WICHITA, Kansas – Union Station is coming back to life. It’s been sitting empty since 2007, but that’s about to change.
“This is a great thing for the city of Wichita,” says city council member Pete Meitzner. “It’s going to be done quicker and probably better than if the city did it.”
The private firm, Occidental Management of Wichita, is the group doing the renovations to bring in shops and restaurants and small businesses to Union Station over the next two and a half years.
The group is also getting TIF monies, or tax increment financing.
“This is a trend you are seeing in development,” says Jeremy Hill of Wichita State University. “There is a lot of risk, but the risk then just gets born on the developer.”
Hill explains TIF financing amounts to a tax break of sorts. The developer does not get money directly from the city. Instead, Occidental Management will, as the value of the property increases, get to write off part of that value, as their tax payment to the city.
KSN asked the developer if TIF financing was necessary to get the project off the ground.
“In today’s market downtown, that would have been very difficult to do to be able to do a building under these (financial) conditions,” says Gary Oborny with Occidental Management. “We’re probably still about five to ten years away from the downtown market being at a level that it could support market based real estate.”
KSN also asked city leaders if tax breaks down the road are a good idea.
“Clearly Old Town has become the center of its own economic development,” says Meitzner. “Old Town would still look ‘old’ and not have all of the stuff that’s gone on around it without the development.”
And Meitzner says the development did benefit from tax breaks known as TIF.