In Sunday’s Wichita Eagle, Wichita Mayor Carl Brewer penned a piece that states his belief in the importance of downtown and prepares the people of Wichita for the start of a prescriptive planning process, with accompanying subsidy to politically-favored developers willing to fulfill the plan.
The mayor used the word “vibrant” twice. Asking citizens a question like “Would you like to have a vibrant downtown?” is meaningless. Who doesn’t? It’s only when the question is accompanied by context that citizens can start to understand how they should answer.
For example, in the mayor’s article, he mentions the use of special assessment financing that funded suburban infrastructure, and that this is not sufficient for downtown needs. This statement reveals a misunderstanding by the mayor about the various forms of financing that might be used to help development.
Special assessment financing means that the city spends money to build something, like the new street to serve a site where someone wants to build a house or a shopping center. The cost of this street, plus interest, is added to the property’s tax bill over a period of years. The property owner doesn’t get anything for free.
But in the forms of financing that the mayor and city hall planners favor for downtown, developers do get something for free. Under tax increment financing (TIF), developers get to use their property taxes to pay for the same infrastructure that everyone else has to pay for. That’s because in TIF, the increment in property taxes are used to pay off bonds that were issued for the exclusive benefit of a development. Or, as in the case with a new form of TIF called pay-as-you-go, the increment in property taxes are simply given back to the developer. (Which leads to the question: why even pay at all?)
Some deny that TIF directly enriches the developer. They’ll make arguments such as “it’s only used for infrastructure and eligible expenses” or “it’s not lending, it’s bonding” or “it wouldn’t happen but for TIF” or the biggest lie: TIF doesn’t have any cost. But despite these claims, TIF has a cost, and it does directly enrich the developer. That’s its entire purpose; its reason for being. If TIF didn’t enrich the developer, how does it change something that is claimed to be not economically feasible into something that is?
While city leaders say that public participation in the revitalization of downtown is to be limited, we should be cautious and skeptical. Goody Clancy planners have said that public participation will be limited to TIF. This is bad in its own right and should be opposed on its merits.
We need to be skeptical of the mayor and downtown planners because there isn’t enough TIF money available to do what they want to do. I fully expect a citywide sales tax, probably in the amount of one cent per dollar, to be proposed for the benefit of downtown subsidized developers. City leaders speak fondly of such a tax that Oklahoma City has used for many years.
City leaders have already shown themselves to be not averse to imposing additional sales taxes in Wichitans and our visitors, having granted several Community Improvement Districts the ability to charge up to an additional two cents per dollar sales tax. This means that when visitors check out of the Fairfield Inn in downtown Wichita, they’ll be faced with a sales tax rate of 9.3 percent. That’s in addition to the six percent guest tax, which in the case of this hotel is collected for the exclusive benefit of itself, rather than funding general government and tourism activities.
More community improvement districts are in the works. Wichita may soon be peppered with them.
No faith in free markets means no faith in people
The unwillingness of Wichita city leaders to let Wichitans freely decide where they live, and Wichita businesses freely decide where to locate, is a sign of lack of confidence in free markets and the people of Wichita. Because Wichitans do not choose to live and locate their business firms where politicians like Carl Brewer and Janet Miller — to name just two — and city hall bureaucrats like Wichita city manager Bob Layton and Wichita economic development director Allen Bell want them to, they deliver a slap in the face. It appears in the form of a vision backed up by planning, regulation, and the power to dish out favorable tax treatment, as outlined above.
Once formed, a vision is a powerful force. Randal O’Toole, author of The Best-Laid Plans: How Government Planning Harms Your Quality of Life, Your Pocketbook, and Your Future has written about visionaries and government planning:
The worst thing about having a vision is that it confers upon the visionary a moral absolutism: only highly prescriptive regulation can ensure that the vision overcomes an uncaring populace responding to a free market that planners do not really trust. But the more prescriptive the plan, the more likely it is that the plan will be wrong, and such errors will prove extremely costly for the city or region that tries to implement the plan.
An example of planning that many see as having gone wrong is the government planning that led to growth on the city’s fringes. An example that helped make this possible is the government’s decision to build the northeast expressway also known as K-96. Acts of government like this are claimed to have caused the demise of downtown, the very situation that planners now want to correct.
With government making “mistakes” (their claim, not mine) like this on a grand scale, why are we willing to trust that politicians and bureaucrats are making correct decisions now? Especially when you look at the campaign finance reports of most city council members and see the same names giving repeatedly to all council members, with these same names appearing repeatedly before the council asking for their subsidy. This is not a decision making process that gives citizens confidence.
It bears repeating: the existence of the downtown planning process tells Wichitans they’ve made a mistake in where they chose to buy a home or build a business. Not only will Wichitans have to pay for what they freely chose, they’re going to be asked to pay again so that those with purportedly superior vision can have their way.
This is so depressing, what the mayor and the downtown elites want to do. Hardworking Wichitans forced to pay for the dreams and desires of mostly well-to-do downtown dwellers and young people.
Why didn’t you mention Jeff Fluhr in this post? Does he live downtown? What about the mayor?
More of the same garbage with the usual half-baked “analysis” from the Libertarian right wing. For example:
“Under tax increment financing (TIF), developers get to use their property taxes to pay for the same infrastructure that everyone else has to pay for.”
First of all that sentence reads poorly. Secondly, the developer still has to pay property taxes like everyone else. The tax is ear-marked for a specific purpose. How is this any different than the city’s general budget process for collecting property taxes and spending it on dedicated items?
Secondly, in general, the special assessments in the urban fringe are paid by the end property owners. But to imply that special assessment financing isn’t an incentive to developers in new growth is naive at best.
Lastly, any discussion on the whole public incentive issue also demands a discussion of the big picture, all available choices, and all the social consequences that go with each choice. It is politically convenient that you always ignore this aspect.
Our elected city manipulators will only see the error of their ways when they’re voted out of office. There isn’t much we can do about the ones employed by the city, though, and these people have a HUGE impact. My neighbors and I saw that when an out-of-state developer proposed tax credit apartments for our neighborhood–and yes, the city council approved them, even though our neighborhood assn was squarely against them. (Carl Brewer had also told us he would vote with the neighborhood–then voted with the developer.) We watched at the various meetings as LDG (Kentucky developer) and their local representatives sat, laughed, and schmoozed with Mark Stanberry (city employee), who recommended the council approve their request. I also spoke to another city employee who told me that they take great pride in giving lower income people access to middle class neighborhoods. When it comes right down to it–for the politicians–it’s all about (1) the property tax revenue generated; (2) money funneled to localities from federal incentive programs; (3) and rewarding people with money and influence for their campaign contributions and support. For city employees, it’s all about creating their own job security. Corruption at its finest, and it’s all perfectly legal.
Do we know how much the developer paid for his new apartment complex VS. how much we paid for it? I’ve heard that the majority of the development was tax $ (Federal probably), not his.
The Mayor does not write his own articles in the Wichita Eagle. His press secretary Van Williams writes the articles for him. I have lived in Wichita most of my life but I don’t remember a Mayor as incompetent and uneducated as Mr. Brewer. He will be remembered as the Mayor who presided over the worst economic crisis in the history of Wichita and did nothing about it.
On the other hand, since virtually nothing the city does has an impact on this economic climate, then it’s probably unfair to lay that dog at the Mayor’s feet. After all, I wouldn’t want to suggest to anyone that we spend our local tax dollars trying to bring Wichita out of the world wide economic doldrums.
“I also spoke to another city employee who told me that they take great pride in giving lower income people access to middle class neighborhoods.”
Tsk, tsk. Your bigotness is showing through.
Hi, In response to “I also spoke to another city employee who told me that they take great pride in giving lower income people access to middle class neighborhoods.”
Tsk, tsk. Your bigotness is showing through.”
I was at that meeting also, and to loosely quote a minority Wichita Public Employee: “I moved out of the ghetto, and now you’re moving it back to me. Thanks”
Anonymous II seems to ignore the fact that TIFs are a way to use tax dollars to pay for parking as well as “amenities,” to improve an area. If TIFs are such a great idea, let’s make the whole city, or county, or state into one big TIF district….except then who would pay for police, fire, city hall clerks, eco-devo czars, pr spin meisters, and the assorted rest of the city hall employees.
Their is nothing bigoted about wanting to protect my husband’s and my investment in our home and our neighborhood. We EARNED the money to buy our home by working hard and being frugal. You liberals have been playing this game with us for years, and I will no longer back down when you make such accusations. Multifamily, whether tax credit or regular apartments means more crime; and if, over time, the apt owner decides to sell those apts. or lessen their commitment to being a good neighbor, the value of our property could fall.
And, no Mike, I have no idea how much money of their own the developer had to invest. I do know that the tax credit money was spent to make the exterior of these apts look better. In fact, if you drive by the place, you would almost guess they are luxury apts. The problem will be the likelihood of increased crime, and the impact on our neighborhood in years to come. We built our house in 1987 and will probably be here until we head to assisted living. :-)
For those who are interested, these types of apts are going in all over town. I’m certain the economy has slowed these developers down, though. The land they built on was already zoned for multifamily and was owned by Tom Devlin and Craig Barton. They had owned it for years, and no one would pay their price. (And if you don’t know it, regular apts are no longer cost effective… almost no one will build them anymore.) So, Tom and Craig found the perfect buyer to pay an inflated price for a piece of land they’d been sitting on for 15 or 20 years. All they had to do was get approval from the city council to make the apts tax credit .
LDG’s realtor, Nick Esterline, followed all the rules, even though what he did was unethical–in my opinion. Everything went before our DAB prior to property owners being notified… all perfectly legal. At that point, we scrambled to create a neighborhood assn, which didn’t really matter in the end, because the city council wouldn’t listen to us anyway. Oh, and if you live in the county commission district that Jim Skelton is running in, he voted FOR these apts basically calling us all elitists.
If you’re reading, Mayor Brewer: If you run for mayor again, I will be actively campaigning against you. I will tell everyone I know that you lie to get votes. (This all began when Brewer was running for mayor. He told several of my neighbors at a forum that he would vote with the neighborhood.) At the city council meeting where he voted with the developer, he told us he was doing so to protect us. I already have a father– don’t need another one.
Wasn’t this thread about TIF and downtown, not kimpo’s personal ax???? Hijacking…..
Mayor Brewer asking the citizens of Wichita if they want a vibrant downtown is like asking us how much do we want to pay for it. It’s like how much money do you want to put into fixing up an old car. At one point both reach a bottom and if you keep putting money into it, the value comes back up (maybe).
Hi, it they’d move the library, I’d never go downtown at all. I object to the city council’s push to blow money downtown while ignoring the problems that unorganized development in other areas of the city has caused.
If our mayor and then councilman had voted with his constituents I wouldn’t have a problem with him, but he voted for out of town $. I also don’t like having a large low income housing project in my neighborhood, but I REALLY REALLY HATE that my tax dollars funded it. I’d REALLY REALLY HATE that part even if it wasn’t in my neighborhood. This wasn’t a TIF, but it was instead a federally subsidized deal of some kind. I see no reason to use tax dollars to purchase apartment complexes for developers, you want it, you build it.
First of all, don’t think I mentioned TIFs or downtown. Second, I explained that tax credit apartments are going in all over town, so this should concern ANYONE who owns a home located near vacant ground that’s zoned multifamily. Third, Bob has the power to delete my comments if I’m hijacking his Web site. There was NOTHING about my postings that favored either Democrats or Republicans. My comments were about individuals who were elected to office in Wichita, who have no regard for their constituents’ concerns. They voted with money and power, although I’m sure they’d say they voted to help the poor. There is no doubt that my concerns and opinions are not necessarily shared by others. However, what I’ve written is truthful; if there’s another side to the story, they can speak as well.
“First of all, don’t think I mentioned TIFs or downtown”
No kidding. That’s the point.
“There was NOTHING about my postings that favored either Democrats or Republicans. ”
Yeah, but for your edification, please do try to stay on point. The title of this blog is:
“For downtown Wichita, Mayor Brewer has a vision”
Nothing about any tax credit housing in the ‘burbs. Just a discussion on downtown planning.
For my edification? (I’m taking out a ruler right now and smacking the backs of my hands.) Perhaps Bob can build into this Web site some kind of screening device that prohibits any comment that is not precisely on subject. Yeah, that’s a great idea… something to discourage dialogue.
I find it interesting that Bob defends special assessment financing here but has been a vocal critic of the use of the Facade Improvement Program downtown. That program is a special assessment program repaid by the property owners, just as Bob described it above. Yet in past columns, he has criticized the program and called it an incentive. Which way is it then, Bob? You simply can’t have it both ways…
Mark, I wouldn’t characterize what I wrote about special assessment financing a defense of that system. I also searched to find where I called the program an incentive, and I couldn’t find where I made such a claim.
As to the facade improvement program, I testified against it twice. In one case it was being applied to make repairs to a building, and the city had to waive two policies in order to approve it. The fact that a condo building would need repairs like this someday is entirely foreseeable, but the building didn’t have a mechanism in place to handle paying for them.
The other facade improvement program was accompanied by a grant of taxpayer money to the business. Grants like this should be opposed in all cases.