Kansas and Wichita quick takes: Tuesday May 24, 2011

Wichita office condo values. Wichita Business Journal: “Prices on two bank-owned floors at the Broadway Plaza building — at the corner of Douglas and Broadway — were reduced last week to just $59,000 apiece. … They are just two of a handful office condo floors that originally were developed by Minnesota-based Real Development Corp. Most of them were sold to California investors, and many of them subsequently landed in foreclosure. Prices since then have plummeted.” … Many people may know Real Development for its two principals known colloquially as the “Minnesota Guys.” Tax values on these properties have fallen, too. According to Sedgwick County records, one floor of the Broadway Plaza that is owned by a bank was appraised at $388,000 in 2007. Its appraised value dropped to $210,900 in 2008, where it has remained since then. Another floor in the building went from $385,000 to $180,000 at the same time. … This drop in real estate values is not reflective of the general trend of office values in downtown Wichita. A survey by two real estate firms shows rents for both class A and class B office space holding steady in downtown over the same time period. … While the floors in question are not currently owned by the Minnesota Guys, the projects were developed and marketed by them. … Other projects developed by Real Development have suffered problems dealing with ordinary issues. In 2009 a condo building required special waivers of city policy in order to provide special assessment tax financing for facade repairs. The Minnesota Guys also aggressively seek subsidy from local and federal government.

Gates’ education reform criticized. Bill Gates of Microsoft fame has long been interested and involved in reform of public schools. But not all appreciate his efforts. Since Gates has turned his attention to “the hunt for bad teachers,” Diane Ravitch concludes that “So far, the main effect of Gates’ policy has been to demoralize millions of teachers, who don’t understand how they went from being respected members of the community to Public Enemy No. 1.” … I might be able to help Ravitch understand: It was when the teachers unions transformed from a professional association to a labor union, one which constantly fights all reforms, especially those that are aimed at improving teacher quality.

Pawlenty, Gingrich on ethanol. The Wall Street Journal notes that Republican presidential candidate Tim Pawlenty is opposed to the federal subsidies for ethanol — “a challenge to King Corn,” as the Journal phrased it. This is in opposition to Newt Gingrich, who the Journal recently labeled “Professor Cornpone.” In the op-ed from January, the editorial board wrote: “Given that Mr. Gingrich aspires to be President, his ethanol lobbying raises larger questions about his convictions and judgment. The Georgian has been campaigning in the tea party age as a fierce critic of spending and government, but his record on that score is, well, mixed.” … After noting two of Gingrich’s failures to support limited government, the January article concluded: “Now Republicans have another chance to reform government, and a limited window of opportunity in which to do it. The temptation will be to allow their first principles to be as elastic as many voters suspect they are, especially as Mr. Obama appropriates the language of ‘investments’ and ‘incentives’ to transfer capital to politically favored companies. Many Republicans have their own industry favorites, and such parochial interests could undercut their opposition to Mr. Obama’s wider agenda. So along comes Mr. Gingrich to offer his support for Mr. Obama’s brand of green-energy welfare, undermining House Republicans in the process. … Some pandering is inevitable in presidential politics, but, befitting a college professor, Mr. Gingrich insists on portraying his low vote-buying as high ‘intellectual’ policy. This doesn’t bode well for his judgment as a president. Even Al Gore now admits that the only reason he supported ethanol in 2000 was to goose his presidential prospects, and the only difference now between Al and Newt is that Al admits he was wrong.”

Permission required to export natural gas. Friends University Professor Malcolm Harris explains at least one reason why we have a deficit in our balance of payments: “Apparently we have rules that prohibit exporting natural gas. Getting a ‘Get Out of Jail Free’ card also allows others to lobby against the license.” And someone did lobby against the license. … Harris also explains the importance of shale gas, meaning gas extracted using a relatively new drilling process. Gas prices today are just one-third of the peak in 2008, Harris writes.

1 Comment

  • ictator -

    This is very useful information about the decline in downtown Wichita real estate prices. Since the city has a special taxing district for downtown, this decline in values could impact what has been their stagnant property value base.

    The WDDC is always talking about downtown Wichita development, but the most recent and significant action since the disappearance of the “Minnesota guys,” has been the YMCA downtown expansion. That action, will create a new building a amenities, but it will take all of the properties that had been acquired for this project, off the property tax rolls.

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