Salina Seizes an Opportunity

Manhattan’s Industrious Neighbor is Just Getting Started.

Reporting by: Lucas Shivers

There’s a cacophony on Santa Fe in downtown Salina. The entire southbound lane of this historic downtown artery lays bare in the summer heat as dozers and backhoes and heavy trucks assemble a new, pedestrian friendly design for Salina’s residents and visitors. Nearby, a lift whines as it raises sheet metal workers into the air. The percussive rattle of their impact drivers bounces from the side of the new Alley Entertainment Center. Below, deep concrete boxes have been installed in the sidewalks for trees and other streetscaping yet to be delivered. Until the greenery arrives, newly installed electric and irrigation lines dangle in the air. Colorful and shapely sculptures are spaced along the street’s edges near pocket parks, new streetlights and benches and small businesses that persist through the construction. 

Adjacent to one pocket park, plaster has been scraped from the side of an old coin shop in a shape suggestive of a door or a window to serve those who will enjoy the space. Nearby, the first bit of work has begun to transform an old Lee Jeans factory to modern loft apartments and artist spaces. Established businesses, such as Sunflower Bank, have joined in the remodelling fever and new boutiques, a salon and a downtown gym buzz with life. The street is a maze of fencing and traffic cones and orange netting and reflective vests. Heading south, sounds of hammers and power saws pour from a new Homewood Suites. The exterior is still unfinished, covered only in house wrap, but above its fifth story, a line of decorative brackets and corbels announce the structure and its vision for downtown as Salina’s hotel of choice. 

Over the rumbling of diesel engines, the scream of saws, the clanging of metal, and the shouts between workers in Spanish and English, you hear determination and resolve in downtown Salina, and it’s louder than everything else. Of the progress he’s seen thus far, Guy Walker, vice president of real estate for Blue Beacon and an investor in the Salina 2020 initiative, says, “I’m thrilled to see the organic ways that things are happening to bring more energy downtown. The intent [of Salina 2020] is working, and everyone is firing on all cylinders.”

Catalyst Project 

Salina 2020 is on track to secure over 160 million dollars in investment, with 105 million dollars from private sources, but a decade ago, the initiative seemed out of reach until work began on an unlikely catalyst project: the Fieldhouse recreation facility. “These new [downtown] developments all started with the Fieldhouse,” Walker says. “Folks started to raise funds for the public-private partnership to leverage more opportunities downtown. We were so happy to see the broad base of support with the contributors not knowing at the time if anything would happen.” For Penny Bettles, the managing director of Downtown Salina, Inc., identifying a group of local investors who could see opportunity in downtown from the start was vital. “We’re very fortunate to have folks who could send their money anywhere but we’re keeping our community’s money local. Downtown has got so much universal support.”

Building upon the long-term staples of the Salina Regional Medical Center, the historic Stiefel Theatre for the Performing Arts, the nearby Tony’s Pizza Events Center, and other downtown benchmarks, conversations about the Fieldhouse began in Salina in 2010, around the same time that Manhattan identified the need for a larger indoor recreation facility. Bettles recalls the time period with a smile. “[The Fieldhouse] was a pipe dream back then, but a group of individuals started to fundraise and visit other big recreational centers in the area. They created a proposal to move the idea forward rather quickly. The city commission agreed, and the private sector threw in more than $4.5 million to be matched by the city.” Later, in 2015, the city commission took the first step toward leveraging investment in the district by approving that sales tax revenue and property tax revenue be used for STAR bond and tax-increment financing (TIF) districts. 

In 2017, the 12 million dollar, 68,500 square foot indoor sports facility opened in downtown Salina, attracting a variety of athletic events, such as league play, tournaments, team practices, camps and clinics in multiple sports to downtown Salina. With full tournament schedules and a packed facility most weekends, surrounding businesses saw an immediate uptick in families looking for shopping, dining and lodging in the immediate downtown area. Salina 2020 investors and the City of Salina, Salina Downtown, Inc. and other private developers realized that they’d need to move quickly if they were to capitalize on this opportunity to restore Salina’s downtown economy.

Leaders Coordinated Business Incentives 

Realizing that improvements and relocations for businesses coming downtown would require robust financing, developers decided to learn more about the relationship between STAR bonds, TIF districts and CID financing from other regional projects. “At some point early on, we started talking about STAR [State Tax Revenue] bonds to incentivize the projects, and it became clear we’d need a single voice for Salina 2020 to support the city’s application to invest in projects,” Walker says. “We came and met with folks in Manhattan to learn about the STAR bonds used for the Flint Hills Discovery Center and Blue Earth Plaza areas.” 

While researching STAR bonds around the region, the group also got to work on a Community Improvement District (CID) for the downtown area. While both STAR bonds and CIDs are funded by sales tax revenue, CIDs can provide financing for improvements via bond issuance or by project reimbursement. To complement the STAR bond financing, Salina’s CID was structured to reimburse projects on a pay-as-you-go basis. Developers eventually decided on a 1-2 percent add-on sales tax across three district to support downtown improvements after considering how to best optimize the incentive mix. 

CID funds can incentivize a range of construction and improvement projects, such as sidewalks, sewer systems, and sculptures, and services, such as security, cleaning, and education and marketing. While diverse, all CID funded projects aim to improve the quality of place in the CID district so that the economic development project can achieve its stated objectives for retail, dining, and investment in the downtown area. “The downtown CID district helps with maintenance and keeps the area looking good for years to come,” Bettles says. “The increased 1 percent sales tax, beginning this year, will make downtown feel secure and clean.” The Downtown CID is estimated to bring in over 7 million over its two decade lifespan with the majority of the funding dedicated to maintenance and security, new tenants of previously vacant space, with some funding for infrastructure necessary to build The Alley Entertainment Complex,  an entertainment business featuring bowling, arcades, laser tag and a sports bar and grill, and the Homewood Suites, which will feature a Starbucks and YaYa’s Euro Bistro.

As the city and state worked to structure the CID and STAR bond incentives, the downtown area benefited from the federal 2017 Tax Cuts and Job Act, which established Opportunity Zones in economically distressed census tracts. Thanks to this program, private capital gains could be invested in census tracts, like the one containing Salina’s downtown, to postpone or decrease capital gains taxes.

In addition to being labelled an Opportunity Zone, the City of Salina’s designation of a downtown TIF district allowed increases in property and sales tax revenue from downtown development to be used on a pay-as-you-go basis to reimburse the developer for redevelopment project costs. The amount of TIF funds going to reimbursement is determined by the difference in tax revenue received in the district before redevelopment and the amount of tax revenue received in the current year. The distinction between a TIF district and a CID is that the TIF takes property taxes into account and does not represent a tax add-on like the CID. For Bettles, the complexity of the funding mechanism can distract from the goal: “Knowing where to find the incentives from state, federal and local governments, with lots of private funding, helps business leaders fill some empty storefronts and secure diverse spaces to keep an even playing field for mom and pops to run a nice eclectic business.”

In 2018, the state approved Salina’s STAR 22.4 million dollar bond application based on the project’s potential to transform the downtown area into a regional and state destination with a unique entertainment and tourism offering. Salina organized their bond as a senior bond and a subordinate bond, which Blue Beacon will purchase. These bonds have already funded work on The Alley Entertainment Complex and the Homewood Suites Hotel. Additional funding agreements are expected to fund renovation of the historic Stiefel Theatre, and the construction of a classic car museum.

Given the significant challenge in downtown revitalization, a short timeline for execution and the need to coordinate a broad set of stakeholders, Salina’s success depended on its broad community leadership. “This momentum comes from the city commission and the city planners and engineers to keep everyone at the table together from the get-go,” Bettles says. “Before, downtown was an exclusive 8 to 5 business focus and a ghost town after hours. Now we’re having a cultural shift with evening and weekend activities as well as lots of entertainment with nightlife as a designation.” The community’s orientation for action, borne in part from its industrial economic history, and commitment to shared success has maintained engagement throughout the difficult process. “We’ve had a lot of challenges since construction initially started,” Bettles says. “Closing businesses while renovating or having traffic flows blocked for any length of time is so tough. Yet, we handle every situation as it comes and lean on good people around us. We are willing to work through problems and fix any problems quickly with our team of allies.” 

Josh Brewer is the agency marketing director at 502, a strategic marketing agency. 

Lucas Shivers works with USD 383 focusing on curriculum, professional learning, instructional coaching and project management. He once cooked and served bison meat at the Salina Rescue Mission.

Why Indoor Recreation? – The Strategic Facility Improvement Plan from Manhattan Parks and Rec community survey showed the following needs:

• 87% of survey respondents preferred the City to develop and operate an indoor sports and recreation facility to meet the unmet needs of the community.
• 91% of households with children younger than 10 prefer the City develop and operate an indoor facility.
• 78% of households indicate space for indoor sports practices and training are not being met at all or space is providing below 50% of their needs.
• Indoor recreation was the No. 1 priority identified in the Facility Feasibility Study for the “creation of indoor space geographically located to meet unmet needs in the community.”

Contagious, Courageous Urgency

 
In Their Own Words: Jane Anderson, executive director of the Friends of the River Foundation since 2015 

The river project has been a huge team effort with a big group of people. The main ideas originated with around six people in the mid-2000s. They wanted to do something with the Smoky Hill River that was cut off from Salina downtown in the 1960s due to flooding. Back then, it became cheaper to use a cut off channel, so 6.8 miles of river was strangled down into a ditch. The Smoky Hill River used to be the pride of Salina with the main parks, fishing and boating options right along the downtown stretch. Older generations talked a lot about it, but it was lost. 

First Fails, Never Giving Up

After forming a non-profit 501c3 with a lovely City of Salina partnership, the team fundraised for a study to see if the river could run water and build a master plan. From the initial $400,000, they found the river to be salvageable with high community interest and possibilities for engineering. 
The development plans took on a ballot question with a sales tax initiative to fund the projects that didn’t initially pass in 2005. The team waited for the dust to settle, learning from these steps and not giving up. 
In 2013, they came back and fundraised again to get a new study to see the economic benefits and analysis to show the renewed potential of the river projects. As they moved the discussion along, the board hired me in 2015 as a one-person shop and an all-volunteer board. I took the risk to step into the role. I wanted to be part of it, because the project was so impressively cool.

 
New Push, Focusing on Future 

In the spring of 2016, Salina voted again with sales tax for the river projects as part of a larger package of additional improvement projects around town. We ran a grassroots campaign called ‘Yes for a Better Salina.’ It was the scariest thing I’ve ever been a part of, but we found good partners with consultants and volunteers. We had so much signage, social media, speaking opportunities and door-to-door teams with a short timeline to keep our heads down and work hard. We watched for an organized ‘no campaign,’ but unlike the last vote, the negative didn’t seem to affect us this round.

The overall vote won by over 800 mail in ballots. Some thought it was close and others thought it was a landslide. Either way, it was a great moment for the community when we heard it passed. I learned it doesn’t take too many people to make big changes. This project has changed the perceptions of the river way from when people used to call it an ‘open sewer.’ In Salina, we tend to be a little conservative and not do grand and beautiful; but this river area deserves such a special miracle. It’s shown me that you’ve got to take your chances, however small, to run with solid ideas. It is paying off.

It’s been such a remarkable journey. At this point, it’s all the city’s project. We still work together closely. I was the only non-city employee to help select the restoration details. The Corp of Engineers will help oversee the riverway with flood control processes and restoration project with living ecology. To sustain the healthy waterway, an additional $10 million of federal funds from the Corp will combine with Kansas Department of Transportation who gave $158,000 for trails. We were so excited. 

Connected, Sustained, Integrated 

The riverway will do so many things with recreation, benches and reflection spaces for all ages. The river area trail system will connect to the dike with 30 miles of trails. We know we need this project to attract more high quality of life to draw younger people and new businesses. 
Water access areas will allow for boats and kayaks. Hardscaped boardwalks through the downtown will become urban parks, so we’ll have wild, green swaths combined with high-density areas. It’s so unique because it has both over so many miles.

 
We’re so excited by the connections to all of it. A new modernized iron bridge will mimic some the beautiful art deco designs to tie into the downtown plaza areas. We truly tie the bow on the downtown development to bring people down to hang out by the water. The thriving downtown spills over into the adjacent neighborhoods for redevelopment. This new identity, with its original pride as a river town, is a ‘big boy’ project to make people fall back in love with our place. 

Beyond Nature, Economic Benefits 

Although this project is definitely for nature people, but so much bigger. A three-year-old kid can throw rocks in the river; a young person can jog beside it; older people can kayak. I’ve never worked on a project with such a wide appeal for everyone. One patron in her 90s can’t wait to see the river back in action downtown. The date is literally on her calendar!

I can’t wait to take my grandkids down this river to enjoy parks and hop along the river from the YMCA. From birdwatching to brews, it’ll have a place for every type of person. These new places for gathering will be there all year long bringing people together. It’s a grand project of dreams to see growth with real economic impacts, and we really need it. The best thing about Salina is knowing how to collaborate and work together. We get along and compromise to get stuff done. That’s why these projects are so successful. Salina will start looking like the spirit of our town; not nearly as sleepy as people think.