Yesterday the Wichita Eagle printed a letter from citizen activist John Todd concerning the proposal for City of Wichita subsidy for a hotel in the downtown WaterWalk development. This is the unabridged version of the letter.
In 2002 elected city officials leased a prime 20-acre parcel of city owned downtown land known as the East Bank to the WaterWalk developers for $1 per year for 99 years. The lease contained a subordination clause that allowed the developers to place new first mortgage financing on improvements (buildings) they made to the property, thus leaving the publicly owned land in second position to new first mortgage financing. This land was therefore subject to foreclosure action and loss in the event the developers defaulted.
The Wichita Eagle reported that WaterWalk developers have received an estimated $41 million of taxpayer-subsidized stimulus money since the inception of this public/private venture. In addition to essentially free land, government officials have placed the project in a tax increment financing district and have utilized the STAR bond programs, both of which transfer tax revenues away from the public treasury and into the hands of the private developers. The Eagle also reported that WaterWalk developer Jack DeBoer was buying out his other WaterWalk venture partners and said there would be no need for additional government subsidy
Just days prior to the January 12th City Council meeting the public learns that a new proposed WaterWalk hotel developer will ask the Council for a letter of intent approval seeking millions of dollars more of public subsidized funds.
I feel certain that the letter of intent would have been unanimously approved had not several concerned citizens been there asking for a public hearing process that would allow citizens the opportunity to examine this project. (A video of that meeting can be seen at the city’s website by clicking on Wichita City Council meeting, January 12, 2010.)
Is the WaterWalk hotel developer the only hotel bidder for this public/private partnership? Will our City Council issue a RFP (Request for Proposals) from other developers? Perhaps there is another private developer who will build the hotel with less public stimulus money or none. With massive public subsidy already given, why hasn’t hotelier DeBoer built a hotel on the property? He has stated he has no need for additional public money.
How much money will, if any, is Mr. DeBoer receiving from the hotel developer for transferring the $1 per year for 99 year least on the .8-acre parcel of WaterWalk land? Who owns the parking garage next to the proposed hotel site, and how much money will the hotel developer be paying to use 100 parking spaces?
As stewards of the public trust in the WaterWalk public/private partnership, our Mayor and City Council have an obligation to the taxpayers to hold a meaningful public forum to discuss the public’s interests in this public/private project. It needs to be held in a public forum similar to those held by Sedgwick County Commissioners.
Local officials have locked us into an expensive public/private partnership with massive taxpayer provided benefits accruing to the private developer. Isn’t it time for the interests of the “public” portion of this partnership to be protected? Don’t Wichitans deserve the opportunity to discuss this project before additional public money is promised once again to developers?
Am wondering if the blood splatter pattern (from the hatchet job) would lead straight to 825 E, Douglas?
“Local officials have locked us into an expensive public/private partnership with massive taxpayer provided benefits accruing to the private developer. ”
Many would argue that there are many benefits that are accruing to the public as well.
“Isn’t it time for the interests of the “public” portion of this partnership to be protected?”
I’d say that the interests of the public are being protected. Is it in the best interest of the public to now walk away from all the previous investments? This aspect continues to be ignored.
“Don’t Wichitans deserve the opportunity to discuss this project before additional public money is promised once again to developers?”
Always; however recognize that the “public money” is being generated by the developer with little to no impact to the existing tax base.