Category Archives: Development

A good first step

If there’s been a constant in the three-plus years I’ve covered real estate for the Eagle, it’s been WaterWalk and the steady drumbeat of citizen criticism of a largely inactive project.

Those critics, who largely are justified because as taxpayers they’re equity partners, have reason to be heartened by the aggressive first steps announced by the new man in charge on the east bank, veteran Wichita entrepreneur Jack DeBoer.

A very sage developer told me years ago that there are two kinds of Wichitans: The people unafraid to act, and the people paralyzed by fear, more intent on pointing fingers.

Make no mistake about it: DeBoer falls into the first category, and his decision to pursue commercial traffic at WaterWalk is a decision playing very well, even with some of the project’s harshest critics in the local development industry.

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A call to action

Interestingly, a little more than a half-hour of this morning’s brainstorming in Chattanooga was devoted to the “vocal minority,” a group of Wichitans who oppose public-private partnerships to redevelop downtown.

There were several calls to action, including one from Mayor Carl Brewer, who said, “We cannot be intimidated.” Others called out Wichita blogger Bob Weeks and one near the front of the room, away from me, said bluntly, “We have to watch who we elect.”

Quite clearly, the information battle on downtown redevelopment has been joined. I’ll have more on the brainstorming sessions, including the focus on the anti-tax crowd, in Saturday’s Eagle.

Preparing for development

Here’s one statistic that struck me this week in Chattanooga:

Staff at the RiverCity Company, which oversees the local revitalization effort: 12.

Staff at the Wichita Downtown Development Corp., the point organization for Wichita’s growth plan: 3, and sometimes 4.

One of the thoughts percolating through the Visioneering Wichita delegation Thursday was WDDC staffing. President Jeff Fluhr will need more bodies as the effort ramps up.

Philanthropy is going to be essential to get Wichita’s downtown program going. Chattanoogans talk a lot about “motivated local money.”

And one good starting point for a Wichitan who’d like to buy into downtown’s future would be to fund an increase in the WDDC staff.

The return of due diligence

I’m certainly no entrepreneur. No financial magician, either.

But I’m the kind of anal-retentive guy who will spend a year voraciously reading automotive reviews before I even think about approaching a dealer to trade cars. That’s no excuse for buying a Chevrolet Blazer, but I never said I was perfect.

So maybe that’s why I’ve struggled to get this term out of my head this week: Due diligence.

It cropped up twice this week, early as I sat in court listening to the mind-boggling tales of investor after investor who happily plowed thousands into Thomas Etheredge’s Wild West World, largely without so much as a Google of “Thomas Etheredge,” let alone any sticky details like a proforma or a business plan.

I’ve certainly underestimated the spell of a jailhouse conversion, let alone three of them.

And that says nothing of the bankers who handed over bags of money to him, apparently with little more than a hearty “Look me in the eye and hear me well.”

And then due diligence cropped up again as I researched a story on the relative lack of development around Intrust Bank Arena. It seems that business developers have this crazy notion that they’d like to gauge the demographic and traffic around the arena before they buy in and start building restaurants, entertainment venues and shops. It happens that way all across this great country of ours. Go figure.

So if there’s a moral to my week, it’s a growing appreciation of the folks who will follow the arena downtown to do business.

After they do their homework.

Commercial real estate is a time bomb

Several weeks ago, a group of local commercial developers and lenders sounded a warning about the future of the commercial real estate market, in Wichita and nationwide.

Now comes a Bloomberg piece from Washington, D.C. sounding the same warnings – a cutback in commercial securities, rising default rates, refinancing problems.

Interestingly, the locals said that the problems are manifesting themselves in the Wichita multi-family market, with record numbers of apartment complexes up for sale.

Today, there are 36 multi-family complexes – from duplexes to multi-unit apartment complexes – for sale in Wichita, according to Loopnet. The reason? Many owners bought with conduit loans three to five years ago that are coming due, and will be difficult if not impossible to refinance.

There could be some real bargains soon for cash buyers in the Wichita multi-family market.

WaterWalk consultant, city of Memphis in legal battle

Remember John Elkington, the Beale Street developer in Memphis who helped WaterWalk officials land a handful of commercial leases for the development early last year – leases that haven’t broken any ground?

It appears that Elkington’s signature project, Beale Street, has become a legal hot potato in Memphis, with the city suing Elkington’s Perfoma group and Elkington replying in kind.

Meanwhile, WaterWalk remains a stretch of barren ground, surrounding the lofts and office project, the Wichita Area Association of Realtors and Gander Mountain.

It’ll be interesting to see what direction new Wichita City Manager Bob Layton can help provide.

Jon Stewart on CNBC’s financial advice

Times are tough these days, which I think we all know. Thank goodness I have “The Daily Show with Jon Stewart” to end the day four nights a week.

Stewart is one of the funniest — and smartest — men alive, in my opinion. Last night he took on CNBC. If you didn’t see it, watch this. I promise you too will find it amusing.

How to get free publicity

Ever want free publicity, but didn’t know how? This came out of the blue from some PR firm and it made so much sense that we were all stunned.

This is how to get free publicity. Read More »

More on the Y at First and Waco

Allen Bell, the city of Wichita’s economic development director, volunteered some information during Tuesday’s council meeting that really didn’t register at first.

Bell said that the city, in sending out fliers to sell 2.3 acres at First and Waco – no RFP, just fliers – asked interested parties to offer up their last, best offer for the land.

But a closer look at the offers submitted by the Greater Wichita YMCA and InSite Real Estate Group raises a question: How do you define the best offer?

The InSite offer was for $700,000 for the land, on which 60,000 feet of office space would be built within the next five years.

The Y package provided by city officials didn’t include a cash price, but included a laundry list of programs similar to what the Y offers at its other Wichita locations. It’s an impressive collection of community programming, to be sure. But there’s no offer of money.

So how did city staff arrive at the Y offer as the best?

Amusement parks: A bad idea?

I’m thinking today that maybe Thomas Etheredge’s amusement park idea wasn’t so hot after all.

According to the Associated Press, attorneys for Hard Rock Myrtle Beach Holdings LLC have filed for liquidation bankruptcy, eight months after the $400 million 55-acre amusement park opened. The park was the biggest single investment ever in South Carolina tourism.

Last month, the park was auctioned but no bidder who could pay at least the opener of $35 million, or about 9 cents on the dollar, emerged.

In the words of the immortal Yogi Berra, “It’s like deja vu all over again.”

No new Big Dog plant anytime soon

Back in 2005, Sheldon Coleman bought 106 acres at the K-96 and Greenwich Road interchange as a site for a future Big Dog Motorcycles plant if the company’s dramatic growth continued. Of course, that turned out to be Big Dog’s high point and the company has shrunk considerably since then.

On Friday, Coleman confirmed that he no longer plans to put a Big Dog factory out there, but was coy about what he would do with the land: “I’m pursuing other options.”

As to Big Dog, the company now has more capacity at its E. Douglas plant as its production slows. He said they continue to make it more efficient as well. I’m guessing it will be a long time before Big Dog leaves that location.

Mayans: ‘No good deed goes unpunished’

Former Wichita Mayor Carlos Mayans disputes accounts from developers, real estate analysts and government officials who say he led a move to cut WaterWalk funding in 2003, leading to Bass Pro Shop’s refusal five years ago to locate in downtown Wichita. Below are excerpts of his e-mailed comments reprinted verbatim:

In 2002 BC (Before Carlos), the issue of the WaterWalk and Bass Pro Shop came to the City Council led by former Mayor Knight and that Council could not muster the five votes needed to approve the WaterWalk project. The developers had been courting the BP officials for their commitment to them. BP did not want to come to Wichita until the developers had an agreement with the City of Wichita, but the Council voted NO several times to no avail. Former Council members Gale, Lambkee, and Martz would always vote against the project. Knight, Brewer and Pisciotte would vote yes. It was an impasse and the project funding was never approved under their term. What this means is that if there was no WW project approved BP would not come to town.

In 2003 BC there was another vote on the project and it failed once again. A new Mayor and two new City Council members were elected on April 1, 2003. Many thought that the new Mayor and Council would continue to disapprove of the project, but we all kept an open mind until we knew more about the WW project. I met with BP officials and developers about three months after the election and BP officials told us that they were disappointed with the lack of support from the previous Council and they indicated that they were running out of time and may build somewhere else. I indicated to them that many people in the community opposed the project and that the new council was still looking at the project and keeping an open mind. Over the next few months I visited with the Council members and the developers trying to forged an amended WW agreement that could muster the five votes necessary. Remember, if the project was not first approve! d nothing else could happen. Finally, in December of 2003, I had an amended WW agreement that cut spending by 10% or $3 million dollars. The types of cuts and where they were made on the project were decided by the developers not the Council. In December, I led the effort, with my vote, in support and approval of the WW project 5-2. Brewer, Fearey, Gray, Schlapp and I voted on the affirmative, Lambkee and Martz voted no. By then BP, was already negotiating in Oklahoma and no longer interested in Wichita.”