Wichita City Council member Jim Skelton was right last week to urge that the council consider the deal to pay off some Eaton Place debt not as part of the consent agenda at a workshop but as its own agenda item during a televised meeting, which will happen today. When Skelton balked, council member Sharon Fearey struck a wrong note by declaring, "I thought we had it all worked out from executive session." Some council matters are rightly discussed in closed session, but none should be settled there, informally or otherwise, especially when they concern subjects of as much interest to the public as the Eaton.
That said, the complex deal seems reasonable — to accept $427,000 from a developer to retire more than $1.4 million in government loans used for the $15.3 million public-private project. It means the city will see some money now, rather than risk having to pay an additional $685,000 under the lender support agreement or wait decades for the developer to pay the full loan amount.
For all the tricky decisions going in and difficulty finding retail tenants since, Eaton Place has proved itself. The city spared the historic Eaton Hotel from the wrecking ball and has seen it attract apartment tenants. And brighter days likely are ahead for its 30,000 square feet of commercial space once the downtown arena goes in nearby.
Posted by Rhonda Holman
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24 Comments
It’s a nice place.
Yes Joe, it IS a nice place. AND, it should be able to pay its bills. Maybe I should ask the City to let me settle my taxes at 30 cents on the dollar.
The words from Sharon Fearey show why people are distrusting of local government. She along with the rest of the Council are making decisions behind closed doors that should be made in front of the public. It was just a few years back that the city council held an illegal meeting that the public found out about. It appears that another one has also been held.
Then they wonder why people do not trust them. How many other deals are made in these private meetings? If the Wichita City Council ad County Commissioners had real meetings like they do in Topeka the people would be able to see how their elected official really is.
Why are the Wichita City Council and Sedgwick County Commissioners meetings all held during the day? Don’t they realize that most people work during the day for a living? How about holding a meeting at least once a month in the evening so that other people could attend the meetings? There are a lot of towns here in Sedgwick County that hold their meetings of an evening so that the people can attend.
Give this some consideration and while you are at it stop holding meetings behind closed doors that are illegal.
This is EXACTLY why the Kansas Press Association backed a proposal in the legislature this year to have all executive sessions recorded. My understanding is the recording would be sealed unless there was cause later on to question what was done during executive session.
Do you know who defeated it? Local government officials. City councils, county commissioners, school boards, etc. all lobbied and testified to stop this proposal.
They painted it as the “whiney media” wanting to pry into their secret meetings. Like those damn taxpayers actually have a RIGHT TO KNOW what their elected officials are up to. Damned uppity voters anyway!
I guess we see now why local government fought the proposal. The kansas open meetings law is a joke. Rarely is it possible to prove that meetings are held in secret, or that topics were discussed that did not belong in executive session. NO decisions are to be made in executive session.
Looks like some were made here, and now there is no way to prove it other than hearsay. No recording to unseal. Sweet if you are an elected official seeking less and less accountability to the voters.
Kansas… as totalitarian as you think!
Like Lucy Burtnet on the County side Sharon Feary is an entrenched member of the GOBN. She also needs to be replaced.
Wouldn’t they be able to get more money for the Eaton after the Arena is built? I believe it is a safe guess to make that the Eaton property value should increase with its notible neighbor up the street. Why lose money now that could be made up with increase property values?
The issue here is not whether the Eaton can “pay its bills” or whether they city is losing money on this deal. It appears as though it is not. By accepting the lower amount now, the city is reducing its exposure to inflation and guarantying that it will not be responsible for additional payments to the lender. Advanced payments like these are common in business–the city was smart in accepting this deal.
The issue is whether this particular matter should have been handled in executive session or in a public meeting. Some things should be handled behind closed doors–internal issues, personnel issues, etc. A financial matter involving a project that has otherwise been open to public debate? I don’t think so.
“And brighter days likely are ahead for its 30,000 square feet of commercial space once the downtown arena goes in nearby.”Care to lay a little money on that, Rhonda? Oh, wait, it’ll be just after pigs fly and hell freezes over.
we should recognize in advance that often these agreements are made with the full anticipation that something like this will happen: the private developer will not follow the terms of the deal, and the government will pay.
Steve, the things you mentioned — “the city is reducing its exposure to inflation and guarantying that it will not be responsible for additional payments to the lender” — weren’t these factors or considerations foreseeable at the time the deal was struck some years ago?
I’m not sure I understand what you’re asking KCL. Unless Nostradamus is working at City Hall, I doubt anyone would have foreseen that the developer would be willing to make an advance payment on the loan just a few years after the deal was struck. But maybe that’s not what you’re saying…what are you saying??
In essence, what the city has done has accepted an amount of money that in present value equals the future value of what they would have received. In other words, the 400 g’s they receive today would be essentially equal to the $1.4 million 20 or so years from now taking inflation and interest into consideration.
“…the private developer will not follow the terms of the deal, and the government will pay.”
???? This deal BENEFITS the city, KCL. We are no longer the guarantor on this loan. The loan has been paid off early. And the city has received the same amount of money it would have if the loan had gone full term. KCL, the developer did the city a favor. We came out on the good end of this. Be thankful.
Hey, thanks for posting, Steve! It’s good to have a variety of opinions here in this blog!
That was quite perceptive, Original Steve. What a difference it will make in my life.
All kidding aside, if you have an opinion about anything other than your fellow bloggers, you might consider posting it. . .ya know?
Uhm. . you do have other opinions, don’t you? Let’s hear them!
Best wishes,”Mom”(Name courtesy of Hank,and sincere apologies to MOTHER).
Original Steve is the original troll.
He’s the epitome of troll-dom, the scum that is too cowardly to put forward their own opinion but just cheap-shot others.
He also seems to enjoy attention, even if it’s negative attention.
The Original and Un-original Steves have nearly identical return addresses. Makes ya go hmmmm. . .
Is this kind of like matter and anti-matter?
Maybe it’s Schizophrenia, Darwin. Oh well, if they (he/she)want to cheap shot me (and his/her self) that is fine. Since they (he/she) obviously have no opinions on anything that truly matters, I don’t have to listen or respond.
I wish I could cancel that snot-puke out.
He was agreeing with Steve because Steve was DISAGREEING with Kansas Classic Liberal, who he mistakenly thought was one of my aliases.
It isn’t.
Stupid prick.
Everybody has moved past trolling around here except for Original_Steve.
How’s it feel to be the last loser on the website?
Loser.
????
Ummm, anyway, you were saying KCL, “weren’t these factors or considerations foreseeable at the time the deal was struck some years ago?”
Getting back on track, can you explain what you meant?
You might be right, Steve. I let my inherent distrust of government support of private businesses lead me to a conclusion that might not be supported by facts.
So let’s look at some facts. Would a sharp young accountant care to perform a calculation and tell us what is the interest rate that is implied in the deal? That would be a start of gathering some facts.
As to the ability to foresee that things like this would happen, the newspaper story (and your comment, too) made it sound like only now has the city council realized that there was a risk the city might not be paid.
I don’t know that the city was ever blind to the risk in the deal. Anytime you do a business deal you subject yourself to risk. Smart leaders manage risk, but they can never eliminate it. But no one should ever run away from risk, especially if you’re a city trying to reinvigorate a delipidated downtown. I wouldn’t take from this news that the city accepted the payment because they were afraid they wouldn’t get paid. The Eaton has been a success and the track record of the company that owns it has been solid. With all due respect, it may very well be your inherent mistrust in government that made you think this way, as you said. I don’t know if that view isn’t supported by facts, though!! Look at how they handled the situation–in a closed door meeting!!!
What I get from the news is that the developer recognized an opportunity to get rid of a liability from their balance sheet. Like you or I, they like paying off loans early as well. The city also recognized an opportunity to lesson its risk–and receive the same amount of money as they would have received anyway if the loan went full term.It was a “win-win” situation for both parties.
I’ll get back to you on the interest rate ASAP!!
As to the succes of the Eaton, doesn’t the article at the start of this topic state they are having touble renting their retail space?
I’m sure that when we peel away the veneer of this deal, we will find that the City assumed much risk, and is not in a position to profit.
We might ask why downtown is (or was) “delipidated.” Could it be that people, when spending their own money, decide they don’t want to be downtown? It’s mostly when people are spending someone else’s money that downtown becomes desireable.
There is the exception of the guys from Minnesota. To my knowledge, they do not accept government handouts. They face the discipline of the market headon. Other projects don’t.
Since you do not know me, Steve, I’d appreciate it if you would refain from telling me how I prefer to pay loans.
Ben,
Sharon will be replaced at the next election because she is term limted.
So this will be a good time to find a good replacement.
Geez, KCL, okay, I won’t assume you like to pay off loans early. Get a grip, man, I’m not being hostile.
KCL, it’s in no one’s interest to see areas of town blighted. I’m a free market kind of guy, but it’s dangerous to believe that a certain way of doing things works 100% in each and every situation. In this situation, the free market has ****** up. It left the core area–arguably the most important, where 20,000 people work–in disarray. The free market won’t screw up most of the time, but it did this time. Now we’ve got to fix it. No one seems to be complaining loudly that the city is spending millions to revitilize 21st through Little Mexico. Why is this???
The free market is the way to go, but it’s not the end-all-be-all solution for everything. Sometimes it needs a little help.