Search Results for: "real development"

Wichita’s Jeff Longwell on TIF districts, tax abatements

Is a tax increment financing (TIF) district a tax abatement? Wichita city council member Jeff Longwell, now Wichita's vice mayor, doesn't think so. During this week's city council meeting, Longwell said this in explaining his support of a TIF district created for the benefit of Real Development: "One of the things that people I think need to understand is that this is not a tax abatement." He said tax revenues will increase from $28,000 to half a million dollars, repeating that it is not a tax abatement. So is it true that TIF is not a tax abatement? A little background: The Wichita City council grants property tax abatements regularly as part of its Industrial Revenue Bond program. In the IRB program, the city is not the lender of funds,…
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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…
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Wichita city hall silent on handling of ethics issue

A correction has been noted in this article. On Tuesday the Wichita city council will hold a public hearing regarding a request by Real Development for a $2.5 million increase in tax increment district financing. While this proposal should be opposed on its merits, there is reason to give extra scrutiny to this matter. That's because Real Development employs the services of Wichita public relations executive Beth King. What matters to public policy is that last year she and Wichita City Manager Robert Layton began a dating relationship which continues to the present. Documents released to me in response to a records request indicate that King is no mere publicist. Instead, it is apparent she plays an active role in negotiations between city staff and Real Development. The mayor, city…
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Wichita Center City South TIF Changes Slip Through

At the December 16, 2008 meeting of the Wichita City Council, a major revision to the development plan of a downtown Wichita TIF district was made. This TIF district is a project of Real Development, whose principals Michael Elzufon and David Lundberg are commonly known as the "Minnesota Guys." The changes to this plan were not made in secret, but the document describing them was buried in the 675-page agenda report (or "green sheets") for that meeting. These changes escaped the notice of any local news media (at least my searches show no stories being reported), including the Wichita Eagle and Wichita Business Journal. At the city council meeting, no one from the public spoke or asked questions. No council members did, either. The original plan dates from July, 2007.…
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Wichita Exchange Place project passes

At today's meeting of the Wichita City Council, final approval of the city's involvement in a downtown Wichita development passed. The item, which appeared on the consent agenda, was the second reading for the ordinances that authorize the Exchange Place Project, including the expansion of its tax increment financing district. (A consent agenda is a group of items that will be voted on in bulk with a single vote. An item on a consent agenda will be discussed only if a council member requests the item to be "pulled." If that is done, the item will be voted on separately. Generally, consent agenda items are considered by the city to be non-controversial, but that is not always the case.) Council Member Lavonta Williams wanted to know more about the change…
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Kansas and Wichita quick takes: Monday January 31, 2011

Some downtown Wichita properties plummet in value. A strategy of Real Development -- the "Minnesota Guys" -- in Wichita has been to develop and sell floors of downtown office buildings as condominiums. Some of these floors have been foreclosed upon and have come back on the market. Some once carried mortgages of $400,000 or more, meaning that at one point a bank thought they were worth at least that much. But now four floors in the Broadway Plaza Building, three floors of the Petroleum Building, two floors of Sutton Place, and one floor of the Orpheum Office Center are available for sale at prices not much over $100,000, ranging from $14 to $25 per square foot. Other downtown office buildings -- very plain properties -- are listed at much higher…
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In Wichita, special assessment financing gone wild

At today's meeting of the Wichita City Council, a privately-owned condominium association is seeking special assessment financing to make repairs to its building. Special assessment financing means that the cost of the repairs, $112,620 in this case, will be added to the building's property taxes. Actually, in this case, to each of the condominium owners' taxes. They'll pay it off over the course of 15 years. So the city is not giving this money to the building's owners. They'll have to pay it back. The city is, however, setting new precedent in this action. First, special assessment financing has traditionally been used to fund infrastructure such as streets and sewers, and new infrastructure at that. The city, under its facade improvement program, now allows this type of financing to be…
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How to turn $399,000 into $65,000 in downtown Wichita

Once embraced by Wichita officials as heroes, real estate listings for two floors of a downtown Wichita office building illustrate the carnage left behind by two developers. A decade ago the "Minnesota Guys" were the darlings of downtown Wichita. With a controversial form of real estate ownership -- tenancy in common -- they promised to revive downtown Wichita. City officials and civic leaders praised them. The city council found them so endearing that it awarded the Minnesota Guys over $10 million in tax increment financing -- later increased at their request -- although the developers were never able to tap into those funds. Now the two developers are facing numerous felony charges relating to securities violations. This week the Wichita Business Journal reports that two floors of a prominent downtown…
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Articles of Interest

Education reform, downtown Wichita arena, Kansas smoking ban, downtown developers Education’s Ground Zero (Nicholas D. Kristof in The New York Times) Describes the efforts of Washington D.C. public schools chancellor Michelle Rhee to reform the system. She's fired one-third of the principals. Kristof reminds us of the importance of teachers: "The reform camp is driven partly by research suggesting that great teachers are far more important to student learning than class size, school resources or anything else. One study suggests that if black kids could get teachers from the profession’s most effective quartile for four years in a row, the achievement gap would disappear." In Wichita, however, USD 259 is taking the opposite approach. Intrust Bank Arena management contract unusual, but not necessarily bad (Bill Wilson in the Wichita Eagle)…
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Tax increment financing questions topic at Wichita city council meeting

On Tuesday the Wichita city council heard a request by Real Development for a $2.5 million increase in tax increment financing on a downtown project. Discussion during the meeting revealed how little is known about the numbers that the city uses in deciding whether to participate in the project. Numbers that don't make sense, plus the fact that the applicant has not responded to the city's request for new numbers, indicate that this proposal should be rejected. A question that I asked referred to some numbers presented by in the materials supplied to council members in the public, specifically the total investment and market value for the project. When the project was revised for the first time in 2008, the plan called for total investment of $27,800,000, producing a project…
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