Sources: Occidental Management signs letter of intent to buy Union Station

WICHITA — After about five years of courtship with various suitors, it looks like Union Station finally may be engaged again.

Sources say Occidental Management has signed a letter of intent to buy the downtown property that Cox Communications owns and where it previously had its Kansas headquarters.

“We continue to have discussions with interested parties,” says Jay Allbaugh, Cox’s vice president of government and public affairs for the Cox Central Region.

Allbaugh won’t say anything further, and Occidental chairman and CEO Gary Oborny says he can’t comment on the situation.

Union Station and its 111,000-square-foot campus first went on the market in spring 2008, about a year after Cox left for bigger offices at 901 George Washington Blvd.

The list price for the former train station at 701 E. Douglas is $6.4 million.

Clay Center businessman Phil Frigon’s $5.5 million, 2009 deal to buy the campus to create a mixed-use development collapsed when he failed to reach an agreement for the city to lease parking from him for Intrust Bank Arena.

A mixed-use development that potentially would include retail, office and residential space and would help further revitalize downtown has been the top hope of potential uses for Union Station.

Oborny and Occidental have a history of converting older properties into new developments, most notably with the former Northrock 6 Theater at 32nd Street and North Rock Road. They converted the theater into an 80,000-square-foot, Class A office complex where Occidental now has its headquarters.

In a Wichita Eagle article earlier this year, Boston-based consultant David Dixon said Union Station “offers a unique opportunity to create a vibrant mixed-use environment that could be highly competitive and significantly expand the market for downtown living and working.”

“All this will require deep pockets and patient capital,” he said. “And probably a long-term public-private partnership that envisions 10-plus years of expanding development.”

Oborny was quoted in the same story as saying transforming a historic structure costs as much as 30 percent more than a new project would.

“There are a lot of limitations and regulations that have to be met when you’re dealing with a historic structure,” he said. “That’s expensive, and when you tap into a building already on the historic register, it isn’t a choice. You do it by the regulations or you don’t do it at all.”

Occidental president Chad Stafford also was quoted on the importance of historic tax credits as an economic tool.

“Without the tax credits, it doesn’t make financial or economic sense to do these deals,” he said. “The historic tax credit is much more critical … for the stock of older downtown buildings that don’t come with significant developable land.”

Credits would be available with the redevelopment of Union Station.

NAI Martens is representing Cox in the sale of the building.

There are still a number of details to work out to make the latest potential sale work. We’ll let you know what happens.