? It is Douglas Market Development, LLC. Its manager is Sudha Tokala. According to its annual report, the only person who owns more than five percent of the company is her.

    Tokala is notable for her involvement in the redevelopment of the former state office building, the former Henry’s building (which is next to the 360 East William Street retail space), and other nearby buildings.

    These developments are receiving various forms of government subsidy, which might be justified for fostering economic growth in downtown.

    But free (nearly free) rent? Is that really necessary to promote development in downtown Wichita?

    Then, there’s this. On March 21 of this year, a company named Natman Real Estate International LLC contributed $500 to the campaign of Wichita Mayor Jeff Longwell. That’s the maximum amount allowed by law.

    According to the company’s annual report, the only person who owns more than five percent of the company is Sudha Tokala. That’s the same person who is receiving four years of (almost) free rent, courtesy of the City of Wichita, Jeff Longwell, Mayor.

    It’s good that buildings in downtown Wichita — or anywhere in Wichita, for that matter — are being put to productive use. We should be able to celebrate the initiative and accomplishments of entrepreneurs who do this.

    But when there is such a close linkage between a campaign contribution and the conveyance of a large economic benefit — well, reasonable people will wonder. At least, they should.

    Pay to play

    There is no law in Wichita or Kansas prohibiting what happened here. But wouldn’t you feel better if Mayor Longwell had abstained from voting on this matter? Or if he acknowledged that he received campaign contributions from someone who is asking for a favor from the city?

    Some jurisdictions have laws known as pay-to-play. These laws may prohibit political campaign contributions by those who seek government contracts, prohibit officeholders from voting on laws that will benefit their campaign donors, or the laws may impose special disclosure requirements.

    In general, these laws prohibit officials from enriching their campaign contributors.

    Kansas and Wichita have no such laws. In my experience, there are few elected officials in favor of a pay-to-play law.

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