Slow down on Wichita ballpark land deal

A surprise deal that has been withheld from citizens will be considered by the Wichita City Council this week.

Wichitans were probably surprised to learn Sunday that the city plans to sell land near the new baseball stadium to the owners of the new baseball Wichita team.

Surprised for several reasons: First, while the city completed an agreement with the new team last year, the land sale was not disclosed to the public. There appears to be no prior public mention of this.

Second, the city plans to sell land for $1 per acre.

Third: While the Wichita Eagle reported this story Sunday 1 We might have known as early as Friday, except that city council agendas were not available due to a website problem. The website was fixed Monday afternoon.

Here’s what the agenda packet holds for item V-3, titled “Private Development Agreement with Wichita Riverfront LP (District IV).”

“As part of the City’s effort to attract affiliated baseball to Wichita and secure development activity to help pay for the stadium STAR and TIF bonds, the City extended the invitation for interested team ownerships to have development opportunities surrounding the stadium. The New Orleans’s team ownership did express that as a requirement for their interest in Wichita they required development rights around the stadium.”

This is the first time the city has revealed that development opportunities surrounding the stadium were a requirement of the baseball team deal.

From the agenda: “City grants the Developer exclusive right to purchase the Private Development Site for the development of the hospitality, commercial, retail, office and residential uses, as contemplated herein, for $1.00 an acre.”

How much land at one dollar per acre? Earlier, the agenda holds this: “The City owns approximately 24 acres at the former Lawrence Dumont Stadium site. After securing the final footprint of the stadium site, adjacent streets, infrastructure and riverfront enhancements, it is estimated that the remaining property available for private development will be 4.25 acres.” (The Eagle article reported the sale would be 24 acres, but the agenda contradicts that.)

It is troubling that the city has not been forthright in sharing this with us before now. Besides the agenda, the Eagle reported this:

“It goes back to the partnership that we have worked out with the team,” said Scot Rigby, assistant city manager and director of development services, whose department came up with the agreement.

“That’s where we struck that agreement on the value of the ground. For the city, we’ve already owned that property,” he said. “If we didn’t do anything with it, it would be undeveloped property. So the value for us is to get it in development as quickly as possible.”

Also, from the Eagle:

Having the baseball team expand its operations from baseball to real estate along the river has been part of the plan since talks started between the team owners and city officials about three years ago, and it played a major role in attracting the team to Wichita, officials with the city and the team said.

“We needed a team that played the level of baseball that was attractive for the community and important in terms of affiliated baseball at the Triple-A level. But we also wanted a team that could deliver on the development,” Layton said.

Why didn’t the city feel it could share that with us at the time the deal was struck for the team to move to Wichita?

There’s also this. We don’t know much about the ownership team, led by Schwechheimer. At least some in New Orleans weren’t happy with his plans to move the team from there to Wichita: “Relocating the Baby Cakes to Wichita, a city with one-third the market of New Orleans would be in many ways the final act of betrayal by owner Lou Schwechheimer. First, Schwechheirmer changed the team name from the Zephyrs, which New Orleans embraced, to the Baby Cakes. The name is loathed by most in the New Orleans area.” 2

More troubling is this: Schwechheimer bought the New Orleans team in 2016. At the time, local media reported this: “Schwechheimer, announced Monday as manager and controller of a company that has bought 50 percent of the New Orleans Zephyrs, said that type of diligence, dedication and now experience will be used to turn around this city’s Triple-A team.” 3

The Eagle reports this: “Having the baseball team expand its operations from baseball to real estate along the river has been part of the plan since talks started between the team owners and city officials about three years ago, and it played a major role in attracting the team to Wichita, officials with the city and the team said.”

If all this reporting is true, talks about moving the team from New Orleans started in 2016, the same year Schwechheimer purchased the team and said he would use “diligence” and “dedication” to turn around the New Orleans team.

That’s something to think about. Is this a reliable person?

Also: The $1 per acre reminds us of other $1 dollar deals the city has crafted. In 2012, the city leased land it owned in Waterwalk for $1 per year for 93 years. There were apartments built, but the city did not follow through on an important part of the deal. 4 Other developments in Waterwalk were leased for $1 per year. 5

In these instances, apartments and a hotel were built. But in general, Waterwalk has been a dismal failure, and in recent years its fortunes have declined farther.

In 2011 the city decided to build a parking garage downtown with retail space. It leased 8,500 square feet of that space to Dave Burk for $1 per year. Much of that space has remained vacant since it was built.

Can’t we see some progress on these projects before the city does it again?

Then, these developers are from out-of-town, like — dare I say — the Minnesota Guys. At one time the toast of the town, their multi-count criminal indictment for securities fraud is on appeal to the Kansas Supreme Court on a jurisdictional matter. Other than that, they left a trail of broken promises and bad debts in downtown Wichita.

For these reasons — a surprise announcement that has been withheld from citizens, a broken website, repeating a pattern that hasn’t been successful — we need to take at least a few weeks to mull over this deal.

Then, there’s this: In the agenda packet, section 6.03 of the development agreement holds this surprise: “The 1% City sales tax has been approved at an election, and the City agrees that the City sales tax revenues generated within the STAR Bond District will be committed to pay the principal and interest of the STAR Bonds.”

I have no idea what this means. But how did this appear in an official city document and an agreement with a developer?


Notes

  1. Swaim, Chance. Wichita plans to sell riverfront property near new ball park for $1 an acre. Wichita Eagle, March 3, 2019. Available at https://www.kansas.com/news/politics-government/article226994834.html.
  2. Boyd, Kevin. BREAKING: New Orleans Baby Cakes Are Heading To Wichita After 2019. Available at https://thehayride.com/2018/09/breaking-new-orleans-baby-cakes-are-heading-to-wichita-after-2019/.
  3. Williams, Darrell. New owner Lou Schwechheimer tasked with turning New Orleans Zephyrs around. The New Orleans Advocate, April 22, 2016. Available at https://www.theadvocate.com/new_orleans/sports/zephyrs/article_0119ed0a-4d00-5a7e-be97-00d430c0f819.html.
  4. Weeks, Bob. Wichita WaterWalk apartment deal not good for citizens. Available at https://wichitaliberty.org/wichita-government/wichita-waterwalk-apartment-deal-not-good-for-citizens/.
  5. Weeks, Bob. Waterwalk hotel deal breaks new ground for Wichita subsidies. Available at https://wichitaliberty.org/wichita-government/waterwalk-hotel-deal-breaks-new-ground-for-wichita-subsidies/.
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