WICHITA, Kansas – On Tuesday, the Wichita City Council terminated a development agreement for a failed redevelopment project in the College Hill area.
Now, the city has to pay $400,000 in back taxes and cover their investment.
The city says they’ve changed their policies and tightened down on what they require from developers to make sure this never happens again.
Now, that property is ready and waiting for a new developer to pick up the pieces.
“I think the economic opportunity’s better now,” said Wichita Vice Mayor James Clendenin.
Just near Douglas and Hillside sit a few empty lots and a set of new brownstone homes.
In 2007, when the redevelopment project was first approved, there was a $60 million plan that included 57 brownstone homes but only a handful were ever built.
“Following the completion of those brownstones is when the recession hit and so not only was it difficult to market the building but it was also difficult to get financing to move any of the project forward,” said Mark Elder, a development analyst for the city of Wichita.
The city continued to back developer, Loveland Properties LLC but ultimately their financial backing fell through, leaving the city to cover the Tax Increment Finance or TIF incentive payments and any property taxes that are owed.
“This was pre-recession and so you know, the city played by different rules; there was a lot less checks and balances and that’s why a lot of the people that are considered naysayers have been so tough on the city when we use incentives,” Clendenin said.
Now, the city does things differently to avoid these kinds of setbacks.
“We now do what’s called a pay-as-you-go, which means the developer makes the improvements, the property value increases and then we know the TIF can be covered if something happens like a down turn in the economy, which happened on this one,” Clendenin said.
“We wanna make sure whoever comes onboard actually builds a project and ideally brings forth revenue to the city, whether its property tax, sales tax or other benefits to the area,” said Scot Rigby, the Wichita assistant city manager.
KSN reached out to Loveland Properties LLC and in an emailed response they stated, “We are deeply disappointed in not completing the project but know that the project area is now ready for an outstanding project to be developed.”