Korroch isn’t talking, but he and WaterWalk developers have been working with the city and are formally requesting help from the Wichita City Council at Tuesday’s meeting.
In addition to asking for up to $12 million in industrial revenue bonds, they’re also asking for a new kind of financial assistance.
“They’re asking the city to create a community improvement district,” says Allen Bell, the city’s urban development director.
Last year, the Kansas Legislature passed a law to allow the creation of the districts, which are redevelopment tools that provide increased sales tax for businesses.
The districts allow up to 2 percent additional tax that the state would send back to the city.
“We would then use that money to either pay it back to the developer to reimburse the developer for costs they put into the project or use it to pay off city bonds,” Bell says.
Korroch and WaterWalk are requesting the full 2 percent and would use it for project costs — not for city bonds.
“That’s called the pay-as-you-go financing,” Bell says.
The maximum term that state law allows is 22 years.
First, though, the City Council has to decide whether to allow the districts and what the citywide policy for them would be.
Bell says at the workshop after the City Council meeting, there will be a presentation on the districts and how they work.
The money can be used for things like building buildings and constructing infrastructure.
“It can be used for a lot of different things,” Bell says. “That’s why the city wanted to be sure it had a chance to adopt a local policy to govern that.”
Korroch and WaterWalk also are requesting up to $12 million in IRBs, though Bell says the final amount is likely to be more like $9 million or $10 million.
“The purpose of the IRBs is to allow the project to receive a sales tax exemption on the construction costs,” he says.
The Council will consider a letter of intent from Korroch and WaterWalk asking for IRBs and the community improvement district.
Even if the letter is approved, each action will require several more steps before being finalized, and that includes the establishment of a new city policy on the districts.