City Considering Two Tax Districts To Support Development Along River

Apr 10, 2017

There’s a lot of development going on west of the Arkansas River.

There’s the Advanced Learning Library taking shape at the corner of 2nd and McLean. South of that, a multi-million dollar mixed-use building is planned at the Delano Catalyst Site, and across the street sits the wood framing of the future River Vista development.

There’s millions of dollars of development going in here -- and the city wants to capitalize on it.

“For a long time, there has been interest in activating the west side of the river and tying the two sides of the river together," says Vice Mayor Janet Miller, whose 6th District encompasses part of Delano.

A map of the expanded STAR bond district.
Credit City of Wichita

The city is looking at two separate financing tools—STAR bonds and Tax Increment Financing, or TIF—to finance improvements along the west bank and in the historic Delano neighborhood.

“Both of these projects take increase in tax revenues and use the increased tax revenues to finance the improvements," Miller says. "So we are not using existing tax revenues and we are not increasing either sales tax or a property tax.”

STAR, or Sales Tax Revenue, bonds and TIF work in similar ways: The city issues bonds to pay for improvements to an area, and counts on the usual fact that additional sales tax revenue and property tax revenue will come in to pay those bonds back within 20 years. STAR and TIF have already been used to finance improvements in the East Bank Redevelopment District.

Right now, there’s about $126 million in investments—like the library and the catalyst site—going in west of the river.

Major renovations or even a replacement is planned for Lawrence Dumont Stadium in Delano.
Credit Nadya Faulx / KMUW/File photo

To complement those developments, assistant city manager Scott Rigby says the city is planning on issuing about $40 million in STAR bonds. They’ll pay for a few major projects, with Lawrence Dumont Stadium as the focal point.

“The first one would be the renovation or replacement for Lawrence Dumont stadium," Rigby says. "The second would be a sports-related museum tied into the stadium. The third project would be a pedestrian bridge that would connect the Lawrence Dumont stadium area and those amenities around that to the Century II performing arts library block. The last component is making additional waterfront improvement similar to what you see along the east bank of the Arkansas River."

The city will also use TIF to finance about $20 million in improvements to public spaces, including additional renovations to Lawrence Dumont, improvements to the Delano multi-use path, and parking and street improvements in the district.

The proposed Tax Increment Financing district.
Credit City of Wichita

Wichita already got approval from the state Commerce Department to expand the existing STAR bond district over to the west bank. The project area stretches from Kellogg, along McLean Boulevard up to First Street. Wichita City Council will have a hearing Tuesday to discuss establishing the TIF district in roughly the same area. It would also have to be approved by Sedgwick County and USD 259.

TIF has worked out well for Wichita in the past—the east bank district being one example. But it’s not always the case: A TIF district at Hillside and Douglas is projected to come up short, according to a 2011 report.

Still, Miller says STAR bonds and TIF are good financing options.

“They’re really very good for the economy and we’re not sacrificing any other plans we have right now," she says. "You know, the big picture is, it’s new development that will help spur the economy in Wichita.”

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