New $23 million downtown development has office, retail and residential
DECEMBER 15, 2017 05:00 AM
The long-vacant Spaghetti Works building downtown is the starting point for a new development that city leaders and others see as a potential catalyst in a key area between Union Station and Intrust Bank Arena.
Wichita-based TGC Development Group, Landmark Commercial Real Estate and Kansas City, Mo.-based Sunflower Development Group have plans for a $23 million development in the 600 block along East Douglas next to Naftzger Memorial Park. The plans include converting the 1894 Spaghetti Works building into 41 apartments and, on a parking lot in front of it, building a 60,000-square-foot Class A office and retail complex.
“We saw the Spaghetti Works as the iconic piece that everybody will remember,” said TGC principal Nick Esterline. “But we saw that parking lot as … a great opportunity to fill in downtown and connect east of the tracks and all the excitement there to the west of the tracks.”
On Tuesday, the Wichita City Council will consider a development agreement in which the developers must do a first phase within 18 months of the agreement that includes the apartment conversion and the first 37,000 square feet of the new commercial building along Douglas. There will be parking both under and around the building.
The next phase of 25,000 square feet of commercial on the back side of that building must be done within 60 months.
The city will use $1.5 million in TIF money generated from the development to make improvements to the park. The park is included in a tax-increment financing district that was created previously to help with street and right-of-way improvements around the arena.
“We didn’t want to invest a large amount of money in the Spaghetti Works building unless the park was going to be improved,” said Brad Saville, Landmark president and CEO.
“Their front door is going to have this tremendous spruce-up of this renovated park,” said Scot Rigby, the city’s assistant manager and lead for economic development.
The city held what Rigby calls “robust” public discussions of what to do with the park this summer. Though there wasn’t a lot of agreement on what should be done – and there still isn’t, but there will be more discussions – he said everyone agreed the park needs enhancing.
“It’s a win-win for everybody … and then it’s a shot in the arm for downtown,” he said.
The developers also seek a community improvement district that would put an extra 2 percent sales tax on retail and restaurants at its site that would be reinvested into the development.
Rigby said 10 percent of those CID proceeds would go to the city for ongoing park maintenance or street improvements. Over the 22-year CID, that’s estimated to be more than $300,000 for the city.
If the council votes to establish a CID, it’s a two-step process that will have a public hearing in January.
Rigby said the construction of new commercial space “is really quite unique for downtown Wichita.”
“It takes a tired parking lot … and puts it into use.”
Saville said the timing of new commercial makes sense.
“We’ve had a heck of a run on residential in downtown the last three to five years,” he said. “It does seem logical that it’s time for some commercial to follow.”
Esterline said redeveloping old buildings is good, but he said downtown needs new Class A – or top of the line – development as well.
“True urban centers that are vibrant and exciting have both components – not just let’s clean up the old but let’s add to it, let’s build upon it, let’s create a wave for the future in addition to preserving the history of it.”
Wichita Downtown Development executive vice president Jason Gregory said the development accomplishes things that were stipulated for the site when the city created a 15-year master plan for downtown growth in 2010.
“It’s a very key location in downtown, being a strong connector potentially between the arena and the successful Old Town entertainment district,” Gregory said.
He said it’s about “trying to have that whole corridor essentially walkable and really well connected, and a lot of that means getting rid of the gaps, and that’s a big gap as you come under the underpass from a walking standpoint.”
Saville said “that’s going to be part of the excitement for the city, is just seeing that site that connects the arena and Old Town that’s been sitting here for 14 years.”
He said park improvements could help stabilize other developments in the area, such as Eaton Place, which has had a hard time maintaining a tenant for a large key corner of its building across from the park.
Various pockets of downtown retail have struggled in areas by themselves.
“That’s why Old Town’s successful,” Gregory said. “Because you have enough critical mass of retail for those individuals to survive.”
What’s happening with this project is what a lot of people assumed would happen immediately after the arena was built in 2010 .
“It wasn’t realistic expectations,” Gregory said.
“A lot of it comes back to just critical mass,” he said. “The arena acts as a catalyst, but the arena can’t sustain a restaurant. It’s only open 88 nights a year, you know? What do you do the other 200-some days a year?”
He said, “Projects like this I think are stepping stones to really start to … see some more of that infill around that asset.”
Also, Gregory said the original master plan “really talked about the need for that development to activate the civic asset in the park.”
“The existing design of the park isn’t necessarily conducive for development to open up onto it to help program it,” Gregory said.
“Our whole policy for downtown investments from the public sector’s standpoint is that their investments would be catalytic or spur the private sector,” he said. “But for those investments, they’re not going to be moving forward with a project like this. They probably would move forward with a different project, but not one of this magnitude.”
Esterline said construction will start early in the new year, and the first phase of the Spaghetti Works conversion and the front of the new complex will take about 12 to 13 months. The second phase on the south-side of the building will take another 12 months.
Hutton Construction is the contractor, and Shelden Architecture is the architect for the project.
There will be news coming soon of a 28,000-square-foot anchor tenant along Douglas. That tenant will have rooftop amenities on the corner of the building. There will be rooftop amenities on the second phase of the building for either a tenant or all the occupants in the building.
There’s also a 10,000-square-foot building behind the Spaghetti Works building that will be renovated at some point.
“That’s a pretty desirable location, too,” Saville said, noting its proximity to the arena.
The entire project is desirable, Gregory said.
“This paves the way for us to break through another glass ceiling, much like we did with residential when we started the master plan process, and so it’s really exciting – I mean, from somebody who’s working on downtown every day – to see this group come forth with a vision like this that not only meets but in some cases exceeds the vision that was laid out in that plan,” he said.
“It takes us to another level.”
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