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 with market value of $33,803,000. In this plan the market value is greater than investment, which seems like a good thing.
In the second revision presented to the council this week, here are the values: Total investment is $46,491,728, while the market value is $41,695,000. Now the market value is less than investment. In fact, it is ten percent less than the amount invested.
I asked how are these market values determined, and is it wise to have investment that is so much greater than market value? In the video below, I think we can agree that a satisfactory answer was not provided.
In particular, the city’s economic development chief Allen Bell said that he had asked the applicants for updated information on these figures, but had not received it. This was revealed at the time the council was being asked to make an investment of some ten million dollars of taxpayer funds.
The fact that there was confusion, and data not made available to the city, at the time the council is being asked to make a decision casts quite a bit of doubt on the entire decision-making process.
A second question I asked had to do with the fact that the TIF district is quite a bit larger than the specific buildings that are the subject of the TIF financing request, and not all the property in the district is owned by the applicants. I asked that as property values — and therefore tax payments — in the other property in the district rises, does its increased valuation go towards paying off the TIF bonds? The answer from Bell was no.
A second question was what if these other property owners in the TIF district wanted to obtain TIF financing of their own. Does the fact that their property is already in a TIF district prevent them from receiving TIF financing? The answer from Bell was no.
This is just one of numerous examples where the City Council approves projects without the full economic information necessary to make informed decisions. I think they are flying on the “downtown redevelopment” mantra and many important economic repercussions are cast aside. This is not the Council’s money. It is the people’s money. I am taken aback with how much rubber stamping goes on re taxpayer subsidized, private projects. And I am seriously concerned that these council members do not understand economic development.
I was particularly disappointed in the rudeness shown by the mayor when a speaker to the Council was asking for a clarification. The Mayor assumed the speaker was against the project and immediately lit into him with “You People”. When the young man asked the mayor if the mayor knew whether or not he was for or against the project the mayor snapped, ‘
We are not in a court of law and I (the Mayor) am talking”. I assume the young man was an attorney.
The disdain with which this Council addresses anyone that does not support “their plans” is embarrassing and certainly not conducive to the openess of city government we citizens deserve.
Most of the Council members do not read their agenda packets. They have a meeting with the City Manager and sometimes staff either the Friday or Monday before the meeting to receive a briefing. These meetings are open to the media and the public.
Our Mayor is not well educated (high school graduate) and doesn’t understand most of the issues, consequently, rules by intimidation when questioned on the issues.
Mayor Brewer was not picking on the young man. I know Mayor Brewer and he has always treated people that disagree with him with disdain.
[…] expansion of the Exchange Place TIF and incentive package you are considering today that benefits Real Development, a group of downtown developers commonly known by many people as the “Minnesota […]
I urge the City Council members to reject any proposal that funds the TIF for Exchange Place. I don’t think this proposal is in the best interests of the people of Wichita, for many reasons.
Your consideration is greatly appreciated.
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