Voice For Liberty

Tag: Wichita Downtown Development Corporation

  • Downtown Wichita proposals not available to citizens

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

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

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

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

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

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

  • Wichita Eagle editorial page calls for more government at all levels

    Today’s Wichita Eagle editorial and opinion page is chock full of plans for more government programs, regulations, taxes, and intervention.

    Rhonda Holman’s editorial calls for more government involvement in setting energy policy so that Kansas can share in the “green-energy boom.” Readers of this blog know that government involvement in energy policy will only lead to disaster. It will lead to more taxes and more government programs, so maybe that’s why Holman is in favor of programs like this.

    Jeff Fluhr of the Wichita Downtown Development Corporation — itself a taxpayer-funded organization — calls for planning to ensure the success of downtown Wichita. How are these plans to be developed and enforced? Through government, of course. Then, he tries to avoid the “T-word” by using euphemisms like “strategic public investment.” But how does the public “invest” in something except through taxation?

    A featured letter calls for the city to build more swimming pools.

    In the regular letter section, one writer calls for national health care, just like we have national defense.

    Another uses the way that injured birds are cared for by the Kansas Raptor Center to advocate that the government care for young and injured people the same way.

    A former state representative makes the case for more government regulation of political speech.

    Then, to make sure the point is made as clear as possible, a writer who lived through the Great Depression praises Franklin D. Roosevelt and his policies.

    Maybe this big-government stance of the Wichita Eagle editorial page is one of the reasons fewer people are reading it.

  • Wichita’s naysayers shortchanged again

    At the December 2, 2008 meeting of the Wichita city council, three citizens spoke to the council on the same issue. The treatment these people received in the official minutes of the proceedings varied quite a bit.

    At the meeting, Jeff Fluhr of the Wichita Downtown Development Corporation spoke in favor of action the city was contemplating. John Todd and I spoke against the action. The difference in the treatment given to each party in the minutes of the meeting is evidence of bias in the city’s attitude towards its citizens. Yes, the mayor and others thank us for our participation. But I don’t know if they really mean it.

    I measured the length of each citizen’s talk, and counted the number of words of coverage received in the minutes. Here’s the results:

    Jeff Fluhr: 1:08 minutes, 95 words.
    John Todd: 4:04 minutes, 72 words.
    Bob Weeks (me): 3:49 minutes, 13 words. About half of those words were my name and address.

    What is the reason for this discrepancy? Does the position taken by each speaker have any effect? It seems so, as a similar situation took place in August, described in Wichita’s Naysayers Shortchanged in Council’s Record.

    Perhaps the City of Wichita needs to do what the Board of Sedgwick County Commissioners does, which is to provide a verbatim transcript of each word spoken by everyone at the meeting. But that seems to generate its own problems and delays. As of today, minutes are available for meetings through November 12. For meetings after that date, minutes are not ready, at least on the county’s website. (The county prepares a short review of each meeting, and these are ready perhaps a week or so after each meeting.)

    The minutes of this meeting are available here. Video of each citizen’s talk is available on YouTube: Jeff Fluhr, John Todd, and Bob Weeks.

  • Jeff Fluhr decided

    A few weeks ago in the post Jeff Fluhr’s Decision I wrote that the the new president of the Wichita Downtown Development Corporation had a choice to make: “Mr. Fluhr needs to decide if he’s on the side of open and transparent government, or whether he’s in favor of crony capitalism and the good ol’ boy network.”

    When Mr. Fluhr testified at yesterday’s Sedgwick County Commission meeting, I learned the answer. It’s crony capitalism, all the way.

    Background: As defined by Wikipedia, “Crony capitalism is a pejorative term describing an allegedly capitalist economy in which success in business depends on close relationships between businessmen and government officials. It may be exhibited by favoritism in the distribution of legal permits, government grants, special tax breaks, and so forth.”

  • Jeff Fluhr’s Decision

    At the December 2, 2008 meeting of the Wichita City Council, Jeff Fluhr, the new president of the Wichita Downtown Development Corporation, spoke on behalf of the expansion of the Center City South Redevelopment District, commonly known as the downtown Wichita arena TIF district.

    Attending the meeting with him were several members of that organization’s board of directors, headed by Joe Johnson of Schaefer Johnson Cox Frey Architecture. This board, emblematic of the “good ol’ boy” network, is stocked with those who seek to profit in the halls of government power rather than in the marketplace where consumers rule. It’s easier that way — no pesky consumers with their varied wants and desires.

    The problem Mr. Fluhr faces is that in order to lure developers to downtown Wichita, incentives must be offered. Now some on the Wichita city council act as though incentives come at no cost. The proceeds from TIF financing, they say, are used only for infrastructure, as though this is something the city is obliged to provide. But as I show in my post Many Wichita Developers Pay for Infrastructure, market-based developers pay for their infrastructure. The city doesn’t give away much to them.

    The TIF developers, they being the political entrepreneurs, are privileged to use their own property taxes to pay for their infrastructure, and for other things, too. This sets up a situation where the city, through its attempts at centralized planning, thwarts the will of the people by forcing Wichitans to subsidize developers who are lured — “incentivized,” as one city council member put it — to develop where politicians want them to.

    This sets up a tension. Citizens are starting to realize the reality of the transfer of wealth from taxpayers to the political entrepreneurs, and they don’t like it. They’re starting to realize that public/private partnerships mean the public takes the risk, and the “privates” earn the profits. This is far removed from capitalism, which is what we need to build the wealth of our city. “Crony capitalism” is a better term for the relationship between the TIF district developers and local government officials.

    Then there’s the defect in the process surrounding the public hearing before the Wichita city council. As Randy Brown wrote about this meeting: “Among other transgressions, we had a mockery of the public hearing process rather than an open and transparent discussion of a contentious public issue.” Mr. Fluhr needs to decide if he’s on the side of open and transparent government, or whether he’s in favor of crony capitalism and the good ol’ boy network. If he would request that the City of Wichita withdraw this TIF district until a proper public hearing is held, we’d get a good indication of his thinking. Of course, if he doesn’t make such a request, we’ll know just as well.

    Finally, Mr. Fluhr stated in his presentation to the Wichita city council: “[The TIF district] will greatly contribute to Wichita’s development as a destination river city, which will in turn enhance the economic vitality of downtown and the community at large.” (emphasis added)

    I would ask that Mr. Fluhr and the citizens of Wichita familiarize themselves with the research to the contrary. A number of studies tell us that TIF districts, while good for the subsidized developers, are not a good deal for the city as a whole. As economists Dye and Merriman (see below) found out: “We find evidence that the non-TIF areas of municipalities that use TIF grow no more rapidly, and perhaps more slowly, than similar municipalities that do not use TIF.”

    Kenneth A. Kriz: Tax Increment Financing: Its Effect on Local Government Finances
    Dye, Richard and David Merriman: Tax Increment Financing: A Tool for Local Economic Development
    Dye, Richard and David Merriman: The Effects of Tax Increment Financing on Economic Development
    Danny Santivasci: Tax Increment Financing: Private Investment at the Expense of Local Community

  • Wichita TIF District Reveals Lack of Confidence

    Yesterday, the Wichita Eagle’s Bill Wilson misses the point in his reporting and blogging on business issues.

    In his blog post Seed money for downtown’s future, he wrote this: “The Wichita City Council’s decision to approve tax increment financing for the arena neighborhood’s redevelopment was a welcome vote of confidence in the neighborhood’s future.”

    In his news story Arena TIF seen as ‘a vote of confidence’, we read the remarks of Jeff Fluhr, the new president of the Wichita Downtown Development Corporation: “It’s most definitely a vote of confidence in the future of the neighborhood.”

    Tell me, if real estate developers require an incentive to do something, what does that tell us about their level of confidence?

    It tells me that they have no confidence. They’d rather invest their capital elsewhere, and they’re doing that. It’s only when the city votes to give them money — and that’s what TIF districts do, contrary to Mr. Wilson’s misinformation — can they be “incentivized” to do what they won’t do with their own money.

  • Gambling study flawed. Ask casino workers.

    Did you know that a study used to promote the economic development benefits of gambling in Wichita has casino workers paying for a large part of the social costs of gambling?

    There is a document titled “Economic & Social Impact Anlaysis [sic] For A Proposed Casino & Hotel” created by GVA Marquette Advisors for the Wichita Downtown Development Corporation and the Greater Wichita Convention and Visitors Bureau, dated April 2004. One presentation concludes that the average cost per pathological gambler is $13,586 per year. Quoting from the study in the section titled Social Impact VII-9:

    Most studies conclude that nationally between 1.0 and 1.5 percent of adults are susceptible to becoming a pathological gambler. Applying this statistic to the 521,000 adults projected to live within 50 miles of Wichita in 2008, the community could eventually have between 5,200 and 7,800 pathological gamblers. At a cost of $13,586 in social costs for each, the annual burden on the community could range between $71 and $106 million.

    If all we had to do was to pay that amount each year in money that would be one thing. But the components of the cost of pathological gamblers include, according to the same study, increased crime and family costs. That is, people are hurt, physically and emotionally, by pathological gamblers. Often the people harmed are those such as children who have no option to leave the gambler.

    But this study makes the argument that the economic benefits of gambling will more than pay for this social misery: “While this community social burden could be significant, its quantified estimate is still surpassed by the positive economic impacts measured in this study.”

    How does the report make this conclusion? The largest components of the positive economic impacts are employee wages ($37 million), additional earnings in the county, and state casino revenue share, along with some minor elements. Together these total $142 million, which is, as the authors point out, larger than the projected costs shown above.

    But this analysis is flawed. Casino employee wages can’t be used to offset the social costs of pathological gamblers, as these employees probably want to spend their wages on other things!

    Economic impact studies like this often assume that any economic activity the proposed development might create is due solely to its existence, and that these monies can be used to pay for whatever problems or costs the development causes.

    Just ask the prospective casino employees where they want their wages to go: into their own pockets, or be used, as this study uses them, to pay for the social costs of gambling.

  • Government funds promoting downtown Wichita arena

    … it is our opinion that public funds may not be used to promote or advocate the position of a governing body on a matter which is before the electorate. However, this does not mean that public funds may not be expended to educate and inform the electorate.

    That’s the opinion of the Kansas Attorney General Robert Stephan from 1993. In this opinion, the Attorney General cited this court opinion:

    It would be establishing a dangerous and untenable precedent to permit the government or any agency thereof, to use public funds to disseminate propaganda in favor of or against any issue or candidate. This may be done by totalitarian, dictatorial, or autocratic governments but it cannot be tolerated, directly or indirectly, in these democratic United States of America. This is true even if the position advocated is believed to be in the best interest of our country. To educate, inform, to advocate or promote voting on any issue may be undertaken, provided it is not to persuade nor to convey favoritism, partisanship, partiality, approval or disapproval . . . of any issue, worthy as it may be.

    Now, look back at the actions of our elected government leaders in the months leading up to the November 2004 election.

    Were they presenting educational material about the benefits of a new arena? Were they promoting an open and honest debate of a new arena’s merits?

    Or were they cheerleading and advocating for the arena, using their offices and government resources?

    I submit that our local governments, our elected officials, and their quasi-governmental surrogates were working in full force for the passage of the arena and its tax.

    That’s not just my opinion. Others noticed it too.

    An editorial by Phillip Brownlee, published in the Wichita Eagle on September 5, 2004, read in part: “If the plan is to pass, city and county elected officials — supported by business leaders — must continue their strong leadership and high-profile support for the arena.”

    After the election, another Wichita Eagle editorial by Rhonda Holman published on November 4, 2004 stated in part: “What made the difference this time, in addition to the effective marketing campaign and all those pennant yard signs, was the unified show of political will on the part of Wichita and Sedgwick County officials. Their willingness to declare the need for such a facility, then argue for raising taxes to meet that need, helped attract necessary support from the businesses that backed the campaign, and finally from voters asked to pay for the arena with a 30-month, 1-percent sales-tax increase.”

    The Wichita Downtown Development Corporation, led by its president Ed Wolverton, was a prominent booster for the arena. Do you know where this organization receives its funds? It is funded through property taxes and its contract with the City of Wichita. Other taxpayer funded institutions, such as the Greater Wichita Convention & Visitors Bureau, the Greater Wichita Area Sports Commission, the Hyatt Regency Wichita, and even the Kansas Turnpike Authority contributed money or in-kind resources to the pro-arena Vote Yea campaign, and most of these institutions campaigned for the arena, too.

    In a television story about Wichita city manager George Kolb, the reporter said: “Some things Kolb says he filled the council in on were … helping get the downtown arena passed.” The clear meaning of this is that city manager Kolb was proud of how he and the Wichita city council worked to help pass the downtown arena tax. Now if Mr. Kolb had talked about how he helped educate the electorate on the issues surrounding the arena tax ballot measure, that would be acceptable. Instead, he and other government leaders are proud of how they worked to ensure passage of the arena tax. That behavior is contrary to how the Kansas Attorney General said they should act.

    I asked our District Attorney to look into this issue of government advocacy for the arena. That office decided, even in light of all this and more evidence, that there was no wrongdoing by our leaders.

    Does this seem a correct conclusion by the district attorney, in light of these facts about the behavior of our local government officials?

    Were local government officials, especially the Sedgwick County Commission, presenting educational material, or were they campaigning for the arena?

    I believe the only conclusion we can make is that they were all campaigning — and campaigning vigorously — for the arena, in spite of what Kansas Attorney General Opinion 93-125 says is acceptable behavior for government officials and the expenditure of public funds.

  • Consider carefully all costs of gambling in Wichita

    Writing from Miami, Florida

    In a free society dedicated to personal liberty, people should be able to gamble. But that’s not what we have, as in a free society dedicated to personal liberty, people wouldn’t be taxed to pay for the problems that others cause in the pursuit of their happiness.

    How does this relate to the issue of casino gambling in Wichita and Kansas?

    There is a document titled “Economic & Social Impact Anlaysis [sic] For A Proposed Casino & Hotel” created by GVA Marquette Advisors for the Wichita Downtown Development Corporation and the Greater Wichita Convention and Visitors Bureau, dated April 2004. This document presents a lot of information about the benefits and the costs of gambling in the Wichita area. One of their presentations of data concludes that the average cost per pathological gambler is $13,586 per year. Quoting from the study in the section titled Social Impact VII-9:

    Most studies conclude that nationally between 1.0 and 1.5 percent of adults are susceptible to becoming a pathological gambler. Applying this statistic to the 521,000 adults projected to live within 50 miles of Wichita in 2008, the community could eventually have between 5,200 and 7,800 pathological gamblers. At a cost of $13,586 in social costs for each, the annual burden on the community could range between $71 and $106 million.

    If all we had to do was to pay that amount each year in money that would be bad enough. But the components of the cost of pathological gamblers include, according to the same study, increased crime and family costs. In other words, people are hurt, physically and emotionally, by pathological gamblers. Often the people who are harmed are those who have no option to leave the gambler, such as children.

    Quoting again from the study: “While this community social burden could be significant, its quantified estimate is still surpassed by the positive economic impacts measured in this study.” The authors are saying that the amount of money the casino generates will more than pay for the increased social costs. While it is likely true that the amount of money the casino generates is greater than the increased social costs, whether this analysis makes sense depends on what you mean by “generate.”

    The largest components of the positive economic impacts are employee wages, additional earnings in the county, and state casino revenue share, along with some minor elements. Together these total $142 million, which is, as the authors point out, larger than the projected costs shown above. But this analysis is flawed. It assumes that salaries paid to employees somehow compensate for increased social costs. Employee wages don’t go towards paying the costs of treating pathological gamblers, as employees probably want to spend their wages on other things. Furthermore, the state casino revenue share is supposed to go towards schools. It is a huge mistake to treat employee wages as compensating for increased social costs.

    The absurdity mounts as we realize that gambling is promoted by none other than Governor Kathleen Sebelius (and many others) as a way to raise money for schools. Often the figure quoted for the amount of money gambling would generate for the state is $150 million per year. But here is a study concluding that the monetary costs to the Wichita area alone would be a large fraction of that, and when you add the human misery, it just doesn’t make sense to fund schools with revenue from gambling.