The Intrust Bank Arena tax increment finance district is back on the agenda, but not for the regular Tuesday meeting. It will wait until a special 1 p.m. meeting Thursday when Mayor Carl Brewer and Vice Mayor Sue Schlapp return from a taxpayer-funded trip to China with other Kansas officials.
The new arena TIF district is about half the size of the 30-block blanket the council originally agreed on — only to be shot down by County Commissioners who questioned the need to use a TIF to pay for street improvements and property acquisition in an area that is already seeing increased property values. The new TIF would appear likely to stoke a similar debate, but its more modest size may be enough to turn a few votes. Wednesday’s Sedgwick County Commission meeting will likely answer that question.
That beefier Thursday agenda can be downloaded in PDF format here. Read on for The Eagle’s coverage of the TIF debate…
COUNTY BALKS AT CITY’S TAX DISTRICT AROUND ARENAFriday, August 15, 2008 Section: MAIN NEWS Edition: main Page: 1A
BY DEB GRUVER, The Wichita Eagle
Sedgwick County is challenging the city to justify its plan to use public money to subsidize private development around Intrust Bank Arena.
The proposed subsidy area is “too big, too nebulous” and doesn’t speak to arena parking and private development, County Manager William Buchanan said in a letter to interim City Manager Scott Moore on Thursday. The Eagle received a copy of the letter.
|Wichita Mayor Carl Brewer said Thursday evening that the county’s concerns caught him by surprise and that he was deeply disappointed.At stake for the county is $3.6 million in annual property tax money that would be diverted from county coffers to pay for streets and other public improvements in the area through a tax increment financing district, or TIF. The county’s $190 million investment in the arena “was undertaken at the explicit request of city officials for the purpose of stimulating development in central Wichita,” Buchanan stressed in the letter. The county had planned to invest much less money to renovate the Kansas Coliseum “but we agreed to set that project aside and relocate our facility in order to support you.”
Buchanan outlined four major concerns about the proposal to expand the Center City South TIF District, which the city approved earlier this month.
The concerns are:
– Private investment is occurring downtown and the need for public investment is not clear.
– The city would use TIF funds to pay for $11.5 million in street improvem ents that the county says should be paid for entirely with city funds.
– The project would drain about $3.6 million a year in county funds away from county services to pay for city projects.
– Every taxable downtown property is having some part of its county property tax diverted to the city to pay for city projects.
“All of these factors lead us to the conclusion that the proposed expansion of the Center City TIF District would create an adverse effect to the county,” Buchanan said in the letter. “The potential loss of tax revenue would hinder effective future delivery by the county of public services.”
Mayor Carl Brewer said Thursday evening that the city would review the county’s letter and concerns and respond “at an appropriate time and in an appropriate way.”
“The letter that we received today is surprising and disappointing in its tone and its content,” Brewer said. “We thought we were working together on improvements around the arena and core area. The language in the letter is out of character with our strong partnership in recent years. I’ve talked to several council members who share my deep disappointment in the letter.”
The county has veto power over the TIF district because county property taxes would be diverted. The proposed arena TIF district is roughly bounded by Kellogg and First Street and Santa Fe and Main.
The tax increment financing district would allow any increase in property tax payments from new developments to be funneled back into the roughly 30-block area to pay for such things as city streets and sidewalks. The captured property tax payments can also be used to tear down buildings and acquire property for private developers.
TIFs‘ past performance
City Council member Paul Gray said Thursday that the county’s concerns are well founded.
He was the only City Council member to vote against the plan on Aug. 5, saying that even city staff noted that the area appreciated in value by 10.5 percent between 2007 and 2008. Such districts are intended to revive blighted and declining areas, he said at the time.
On Thursday, he said that expanding the TIF district would “guarantee no one’s going to do any future development on their own” because they would know they could get subsidized by the city.
“Why wouldn’t you take advantage of it?” he said.
He pointed out that the city has already invested tens of millions of dollars of public money on downtown districts including the WaterWalk, the original Old Town and Old Town Square.
A recent Eagle analysis of city and county tax records showed that nearly $159 million in public money has been spent on Wichita’s tax increment financing districts, to get roughly $150 million worth of new development. That new development equals about a $37 million increase in the property tax base.
Of the $159 million expended, $144 million has gone to three downtown TIF districts – the original Old Town, Old Town Square and the WaterWalk.
Gray said that as far as he knows, the City Council has never rejected a TIF proposal from a developer.
“All we do is listen to the people who benefit from TIFs,” Gray said. “Of course they’re going to want us to vote to do TIFs.”
But, he added, “At what point is enough enough? How often do you have to give vaccinations or steroids to a sick person before they start to get healthy?”
Question of blight
County Commissioner Gwen Welshimer said the area around the arena is not blighted.
“My word, that’s a hot area now with the arena going up down there,” she said Thursday. “It just doesn’t fit the idea of blighted.”
Buchanan’s letter, written on behalf of the commissioners, was “just our first attempt to let them (the city) know we’re not interested in putting a TIF on this entire area that they have described,” Welshimer said.
Commissioner Kelly Parks said he was not aware Buchanan was sending out the letter but said “I do have concerns about those points.”
Parks said he wanted to visit in person some of the buildings in the proposed district to see if they were blighted.
“That’s what TIFs are all about, the blight,” Parks said. “I do want to go physically inspect some of those addresses. I like to get the hands-on experience and see what it is.”
Although he is concerned, Parks also said he was “not ready to have a closed mind.”
Contributing: Dion Lefler of The Eagle
Reach Deb Gruver at 316-268-6400 or email@example.com.
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