Uncertainty over Broadview’s future doesn’t bother Wichita


Yesterday the Wichita City Council approved plans for riverbank improvements that would benefit the Broadview Hotel in downtown Wichita. The cost is $2,200,000.

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.


10 responses to “Uncertainty over Broadview’s future doesn’t bother Wichita”

  1. Pat

    The above mischaracterizes the nature of tax credits. Tax credits are not a “grant of free money”. That said, I personally don’t feel like the riverbank improvements are or should be dependent upon what happens with the Broadview.

  2. BradleyL.

    It looks like the Broadveiws owners have alot at stake here.
    Whatever happened to the old fashioned way of renovating?
    YOU GO TO THE BANK! And you show your Books, that should be showing your P & L, for your last fiscal year accounting, and you along with some of your saved profits, BORROW the money on your own fiscal merits, for your renovations. AND NOT GO TO THE CITY COUNCEL TO BEG FOR STATE FUNDS, aka, ( KANSAS STATE TAXPAYER MONEY ). Albeit, with that said, I would like to point out a couple of things. a. The Drury Hotel Suites Chain, “in most major U.S. city’s”, and touting (4) four, J.D. Powers Awards, on the mantle, IS a true American success story!. You can read about it on their home page. b. I do recall a similar project that took place about 14-15 years ago that expanded the Century II Convention Center which was built with a whole pot load of Taxpayer Money, designed to be the best Convention Center in Wichita, to bring in more groups, pga, pba, you know what I’m talking about. Don’t you? The Hyatt Regency, of course…since it’s completion, it’s been bought and sold at least 3 times that I remember, and at one point, the buzz was whether it would be closed permanently. Well, it didn’t, and it’s still poking along but with no real huge success, employee turnover is over 40% at any given time, and hardly ever makes 75% occupancy.. “providing the rooms aren’t comped to employees.But yet, we’re still helping this little struggling convention center along. My opinion?
    It seems to me, the same scenerio has taken place here. A big Corp. like Drury, like walmart, like target, like Boeing, comes along with a desire to make more profit, they just don’t want to open up their own coffers and pay for, when it’s become so EASY to get taxpayers to pay for it instead, and the first thing they say, “we’re going to bring jobs to Wichita, but We want the TaxPayer to give us x amount or the Deal Is Off!
    We’ve been hoodwinked and snookered before, and once again I’m afraid, It’s business as usual in Wichita, KS. U.S.A.


    Isn’t amazing that the City can pour $2,000,000 into riverbank
    improvements plus much more maintaining them for the next 20 years. But at the same Council meeting has to cut back funding by $2,000,000 for road repair (OH!!! what a coincidence). God help you if you have a street that needs repaired unless of course you live downtown. It’s no wonder we don’t have any money for roads, in the past couple of years they have redone 1st street from Washington to the RR 3 times.

  4. Anonymous

    Pat, I’d be interested in learning how the tax credits aren’t the same as a free gift of money.

  5. Joe Williams

    I’m one that doesn’t believe that historic tax credits and even historic preservation societies or councils do any good at all. I think they hamper a lot of progress as I see no need in keeping any old building around just because it was built a long time ago.

    That being said. The River bank improvements between Douglass and 1st Street is actually funded by STAR bonds, for which the city already had the money in the bank from the left over Star Bond funds issued back for WaterWalk and the Keeper of the Plains. The bond money will be paid back by the sales tax and transient tax in that area. Although I dislike it when government borrows any money. *cough cough* Britt Brown renovations vs. IBA *cough cough*

    They are doing this in part for that stretch of river bank to comply with ADA.

  6. Ruben

    It will be interesting to see Mayor Brewer in Topeka begging the Sedgwick County Legislators to support the preservation tax credit. Brewer is a liberal Democrat and his tax and spend model will not set well with most of our local delegation conservative Republican legislators.

  7. Anonymous

    Tax credits may technically be a grant of free money, because it is less revenue that the state will collect given the credit. However, it tax credits operate in an entirely different manner than grants, wherein grants offer the capital for development in concert, or simultaneously, as the development. Thus, a developer who receives a grant can draw down on the grant allocation and receive a reimbursement almost immediately after the expenditure is made, whereas a tax credit takes a year to recover, depending on when the expenditure is made within the tax year. It’s the time-value of money principle, and tax credits are not as attractive as grants in economic development projects.

  8. Anonymous

    Your analysis, Anonymous, would be persuasive except for these things:

    First, if I knew I was getting a tax credit, I’d immediately adjust my tax payments *right now* to take into account the tax relief. Corporations have to pay income tax all year long, not just at filing time.

    Then, the tax credits can be transferred (sold) to someone else. You’d get paid right away then. Sure, you might not get quite as much for them as their face value, but what the heck.

  9. […] Both Fluhr and Davis presented the case of the Broadview Hotel in downtown Wichita. That project, already receiving various forms of subsidy from the City of Wichita, requires historic tax credits for its financial viability, according to the developers and the city. (Uncertainty over Broadview’s future doesn’t bother Wichita) […]

  10. Not only tax but also IFT matters in this scenario

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