Downtown advocates hope database will untangle complex land leaseholds
Wichita Business Journal by John Stearns, Reporter
A title company, commercial real estate representatives and a downtown development group hope to make it easier for potential development deals to happen downtown.
Their plan: Build a database of which properties downtown have ground leases. Later, the parties will add information that includes who holds the leases, their terms and perhaps contact information for leaseholders.
The goal is to simplify property transactions in the downtown core, where land is often owned separately from buildings and the ownership dispersed among dozens or even hundreds of people.
“It’s been a hindrance to try and get things done in the central business district,” saysJerry Gray, vice president and general manager of the commercial division at J.P. Weigand & Sons Inc. He says leaseholds downtown, the oldest part of the city, have passed through many generations, causing them to be “fractionalized significantly.”
“What may have started out as one owner may be 100 now,” he says.
As a result, when an investor or developer seeks control of land, it’s hard to figure out where to start, Gray says. That’s deterred some past projects, he adds.
The database would allow parties to get vital information easily and quickly.
“Maybe this will stimulate more transactions, thus stimulate new development,” says Brad Saville, CEO of Landmark Commercial Real Estate Inc. and president of the Kansas Chapter of the Certified Commercial Investment Member Institute.
Kansas CCIM and the Wichita Downtown Development Corp. have contributed $2,500 each to the cataloging effort, and Security 1st Title is providing research at cost. The funding from CCIM and WDDC will cover Security 1st’s research costs.
The database, free on WDDC’s website, will address a need identified years ago. Wichita’s downtown master plan lists addressing “cumbersome ground leases” as a way to encourage development.
WDDC President and CEO Jeff Fluhr says the information will be valuable to developers whose projects sometimes stall as they work through complex ground lease issues.
With the database, developers can know upfront what they’ll have to deal with, making “many of the unknowns known,” he says.
Old Town developer Dave Burk agrees the program will be helpful.
“I think it’s a great tool for developers coming into our downtown,” he says.