Voice For Liberty

Tag: Wichita Downtown Development Corporation

  • Downtown Wichita planning events scheduled

    Last October the City of Wichita selected the Boston firm Goody Clancy to develop a plan for the revitalization of downtown Wichita. Now the draft master plan is ready, and will be presented to Wichitans on Monday June 14.

    The Wichita Downtown Development Corporation wrote in a message: “The Downtown Master Plan Team has been researching, analyzing the market, listening to the community and incorporating public feedback since November. Goody Clancy will present strategies for achieving the vision, identifying resources and the type of activity and development for Downtown Wichita. Following the presentation there will be a question and answer session with the planning team. People may RSVP for the meeting at info@downtownwichita.org or to (316) 264-6005.”

    The event will be on Monday, June 14, at the Scottish Rite Temple at 332 E. 1st Street (northwest corner First and Topeka). The event starts at 5:30 pm with a reception and light refreshments. The actual presentation is from 6:00 pm to 8:00 pm.

    The WDDC also announced three planning workshops to be held on Wednesday June 16. The schedule for these are

    8:00 am to 9:30 am: Enabling Downtown Development
    3:30 am to 5:00 pm: Creating Transportation Choices
    5:30 am to 7:00 pm: Creating Unique Places

    These events will be held in the Bank of America Theatre at 100 North Broadway, basement level.

    The WDDC says: “Following the public meetings on June 14th and 16th, the Downtown Wichita Development Corporation, Visioneering Wichita and the City of Wichita will make presentations to groups throughout the regional community for additional public input. The Downtown Master Plan Team will incorporate the feedback gathered at the June and July presentations. The final plan will be presented in September. To request a presentation, please contact Nancy Moore at 316-264-6005. ”

  • David Burk, Wichita developer, overreaches

    Today’s Wichita Eagle contains a story about a well-known Wichita real estate developer that, while shocking, shouldn’t really be all that unexpected.

    The opening sentence of the article (Developer won tax appeal on city site) tells us most of what we need to know: “Downtown Wichita’s leading developer, David Burk, represented himself as an agent of the city — without the city’s knowledge or consent — to cut his taxes on publicly owned property he leases in the Old Town Cinema Plaza, according to court records and the city attorney.”

    Some might say it’s not surprising that Burk represented himself in the way the Eagle article reports. When a person’s been on the receiving end of so much city hall largess, it’s an occupational hazard.

    And when you’ve been the beneficiary of so much Wichita taxpayer money, you might even begin to think that you shouldn’t have to pay so much tax anymore.

    At the state level, you might seek over a million dollars of taxpayer money to help you renovate an apartment building.

    Burk has certainly laid the groundwork, at least locally. A registered Republican voter, Burk regularly stocks the campaign coffers of Wichita city council members with contributions. These contributions — at least for city council candidates — are apparently made without regard to the political leanings of the candidates. How else can we explain recent contributions made to two city council members who are decidedly left of center: Lavonta Williams and Janet Miller? Burk and his wife made contributions to their campaigns in the maximum amount allowed by law.

    This is especially puzzling in light of Burk’s contributions to campaigns at the federal level. There, a search at the Federal Election Commission shows a single contribution of $250 to Todd Tiahrt in 2005.

    It’s quite incongruous that someone would contribute to Tiahrt, Williams, and Miller. Except Williams and Miller can — and have — cast votes that directly enrich Burk. Politicians at the federal level don’t have the same ability to do that as do Wichita city council members. Well, at least not considering Wichita city business.

    So which is it: is Burk a believer in Republican principles, a believer in good government, or someone who knows where his next taxpayer handout will come from?

    Burk’s enablers — these include Wichita’s lobbyist Dale Goter, Wichita Downtown Development Corporation president Jeff Fluhr and chairman Larry Weber, Wichita City Manager Robert Layton, Wichita economic development chief Allen Bell, and most importantly Wichita Mayor Carl Brewer and various city council members — now have to decide if they want to continue in their efforts to enrich Burk. Continuing to do so will harm their reputations. The elected officials, should they run for office again, will have to explain their actions to voters.

    At the state level, the bill that will enrich Burk will likely be voted on in the Kansas Senate this week. Then, similar action may take place in the Kansas House of Representatives. Let’s hope they read the Wichita Eagle in Topeka.

  • Kansas historic preservation building tax credits discussed

    Sometimes on blogs people don’t take the time to read comments left to posts. Sometimes those comments provide valuable discussion and illumination of public policy issues. So here I take a moment to elevate a few comments left to a recent blog post.

    On Wednesday afternoon, a reader — we’ll call him “Larry” — left this comment to my post Kansas historic preservation tax credits should be eliminated. In that post, I argue that tax credits for the preservation of historic buildings are economically the same as a direct payment by the state to the developer, and that this practice is bad public policy that should be ceased. Here’s what Larry wrote:

    Bob, I want to understand your point of view. I do not claim to be an expert in this area so these are observations / questions.

    1. Wasn’t Wichita High School owned by the WATC and therefore tax exempt?

    2. If a developer puts, say $6M into the building to get it open the property with 68 units renting for $1000 to $2000 a month then I would assume it would have a value that in turn would generate higher taxes than the building now pays, correct?

    3. As I understand the Historic Tax Credit the person that put up the $6M and now has to pay the new property tax can take a credit of about 25% of the eligible construction cost (not all of the construction cost is eligible) against the new taxes he/she would pay to the state, correct?

    So if I have this right a building that is paying no taxes to the state has $6M spent on it and now is paying taxes into the state coffer but will pay 25% less in taxes than it would have if the building were not historic. Do I have it right? If so where is the payment you allude to being made by the state to the developer? Also don’t forget that when renovating a historical building you can not renovate it using the most economical methods but have to keep it “historically” correct and that in itself is more expensive.

    Then the reader “Pat” wrote this comment:

    Larry, you are correct in that there is no money given to the developer by the state. No payments. Typically, the tax credits are used as barter for a developer to sell the credits at a significant discount on the open market to those that need are in need of a “credit”. On historic projects, the money raised by the sale of the tax credits has to be used on certain eligible costs. The building will not pay property taxes on a reduced valuation but will pay taxes on its fair market value.

    Wednesday evening I left this comment:

    For Larry’s points 1 and 2, I’ll take his word that these are correct. I don’t think I’ve ever made a claim to the contrary.

    For point 3, the issue of the historic preservation tax credits and property taxes are entirely separate matters. The savings of 25% of building costs arising from the historic preservation tax credit is a one-time event, while property taxes are an ongoing event year after year.

    The payment made by the state to the developer is the tax credit itself, which might take the form of a document from the state containing language like “This certificate may be sent to the state of Kansas instead of a check for $1,000,000 in payment of taxes.”

    As Pat correctly notes, the recipient of such a certificate might keep it and use it to pay all or part of their taxes, or might sell it to someone at any price they mutually agree on. This ability to sell the tax credit document has been cited by WDDC president Jeff Fluhr as important.

    So how is issuing a tax credit not the same as making a payment to the developer?

    (By the way, Pat, if I knew I was getting a tax credit, I would immediately adjust my periodic tax payments to the state. It’s not necessary to wait until annual tax time to benefit from the credit.)

    Furthermore, the fact that the tax credit may be used for only certain purposes is a total red herring. If I gave you $100 on the condition that you could spend it only on a Monday, would you deny that I had enriched you by $100? Or would you contend that I had enriched you by something less than $100? I would think that you would simply shift your spending around and benefit fully from the $100 that I gave you.

    Finally, the fact that historic renovation is expensive is just like having granite countertops. It’s a premium amenity that is freely chosen by those who value it, it benefits those who choose it, and should be fully paid for by them.

    Interesting? Or not?

  • Wichita downtown planners hosting events

    The Wichita Downtown Development Corporation is holding two events in February that should be of interest to those concerned about the future of downtown Wichita and the city and region as a whole.

    The first event is the WDDC annual lecture. This event will take place on Thursday February 25 at the Wichita Scottish Rite Temple, corner of First and Topeka Streets. This year’s guest lecturer is Mr. Jim Cloar, noted for his work in the cities of Tampa, Florida (sports arena development); Dallas, Texas (Arts District Development); and St. Louis Missouri (downtown residential and retail). The lecture will focus on how to take a master plan from the vision to implementation. Opening reception will start at 5:30 pm, lecture will follow at 6:30 pm. At the conclusion of the lecture there will be a question and answer session with Cloar and the Goody Clancy team. To RSVP, email info@downtownwichita.org or call 316.264.6005.

    The second event is the Wichita Downtown Master Plan Charrette, to be held on Saturday, February 27, from 9:00 am to 4:00 pm at the Wichita Art Museum. (A charrette is “an intense period of design activity.”) The Downtown Master Plan Charrette is the cornerstone event that will provide key visioning for the new downtown master plan. To RSVP, email info@downtownwichita.org or call 316.264.6005.

  • Kansas historic preservation tax credits should be eliminated

    It’s time to recognize historic buildings for what they are: a premium feature or amenity whose extra cost should be born solely by those who chose to own them or rent them.

    Supporters of historic buildings tell us that renovating them is more expensive than building new. Likewise, building a home with granite kitchen counter tops and marble floors in the bathrooms is more expensive than a plainer home. These premium features are chosen voluntarily by the homeowner, and it is right and just that they alone should pay for them.

    There’s no difference between these premium features and choosing to live in a historic building. Those who desire them choose them voluntarily, and should pay their full cost. Forcing everyone to subsidize this choice is wrong. It’s an example of a special interest gone wild.

    Supporters of historic building preservation subsidy tell us that these historic buildings define the character of a city. They have succumbed to the design fallacy, “the notion that architectural design is a major determinant in shaping human behavior.” It may be so for some people. Let each person decide for themselves, and then pay — or not pay — for its perceived benefit.

    It’s often true that historic preservation tax credits go to subsidize the choices of well-off people. For example, at a meeting of government officials with Wichita-area legislators in January, Wichita Downtown Development Corporation president Jeff Fluhr presented examples of several buildings in Wichita that have been rehabilitated, including the Wichita High Apartments, which he said will rent for $1,000 to $2,000. He mentioned condos in the Grant Telegraph building, which he said range in price from $300,000 to $950,000. Do the taxpayers of the state of Kansas need to subsidize people who can afford rents and prices like these?

    Wichita High ApartmentsWichita developer Dave Burk stood to pocket over $1 million in taxpayer money on this project.

    The use of tax credits, however, leads many to believe that what the state is doing is not a direct subsidy or payment. In order to clear things up, maybe we should require that the state write checks instead of issuing credits.

    Indeed, if the state issued checks to real estate developers, citizens would look at things differently. They’d wonder why they’re subsidizing the construction of apartments that rent for up to $2,000 monthly, or condos worth nearly a million dollars. They’d be angry. Using a semi-mysterious mechanism like tax credits shrouds the true economic transaction taking place.

    These expenditures of tax money — being issued as credits rather than appropriations — go through a different process than most expenditures of state money. Recently some have started to use the word “tax appropriations” to describe tax credits. These expenditures don’t go through the normal legislative process as do most appropriations.

    It’s time to recognize these historic preservation tax credits as payments to a special interest group. Unfortunately, as with most special interest groups, the group receiving the payment — tax credits in this case — has an extreme interest in the matter. They benefit greatly. But to the rest of the populace — well, does it really matter to them? John Stossel explains the problem like this:

    The Public Choice school of economics calls this the problem of concentrated benefits and dispersed costs. Individual members of relatively small interest groups stand to gain huge rewards when they lobby for government favors, but each taxpayer will pay only a tiny portion of the cost of any particular program, making opposition pointless.

    That’s the situation we face with the historic preservation tax credits. A few real estate developers will enrich themselves at state expense. Well-to-do renters and condo buyers will get a better deal. To everyone else, it’s just another way that government nickels and dimes us to death.

    It should be noted that one of the most vocal proponents of the tax credits is Christy Davis, a historical preservation consultant who operates a company that assists property owners and governments in obtaining funding for historic preservation projects. She’s the very definition of a special interest group.

  • Goody Clancy market findings presented to Wichita audience

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

  • Wichita makes case for tax credits

    At yesterday’s meeting of the South-central Kansas legislative delegation with government officials, the City of Wichita spent most of its time presenting the case that cuts made to a program of tax credits for historic buildings should be restored.

    Initially Mayor Carl Brewer asked legislators for continued funding for the affordable airfares effort, for the National Institute for Aviation Research, and the aquifer recharge project.

    But the primary focus of the city’s requests became clear when Jeff Fluhr of the Wichita Downtown Development Corporation introduced Christy Davis, a historical preservation consultant who operates a company that assists property owners and governments in obtaining funding for historic preservation projects.

    She said that there is public policy in Kansas that supports historic preservation, and that the tax credit program has been a great success. In particular, she said the tax credits leverage the financing necessary for historic preservation projects.

    She said that every dollar in tax credits supports an additional three dollars of private investments. Rehabilitation of existing structures is 50 percent more labor intensive than new construction, so more jobs are created. Since 2002, $66.4 million in Kansas tax credits have been issued, and Davis said this has leveraged over $260 million in private investment, also creating jobs and income.

    Returning to the podium, Fluhr said that tax credit program needs to be predictable, so that the private sector knows they can depend on it. Also the transferability of the credits is important, so that developers can sell them to raise capital.

    Fluhr presented examples of several buildings in Wichita that have been rehabilitated, including the Wichita High Apartments, which he said will rent for $1,000 to $2,000. He mentioned condos in the Grant Telegraph building, which he said range in price from $300,000 to $950,000. Davis presented examples of rehabbed buildings whose property owners said the projects would not have been possible without the tax credits.

    In 2009, the legislature placed a cap or lid on the amount of tax credits. Davis said that it was intended to be a 10 percent cut, but it turned out to be a 70 percent cut.

    Both Fluhr and Davis presented the case of the Broadview Hotel in downtown Wichita. That project, already receiving various forms of subsidy from the City of Wichita, requires historic tax credits for its financial viability, according to the developers and the city. (Uncertainty over Broadview’s future doesn’t bother Wichita)

    Analysis

    The city’s quest for more tax credits is likely to face a rough road in the statehouse.

    Spending advocates, especially schools, want the legislature to close tax exemptions. Generally, these are sales tax exemptions, so that organizations such as the Girl Scouts (expect them to make several field trips to the statehouse soon) don’t have to pay sales tax.

    Kansas Secretary of Revenue Joan Wagnon says that repealing these sales tax breaks could generate $200 million per year in revenue. She also wants a three-year moratorium on new tax breaks.

    These sales tax exemptions are “passive” from the standpoint of the legislature, in that the legislature created them, and then people have to initiate economic activity in order to benefit. The only involvement of the state in the transaction is that it doesn’t collect tax that it would have. For believers in limited government, that’s good.

    But tax credits are active. When an applicant qualifies, the state, in essence, pays money to the applicant. While some may disagree that tax credits are in fact a payment by the state, Fluhr mentioned the transferability of the tax credits and the ability to sell them as important to developers. Recently some have started to use the word “tax appropriations” to describe tax credits. These expenditures don’t go through the normal legislative process that most appropriation do.

    Indeed, if the state issued checks to real estate developers, citizens would look at things differently. They’d wonder why they’re subsidizing the construction of apartments that rent for up to $2,000 monthly, or condos worth nearly a million dollars. These aren’t low-income housing tax credits, after all.

    By characterizing subsidies to developers as tax credits, it seems much less benign, although the economic effect is the same.

    For believers in the collective wisdom of free people trading voluntarily in markets — instead of government intervention — making grants to favored developments through tax credits is one of the most harmful things that government can do. In the case of historic building credits, it represents the desires of a relatively small band of enthusiasts. As John W. Sommer wrote in The Cato Journal:

    With few exceptions, historic or landmark preservation illustrates the powerful force of cultural elites who impose their tastes on the landscape at the expense of the general public. City after city has been confronted by small groups of architectural aesthetes who are as highly organized as they are both righteous and wealthy. In city after city these groups have succeeded in stalling, or permanently freezing, the pace of physical and functional change. In the name of “heritage” or “culture” or “a livable city,” and invariably “in the public interest,” preservationists seek to legislate “charm” for others.

    We’d be better off with requiring that preservationists rely on the market for the financing and success of their projects.

  • Wichita Convention and Visitors Bureau should follow Kansas Open Records Act

    Remarks to be delivered to the December 1, 2009 meeting of the Wichita City Council.

    Mr. Mayor, members of the council,

    I’m recommending that the city not renew its contract with the Go Wichita Convention and Visitors Bureau until that organization decides to follow the Kansas Open Records Act.

    Recently I made a request under the provisions of the records act for records from the Bureau. This request was denied. The Bureau didn’t deny my request because of the nature of the records I asked for. Instead, the Bureau’s Chairman, Devin Hansen, has an understanding, he wrote, that the Bureau is not subject to the open records law.

    Here’s why the Convention and Visitors Bureau is a public agency subject to the Open Records Act. KSA 45-217 (f)(1) states: “‘Public agency’ means the state or any political or taxing subdivision of the state or any office, officer, agency or instrumentality thereof, or any other entity receiving or expending and supported in whole or in part by the public funds appropriated by the state or by public funds of any political or taxing subdivision of the state.”

    The Kansas Attorney General’s office offers additional guidance: “A public agency is the state or any political or taxing subdivision, or any office, officer, or agency thereof, or any other entity, receiving or expending and supported in whole or part by public funds. It is some office or agency that is connected with state or local government.”

    Let’s ask a few questions:

    Is the Convention and Visitors Bureau supported in whole or in part by tax funds? According to its 2008 annual report, 89% of its revenues came from the transient guest tax. We must answer “yes” to this question.

    Is the Convention and Visitors Bureau an office or agency connected with state or local government? Absolutely, in terms of both funding and function.

    There’s no rational or reasonable basis for the Bureau’s assertion that it is not a public agency subject to the Kansas Open Records Act.

    There are two other quasi-governmental organizations similarly situated, the Wichita Downtown Development Corporation and the Greater Wichita Economic Development Coalition. These two organizations have also refused to comply with the Kansas Open Records Act for the same reason as the Convention and Visitors Bureau. The WDDC, in particular, is relying on what I believe to be an incorrect interpretation of the law by city legal staff.

    Mr. Mayor and council members, look at the plain language of the Kansas Open Records Act, as I’ve explained. Look at the intent of the Kansas Legislature as embodied in the statute: “It is declared to be the public policy of the state that public records shall be open for inspection by any person unless otherwise provided by this act, and this act shall be liberally construed and applied to promote such policy.”

    The policy of the state is that records should be open. Governmental bodies shouldn’t be looking for reasons to avoid complying with the law, as has the City of Wichita and these three quasi-governmental organizations. Especially when the reasons the city legal staff has used are wrong, both in terms of the letter of the law and its intent.

    As a condition of renewing the city’s contract with the Convention and Visitors Bureau, I ask that this council instruct the Bureau to follow the Kansas Open Records Act.

  • Jeff Fluhr updates status of downtown Wichita

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

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

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

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

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

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

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

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

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

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

    Analysis

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

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

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

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

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

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

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

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

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

    Later O’Toole writes:

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

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

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

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