One of the problems with this action is that the renovation of the hotel is on hold, according to recent reporting. The reason given by the hotel’s owners, Drury Southwest Inc., is a problem with tax credits issued by the State of Kansas.
These tax credits, which are in effect a free grant of money to the hotel’s owner that does not need to be repaid, could potentially be worth 25% of the renovation project’s budget of $19 million. That’s up to $4,750,000 that the taxpayers of the state would be giving to the hotel owners.
This year the Kansas legislature realized that these tax credits are costly to the state, and facing a very tight budget, it placed a cap on the amount of tax credits that could be given.
By all accounts, the legislature will be facing an even tougher situation in January when it returns to the statehouse for its 2009 session. With everyone scrambling to find cost savings (and new sources of revenue), the tax credits for historic renovation could face an uncertain future.
How does the uncertainty surrounding the tax credits affect the plans for the Broadview’s renovation? I don’t know. A telephone call and email message to Drury Southwest Inc. seeking an update on its plans was not returned.
In his remarks after the unanimous vote passing the improvements, Mayor Carl Brewer thanked representatives from Drury for attending the meeting. He noted the budget challenges at the state level, and pledged that the city will continue to work with them on the tax credits. He said he appreciates the work they’re doing and thanked them for their commitment to the city. The hotel is important to the city, he said, as commitments have already been made to lease rooms in the Broadview.
Because of the uncertainty surrounding the future plans for the Broadview Hotel’s renovation, the city should have delayed these riverbank improvements.
A problem is the shaky economics surrounding this hotel. Besides the tax credits, the hotel received a 10-year exemption from paying property taxes and a sweetheart deal on a parking garage across the street. It’s little wonder representatives from Drury traveled to Wichita for the council meeting. They have a lot of taxpayer subsidies to protect.
If we want a thriving and vibrant downtown Wichita — including a convention hotel that can be relied on — we need to rely on something more than massive taxpayer subsidies and the mayor’s appreciation to those who receive them.