Monthly Archives: August 2012

New rules give ‘spec building’ developer a bigger tax break

A week after passing new guidelines giving tax breaks to developers of speculative industrial buildings, the City Council granted a 100 percent property tax abatement to a builder planning a middle-size warehouse in south Wichita.

The decision on the tax abatement was delayed a week because developer David Shannon had originally been projected to get a 90 percent tax abatement.

That changed and Shannon became eligible for the extra 10 percent after the council passed new policies last week offering full tax abatement for speculative buildings of 50,000 square-feet or more.

The original request was delayed from last week to this week so that paperwork could be redone to increase the subsidy for Shannon’s planned building, a 90,000-square-foot warehouse-type building.

City staff had proposed a sliding abatement scale based on square footage with less-risky smaller buildings getting less of a tax break.

The city is trying to encourage developers to build “spec” industrial projects – buildings that are put up with no identified user — because of complaints from the business community that Wichita lacks business-ready industrial space.

City officials say the lack of spec buildings hurts Wichita’s efforts to attract new companies that don’t want to absorb the delays and cost risks involved with building their own facilities.

The tax abatement will save the developer about $100,000 a year.

It will run for five years and be renewable for a second five if the building’s future tenants meet job-creation goals.

Conservative activist Bob Weeks told the council he thinks the new policy gives an unfair advantage to new construction. He said it hurts owners of existing — and taxpaying — buildings “when City Hall sets up competitors with a large cost advantage.”

The council unanimously approved the tax break for Shannon’s building.

State taps KDOT funds to help complete Capitol renovations

A photo of the Kansas State Capitol taken about a week ago

TOPEKA — The State Finance Council Monday approved  a $17.4 million financing package, including state highway department money, to pay for a visitors center, driveways and landscaping at the Capitol, a move that should put an end to an extensive renovation project that has lasted more than a decade.

The plan takes $7 million from the Kansas Department of Transportation for grounds and roads work. Meanwhile, the state will issue $5.4 million in bonds for the visitors center. Another $5 million of money saved during the lengthy construction project would also be used.

Sen. Carolyn McGinn, R-Sedgwick, cast the lone dissenting vote, saying that she disagrees in principal with using KDOT funds on the project and that the full legislature should vote on a project intended to pay for a building that is for the people.

“It seems like we’re continuing to use this as a slush fund,” McGinn said.

The KDOT money comes from their operational fund, not construction funds.

McGinn said lawmakers rejected a similar bonding proposal two years ago. Monday’s vote came from the state finance council, which is comprised of eight top state lawmakers and is chaired by the Governor.

“I truly believe that this is the peoples’ building and I think the people that represent the people should be the ones that vote for that,” McGinn said.

The 7-1 vote capped off an hour-long discussion that exposed communication problems among law makers, the state architect and Gov. Sam Brownback.

House Speaker Mike O’Neal, R-Hutchinson, said he thought lawmakers had already approved money to create a visitors center “shell” that would provide a nice entrance on the Capitol’s north side.

“It was my understanding that we were done with the bonding that was necessary to get us access and functionality at the Capitol,” he said over speakerphone as Brownback and other listened from the Capitol. “This is a significant misunderstanding.”

Statehouse Architect Barry Greis said that the state never approved money to finish off the entry way, which is currently a hodgepodge of sheet-rock walls and temporary construction that leads visitors from an underground garage to the statehouse with a line of red tape.

The new funding will pay for a visitor’s center, including a lobby, elevators, security areas, audio and visual rooms and a dining area, Greis said.

The $332 million Capitol renovation project has run far beyond its original budget and has taken much longer than expected. It should be completed by the start of 2014.

Brownback said that he doesn’t like the costs associated with the project and has been disappointed with the growing expenses associated with replacing the Capitol’s copper dome.

“I haven’t been the biggest fan of this project,” he said. “But it’s just time to wrap it up.”

Gov. Sam Brownback talks with reporters Monday.



Kansas good for business, dead last or what?

TOPEKA — The Kansas Department of Commerce shared some good news Thursday — Kansas ranks 8th on a list of most business-friendly states put together by an Illinois-based real estate group.

“We have worked diligently over the past 18 months to create an environment that will encourage business expansion and job growth in our state,” Kansas Commerce Secretary Pat George said in a news release.

While that may be seen as good news, looking back a few years in the Pollina Corporate Real Estate Inc polls shows Kansas is slipping in their rankings from 6th last year and 7th in 2010.

Business climate rankings vary widely, depending on methodology and who is doing the ranking. In May, ranked Kansas 11th. The Department of Commerce says Forbes ranked Kansas 12th in its most recent “Best States for Business” report.

In some surveys and rankings, Kansas falls near the middle. But when it’s near the top or bottom, it often makes news and/or political fodder.

During this summer’s campaigns, voters heard that Kansas comes in “dead last” in private sector job growth and that companies like Boeing are leaving because of its business climate.

The mixed message wasn’t lost on Wichita Republican Sen. Jean Schodorf, who was defeated by Wichita City Council member Michael O’Donnell after a bitter campaign this summer.

“It’s ironic that only 3 weeks ago, the Chamber of Commerce was touting Kansas dead last as the worst state in the nation for business development. I wonder what they will have to say now,” she wrote on her Facebook page.


Wichita City Council puts fluoride to a public vote

The Wichita City Council has decided to have a public vote on water fluoridation, an issue most of the country decided half a century ago.

The measure will appear on the Nov. 6 general election ballot.

After decades of pushing the issue of fluoridation to the back burner, the council was forced to take action by a petition drive.

Fluoride supporters gathered more than 11,000 signatures, forcing council members into a position where they either had to approve fluoridation outright or put it to a vote.

Council member James Clendenin argued for putting fluoridation to a vote, saying that citizens “do have the capacity to decide” what they want to have in the water.

He was joined by council member Lavonta Williams, who said seven people shouldn’t decide on an issue that affects every resident.

Council member Janet Miller argued that fluoridation has been proven safe and effective in preventing tooth decay and that the city should skip the vote and “join the 21st Century.”

The decision came after an extended public hearing in which proponents of fluoridation, mostly doctors and dentists, argued that its benefits to preventing tooth decay are unassailable.

Pediatrician Larry Hund said a study by the Sedgwick County Health Department showed 71 percent of children in the county had cavities by the third grade, compared with 58 percent statewide. Of 18,000 children screened, 2,300 had tooth decay, he said.

“As a scientist first and a physician second, I assure you there’s no scientific debate, just a social one,” Hund said. “Numerous studies over 65 years of experience have proven that community water fluoridation is safe and effective at the optimum levels.”

Opponents argued that fluoridation is at best forced medication and at worst causes diseases from heart disease to brain damage.

“I oppose fluoridation primarily because I believe in freedom,” said John Axtell, an engineer. “It’s freedom that united this country to become a nation, it’s freedom and the corollary to freedom which is individual responsibility, personal responsibility that made this nation powerful and great.”

Zella Newberry, a massage therapist, handed out tubes of toothpaste to the council members and invited them to read a warning label urging users to seek medical care if the toothpaste is eaten.

“If ingested, it says warning, it’s a poison,” Newberry said. “My case rests.”

Miller responded that swallowing toothpaste can give a person a stomach ache, but that’s about all.

Dr. Amy Seery, a pediatrician, said fluoride opponents and the internet sites where they get their information make the mistake of glossing over the difference between a therapeutic trace of fluoride in drinking water and a massive overdose of the mineral.

She said any substance on the planet, including vital life needs such as water and oxygen, can be harmful in too large a quantity.

“Some people think five minutes research with Dr. Google makes them an expert,” she said.

Council OK’s citizen posse to remove unauthorized signs

Following a hardfought political primary season that saw major streets lined with hundreds of campaign signs, the Wichita City Council has decided to allow trained volunteers to remove unauthorized signs from city rights-of-way.

The council voted 6-1 to toughen its sign ordinance, authorizing fines starting at $50 and rising to as much as $1,000 per sign for repeat violations.

In addition to political signs, the rules would also apply to temporary garage-sale and real estate signs placed on public property or in the right-of-way between a city sidewalk and the street.

The city already bans temporary signs in the public right of way, but the Office of Central Inspection, tasked with enforcing the ban, complained that it is “inefficient, labor intensive, and achieves mixed results.”

“In an effort to address the negative impact of sign blight, OCI employees dedicate hours each week to removing signs illegally placed in the right of way,” according to an OCI staff report. “Despite OCI’s best efforts, sign blight remains a problem throughout the city.”

To change that, the council authorized its department of Neighborhood Services and OCI to recruit and train volunteers to police signs.

The volunteers would be authorized to remove signs that violate the ordinance and either dispose of them or turn them over to city officials for possible prosecution.

Also, the changes to the sign code would remove a requirement that the city identify the person who actually placed a sign on city property before levying a fine.

Under the new code, a person or business named on a sign would be presumed to be responsible for its placement and liable to be fined.

The council passed the changes 6-1 with council member Michael O’Donnell in opposition.

Council member Janet Miller said the signs are a “rapidly multiplying nuisance.”

O’Donnell said he was concerned that in a negative campaign, someone could relocate signs from a legal site to get a competing candidate fined for unauthorized signs.

He said the new ordinance is “way too extreme, frankly.”

Members of the public who spoke at the meeting were divided on the new rules.

Several residents told the council that they think the signs are a blight on the city and should be removed.

“It’s ugly,” said James Roseborogh. “I would like this code enforced.”

Opponents said they think the new ordinance is too restrictive of free-speech rights and prevents people who can’t afford commercial advertising from getting out the message on their garage sales and lost pets.

“I look at commercial signs as clutter,” said Mike Wilson. “At least these signs can be removed and thrown in the trash.”

City changes WaterWalk plan to allow apartments, floating stage

The Wichita City Council has approved a $1-a-year lease for 4.4 acres of city property for developers of the WaterWalk to build an apartment complex.

The council also authorized city staff to issue proposals for a floating stage for the project’s long-planned outdoor entertainment amphitheater.

WaterWalk owner Jack DeBoer wants to develop 134 apartments on land near the southwest corner of Maple and McLean, next to the Wichita Ice Center.

Urban Development Director Allen Bell said the land was originally purchased for a parking lot to serve retail development that never got off the ground. It’s not needed for parking anymore, Bell said.

“More likely it would simply remain dirt,” Bell said.

Under the agreement, the city will lease the land to WaterWalk for $1 a year for 93 years. In exchange, WaterWalk will develop an $8.5 to $9 million apartment complex that will go on the property tax rolls.

The contract also has a clause that would give the city 25 percent of the profit from the apartments if the profit exceeds 20 percent, however, Bell said the city doesn’t expect to get any money from that.

The apartment building will have one-, two- and three-bedroom units expected to rent for $650 to $1,200.

During the meeting, representatives from the free-market-oriented group Americans for Prosperity argued that it’s a bad deal for the city.

John Todd, a real estate agent, pointed out that the city had paid $919,000 for the land and that the developers have listed it for sale at more than $1.1 million.

He suggested that as part of switching the plan from parking to apartments, the city should have renegotiated the existing development right with WaterWalk to seek a more favorable deal for the city.

Bell said WaterWalk had listed the property with a real estate company to “test the waters” to see if anyone was interested in buying the development rights on the property. “Their asking price is I’m sure on the high side,” he said.

Bell’s department used the county’s tax appraisal, $479,000, as his estimate of the “opportunity cost” to the city.

In addition to approving the agreement for the apartment project, the council also authorized its staff to issue a request for proposals for a floating stage.

The WaterWalk agreement has always included a requirement for the city to build an outdoor amphitheater as part of the project’s public improvements.

However, the site of the proposed amphitheater has been moved several times as the project has evolved, Bell said.

The current amphitheater site will be between the Gander Mountain store and the Boathouse on the east side of the river, Bell said.

The city has a $247,500 grant from the federal Department of Housing and Urban Development to pay part of the amphitheater development cost. But that grant has to be spent by September of next year or the city will lose it, Bell said.

City officials decided to buy a floating stage because there’s not enough time to build a permanent stage before the grant availability expires, Bell said.

The vote on the changes to the WaterWalk plan was 6-1 with council member Michael O’Donnell dissenting.

Kansas Supreme Court to stream arguments online

People who have Internet access will be able to watch Kansas Supreme Court arguments live online starting next week.

The announcement by Chief Justice Lawton Nuss on Tuesday comes just in time for people to catch arguments in a high-profile case where environmental groups are challenging the validity of state permits for a 895-megawatt coal-fired power plant near Holcomb in southwest Kansas. Those arguments start at 9 a.m. Aug. 31.

Kansas has put audio of state Supreme Court arguments online since 2004.

“We think the video streamed Court sessions can also serve as educational opportunities for the state’s K-12 schools, colleges and universities, and our two law schools,” Nuss said.

Twenty-two other state appellate courts offer video of oral arguments, and 12 of them stream live. Recordings of Kansas Supreme Court arguments will be streamed live and then archived on the Judicial Branch website for later viewing.

Activists hand out “pink slips” assailing Romney and Ryan on jobs

Jan Swartzendruber passes out anti-Romney/Ryan "pink slip" to a passing motorist.

A handful of activists associated with gathered at the corner of Rock Road and Kellogg Thursday to pass out “pink slips,” outlining what they say would be job-killing consequences of electing Mitt Romney and Paul Ryan as president and vice president.

Darting in and out of the rush-hour traffic, the activists passed out their slips headlined — “You’re fired!” — to passing motorists.

The slips said that experts project that a budget plan Ryan proposed in Congress, which Romney has embraced, would cost the nation 1 million jobs and lead to more outsourcing.

They also put the pink slips on windshields outside a nearby bank building where Rep. Mike Pompeo, R-Wichita, has his local office — until they were ordered by a property manager to stop.

“We’re trying to make a difference,” said Elizabeth Bishop, a former planning commissioner who is active in local politics. “It’s a very, very red state, but there’s lots of blue dots. Every now and then we blue dots want to make some noise and let people know we’re here.”

The local event was part of a national “Pink Slip Day” organized by MoveOn, a political group associated with liberal billionaire George Soros.

4 Wichita students among those recognized for reading most books over the summer

TOPEKA — Four students from Wichita are among 20 students who will be recognized by Gov. Sam Brownback this weekend for reading the most books during the summer reading program Read Kansas Read.

The Wichita students are Paige Albert, Abbie Shurts, Angela Davis and Lacie Bratton, according to the governor’s office. The students will join other top readers for a picnic and celebration at Cedar Crest on Saturday.

The summer reading program started last May as an initiative of Brownback, the Kansas State Board of Education and the State Library of Kansas. Students statewide make a list of the books they read, and they hand the lists in on Aug. 1. More than 400 students participated. Their reading logs included more than 10,000 books over two months. The two students who read the most in each state board of education district were invited to join in the celebration.


Democrats, KU law professor say new tax cuts pressure local governments

Democratic Party Chair Joan Wagnon and KU law professor Martin Dickinson discuss income tax cuts Thursday at the Capitol.

TOPEKA – The income tax cuts signed into law by Gov. Sam Brownback will force cuts to important public services and put pressure on local governments to raise property taxes, Joan Wagnon, a former secretary of revenue and current chair of the Kansas Democratic Party, said Thursday morning.

Eliminating income taxes on many businesses and cutting individual rates will create an imbalance in Kansas’ tax system and put an increased burden on the poor, she said.

Wagnon pointed to several studies that dispute the notion pushed by Gov. Sam Brownback’s administration that states with no income tax have better economic growth than those with higher taxes.

She said Brownback’s tax consultant, Arthur Laffer, cherry-picks data to try to convince state lawmakers that tax cuts are the solution to economic problems, and she said that Laffer’s philosophy has been disproved many times over.

“This tax plan is part of Laffer’s fairy-tale,” she said.

Martin Dickinson, a long-time University of Kansas law professor, said the cuts that go into effect next year will give Kansas one of the most regressive tax systems in the country because it will create low rates for wealthy people and businesses while likely forcing cuts to services that benefit the poor.

Because the bill eliminates nonwage income taxes for many business owners, it will create disparities in workplaces where bosses who make a lot of money will pay no taxes and their employees who get paid in wages will be paying taxes.

Dickinson, Wagnon and Mark Desetti, a policy director with the Kansas National Education Association, appeared at a news conference two days after Laffer and Brownback appeared at a forum in Overland Park where they boasted that the tax cuts will created thousands of new jobs.

Brownback gave Laffer a $75,000 contract to consult with the state on tax reform efforts earlier this year, and Laffer tried to rally support for a massive tax-cutting plan at legislative hearings during the legislative session. The plan called for reduction of individual income taxes, the phasing out of income taxes on businesses and the elimination of more than a dozen tax credits and deductions, including several popular ones such as the home mortgage deduction and the earned income tax credit that benefits the working poor.

That plan failed to generate support in the House and Senate. But it was advanced to the Senate where it was drastically altered, driving up the cost of the plan. Several Republican senators who initially voted against the bill changed their votes on a second round of voting, approving the bill. Then when the House heard the senate wouldn’t consider a separate negotiated plan, it advanced the bill to Brownback, who signed it.

Starting in January, the plan will reduce individual income tax rates and eliminate income taxes for owners of about 191,000 businesses. The new law collapses state income taxes to two brackets and cuts individual rates to 3 percent for married people who file jointly with income of less than $30,000. Income beyond that will be taxed at 4.9 percent.

Conservatives, including Brownback, project it will drive private sector growth and create thousands of new jobs. Other Republicans and Democrats believe it will force the state to drastically cut important core services, including education and aid for the poor and disabled.

Legislative researchers project it will create a cumulative shortfall of more than $2.5 billion over five years.

A study by the Institute on Taxation and Economic Policy that Laffer disputes calls Laffer’s studies showing low-tax states out-perform others “misleading.”

Revenue Secretary Nick Jordan issued a statement saying the income tax cuts were debated extensively and that Kansas now has pro-growth tax reform that lowers rates for all Kansas families.

“While opponents of tax reform try to roll back the clock with scare tactics and their belief in bigger government, Gov. Brownback is committed to funding core government services such as education, public safety and social service, while also looking forward to job creation and economic growth,” he said. “Kansas is open for business.”