Thank you to John Todd for this excellent article.
Resurrecting Urban Renewal in Wichita?
By John Todd
On August 22, 2006, the City of Wichita hosted a Visioneering Committee “Public Forum on Community Revitalization” featuring Mr. Richard Baron, Chairman and CEO of McCormack Baron Salazar (MBS) of St. Louis, Missouri in the Sudermann Commons Room at the Wichita State University Hughes Metropolitan Complex. An August 14, 2006 letter from City Manager George Kolb explains, “This forum is part of the City’s commitment to and participation in a prisoner reentry initiative to help transform not only the lives of returning ex-offenders, but also to transform the communities/neighborhoods into which they will return.”
Mr. Baron’s PowerPoint presentation had little to do with “prisoner reentry” into communities/neighborhoods, but rather the “evolution” of public housing from the failed government housing projects of the past in larger cities like St. Louis, Pittsburgh, and Los Angeles into the new “public-private” partnership housing projects that rely almost exclusively on loans/grants from local, state, and the federal government as well as national and local foundation support.
Council Members Carl Brewer and Sharon Fearey toured several of Mr. Baron’s MBS developments in St. Louis, were sold on what he was doing, so they invited him to Wichita for the tonight’s presentation.
Mr. Baron’s presentation explained how his company, working with government, and government money, was able to raze and rehabilitate failed government housing projects of the past that usually included city owned land and additional assembled “tax foreclosure” properties into a “mixed-income” MBS rental housing apartment units project that always included a public neighborhood K through 8 elementary school, a common swimming pool, park area, and a sprinkling of privately owned housing units. Mr. Baron indicated that his company transformed failed gang, drug, and crime infested public housing projects occupied by people with average annual income of $6,000 to “mixed-income” housing units with incomes ranging from around 35% under $10,000, with another estimated 35% from $10,000 to $30,000 and the balance above those numbers with around 1% over $100,000 per year. His company collected market rents through HUD’s Section 8 rental subsidy program. In response to a question, he said that about 40% of the total rents collected from the project came from the Section 8 subsidy. Mr. Baron indicated that most of his projects were on tracts of around 40 acres.
The public forum was held from 6-8 p.m. in Sudermann Commons Room was attended by I would estimate over 100 people including, Mayor Carlos Mayans, City Council Members, Carl Brewer, Sharon Fearey, and Bob Martz, County Commissioners Tim Norton and David Unruh, City Manager George Kolb, County Manager Bill Buchannan, a couple of state legislators along with heavy attendance from government housing staff members along with staff members from several governmental agencies and members of several Wichita Neighborhood organizations. There appeared to be widespread crowd enthusiasm and support for Mr. Baron’s presentation. However, I regrettably have to say that I think those people more closely associated with government and local neighborhood associations failed to see through Mr. Baron’s super smooth “sales” presentation. He was given over an hour of time to tout his company’s success in assembling this “new” type of “public-private” housing project that involved massive amounts of taxpayer subsidy with the implication that the key to the success of these projects was his company’s ownership and management of the projects. During questioning he did finally admit that government played a key role in the condemnation and taking of private property for his projects through their eminent domain powers.
Following Mr. Baron’s presentation, City Manager George Kolb spoke glowingly and enthusiastically to the group about the City’s plans to revitalize the Beat 44 neighborhood in northeast Wichita. At this point, Mr. Kolb failed to mention a private partner in his vision for Beat 44 revitalization, but rather a city-run project. No mention as to whether the project needed at least 40 acres to succeed, and how many houses would be razed for the cities project. Mr. Kolb indicated that the Beat 44 project would be a “model” for other city housing revitalization projects. Mr. Kolb did hint of “public takings” if needed to clean up the area, and he admitted to me after the meeting that he was a strong supporter of the City’s ability to use of its eminent domain power in those takings.
I find it interesting to note that The Wichita Eagle has already started their support for the City’s neighborhood revitalization program with their recent front-page “blight” story. Earlier this year they printed an opinion letter from City Manager Kolb imploring the legislature to “either defeat the proposed (eminent domain) legislation or find a compromise that honors the tradition of eminent domain.” In that same April 9, 2006 newspaper, the editorial board agreed with the City Manager, “…it is important for the city to preserve its condemnation authority, which could be threatened by legislative efforts to curtail the use of eminent domain.” Since Mr. Kolb and the editorial staff have so little regard for private property protection, I wonder if the newspaper would have any problem with a city ordinance that would from time to time limit the Eagle’s freedom of the press in cases where a reporter was writing unfavorable articles about the City of Wichita that were having a “detrimental” impact on the collective “economic well being” of this community. Surely, the collective health of this community outweighs one individual reporter’s freedom to write anything in the newspaper that is not in the community’s best interest. This argument sounds like the same rational the newspaper uses to justify the taking of private property from an individual for the collective good of the community. Perhaps Mr. Kolb can convince the City Council to pass such an ordinance with the understanding that we can “trust” the city to use its power to curb the free press sparingly and city officials will always exercise “good judgment” in their use of this power. The Kansas League of Municipalities used this same “trust” argument before a legislative committee last spring in their efforts to stop the legislature from passing needed private property protection through meaningful eminent domain reform.
In deference to Mr. Baron’s approach to the new public housing projects his company is involved in, the key to his company’s financial success appears to me to be their ability to gather “public” money and then apply “private” ownership and management skills with an interest in their companies bottom line “profit.” Judging from the PowerPoint presentation, his company appears to be applying sound business skills that are necessary for a project to be financially successful. I hear that our City Manager Mr. Kolb is working to form a “Housing Authority” with limited supervision by the City Council. Kolb will be the leader of the group that owns and manages the new housing development that is being proposed in the Beat 44 neighborhood. The lack of the “profit” motive with the inherent lack personal financial “risks” makes me suspect of the ability of the new “Housing Authority” to be successful in their so-called housing revitalization. This proposal resurrects the failed urban renewal policies of the 1950’s and 1960’s.
There are several questions that I have been unable to obtain answers for after several attempts in calling Mr. Baron’s office. How are the housing projects titled? Private company? Public entity? Public-private partnership ownership entity? Non-profit entity? And, does the project pay property taxes? Have TIF’s (Tax increment financing) been used?