Wichita council declines proposed $400,000 settlement in long-running Kenmore TIF dispute

The Wichita City Council on May 20 declined to approve a mediated settlement that would have resolved the city’s lawsuit against developers over unpaid payments tied to a Tax Increment Financing (TIF) loan for the Kenmore Shopping District. The motion to accept the mediation recommendation failed on the floor of the council.

The dispute dates to a development agreement first recorded in early 2009 and an amended arrangement in 2011 tied to the sale of property at 13th and Oliver. The city’s lawsuit, filed in July 2023, seeks the remainder of a multi‑million‑dollar obligation the city says the developers failed to pay. According to city staff, about $708,000 was received previously; the city currently lists roughly $1,881,003.94 as outstanding.

Why it matters: Council members and multiple public speakers said the matter raises questions about oversight of past economic‑development deals and the city’s current policies for protecting taxpayer dollars. Supporters of the settlement argued that litigation could yield nothing and that the mediated offer—$400,000—would at least recover funds for taxpayers. Opponents said accepting a reduced payment would fail to hold developers accountable and send the wrong message to future applicants.

City staff and the city attorney outlined the timeline in public discussion. City Attorney Jennifer Magaña told council the case was litigated and placed into nonbinding mediation, and the $400,000 figure is the mediator’s recommendation developed through that process. Assistant City Manager Troy Anderson and the city manager described policy changes the city has adopted since 2009 to require stronger credit enhancements on development deals, including letters of credit and personal guarantees.

Public comment at the council meeting featured several speakers who urged the council not to accept the settlement. Celeste Rosette, a former FDIC bank examiner, criticized the original deal’s handling and urged stronger transparency and cost‑benefit analysis for development incentives. Resident Lawanda DeShazer and others said ordinary residents face strict collection for small debts and that the city should pursue full recovery. Other speakers, including some council members who supported the mediated amount, argued the city’s case may be legally weak because key promises were oral and that litigation expenses and uncertain outcomes weighed in favor of the mediated payment.

Council action and next steps: A motion to approve the mediated settlement was put to a vote and failed. The lawsuit remains pending; staff said the case is set for trial in district court if the parties do not reach another agreement. City staff also said they will continue to improve economic‑development policies to reduce future risk to taxpayers.

Ending: Several council members asked staff to return with policy options for whether entities currently in litigation with the city should be eligible for future city contracts or incentives. City staff said they will consider policy proposals and return to the council for additional discussion.