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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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