Should the Wichita Eagle, a city's only daily newspaper and the state's largest, be concerned about the parties to its business relationships? It's a question that the Wichita Eagle should be considering. But the newspaper's top executives seem to have no concern. On February 14 I sent a message to the publisher and executive editor of the Wichita Eagle expressing my concerns about the newspaper's future landlords. That letter appears below. After several follow-up attempts by email and telephone, neither would respond. Sent I sent this message, I've found I was mistaken about the ownership of the building to where the Eagle will move and become a tenant. Brandon Steven is not an owner. I had relied on Eagle reporting[1. Rengers, Carrie. Wichita Eagle signs deal for new downtown headquarters.…
A Wichita city report provides a somber look at the finances of a tax increment financing district. The City of Wichita Department of Finance has prepared an update on the financial performance of the Old Town Cinema Tax Increment Financing (TIF) District. There's not much good news in this document. The financial performance would be worse if the city had included the costs of the no-interest and low-interest loan made to the owners of property in this TIF district. But it doesn't appear that those costs are included. Here's an excerpt from the report: In 2000, the appraised value of the southeast retail building and the Warren Theatre declined 12% (from $4.5 to $3.9 million) and 33% from ($4.4 to $2.9 million), respectively. These declines occurred as a result of…
As part of the subsidy plan for Douglas Place, a downtown Wichita hotel being proposed, developers plan to make extensive use of historic preservation tax credits to fund their project. This form of developer welfare, besides being inefficient, is largely hidden from public view. According to Allen Bell, Wichita's Director of Urban Development, the project's team, which is lead by David Burk, plans to tap $3.8 million in state tax credits and $3.5 million in federal tax credits, for a total of $7.3 million in this form of subsidy. Tax credits may be a mystery to many, but there is no doubt as to their harmful effect on state and federal budgets. When using tax credits, the government, conceptually, issues a slip of paper that says something like "The holder…
Recently the City of Wichita held a stakeholder meeting regarding Community Improvement Districts and the city's policies regarding them. While the term "stakeholder" is vague and means different things to different people, you might think that such a gathering might include representatives from the community at large. In an effort to achieve diversity, you know. Instead, the meeting was stacked almost exclusively with those who have an interest in extracting as much economic subsidy as possible from the city. There are a few exceptions, notably Wichita developer Johnny Stevens, who is outspoken in his belief in market-driven development. Stan Longhofer is an academic at Wichita State University, and the last time he offered advice to the city council (at least publicly) the council didn't take his advice, even though they…
Roots of tea party. Richard A. Vigeurie writing in Politico: "Asked about what stirred the tea party movement, [Former VU.S. Senator from Virginia George] Allen blamed President Barack Obama and the Democrats. 'It's what has happened in the last year,' he said. Allen is flat-out wrong. Americans didn’t elect Obama, Senate majority leader Harry Reid (D-Nev.) and House Speaker Nancy Pelosi (D-Calif.) as much as they threw out Republicans in 2006 and 2008. Americans were angry about the GOP officials’ lack of discipline and courage, and their profligate spending and abandonment of small-government, Republican principles." Washington Examiner's Mark Tapscott reacts: "Viguerie is right, of course, and his oped ought to be a reminder to all professional politicians in both major political parties that the Tea Party movement is at its…
At a recent Wichita City Council meeting, Council Member Jeff Longwell (district 5, west and northwest Wichita) was critical of topics broached by two speakers, admonishing them to "take a different approach." The speakers had mentioned votes made and actions taken by the council and the appearance of influence or linkage to campaign contributions. Longwell's concern is understandable. As perhaps the most accomplished practitioner of cronyism on the council, he's dished out millions in taxpayer subsidy to his significant campaign contributors. His acceptance of campaign contributions last summer from a Michigan construction company that had business before the council lifted cronyism to new heights. After that, I thought that we wouldn't ever see a more blatant instance of the appearance of impropriety. That is, until Mayor Carl Brewer started selling…
Last week's meeting of the Wichita City Council provided a window into the attitude of Wichita elected officials, particularly Mayor Carl Brewer. Through their actions, and by their words, we see a government that cares little for the rule of law and good government, and one that is disrespectful to citizens who call attention to this. At issue was the circumvention of a statutorily required public hearing. In order to grant subsidies to a development team lead by David Burk of Marketplace Properties, the city is required to hold a public hearing, which it scheduled for September 13th. That schedule wasn't fast enough for Burk, so at its August 9th meeting the council approved a letter of intent which formalizes the city's desire to do the things that were to…
An incentives agreement the Wichita city council passed on first reading is missing several items that city policy requires. How the council and city staff handle the second reading of this ordinance will let us know for whose interests city hall works: citizens, or cronies. This week I presented the Wichita City Council my concerns about an inadequate developer agreement for a TIF district development project, the Mosley Avenue Project. My presentation centered on the lack of an agreement by the developer to forgo appeals of the tax valuation of the property. The applicant had done this in the past, and it caused a shortfall of TIF revenue that the city had to makeup. The city manager had said that taxpayers would be protected in future deals, but the city…
A recent Wichita Eagle editorial starts with this: "Seven years into a project that was supposed to give Wichita a grand gathering place full of shops, restaurants and night spots as well as offices and condos, some City Council members and citizens remain skeptical at best about WaterWalk's ability to deliver on its big promises. ... True, the skepticism to date is richly deserved." The editorial goes on to report that public investment in this project has risen to $41 million. I don't know if this figure includes long-term land leases for $1 per year. In any case, there's little to show for this investment. Even the proposal for the redevelopment of downtown Wichita from the planning firm Goody Clancy realizes that WaterWalk is a failure: Indeed, Water Walk might…
The Wichita city council has been busy with economic development items, and more are upcoming. At the November 25 meeting of the Wichita City Council, on the consent agenda, the council passed these items. Approved a sublease in a warehouse. This action was necessary as the incentivized warehouse pays no property taxes due to a subsidy program. Given tax costs and industrial building rents, this policy gives these incentivized buildings a cost advantage of about 20 to 25 percent over competitors. That’s very high, and makes it difficult for existing buildings to compete. This lease is for 40,500 square feet for annual rent of $196,425.00, which is $4.85 per square foot. Competing warehouse space might be able to charge rent of $4.25 plus property tax of about $1.00, for a…