Wichita City Council to vote on $450 million in industrial revenue bonds for Boeing

WICHITA, Kan. (KWCH) — Boeing could receive property tax relief for new development at its south Wichita campus under a proposal the City Council is scheduled to consider Tuesday.

The council will vote on whether to issue up to $450 million in industrial revenue bonds for Boeing projects. The move would allow the company to qualify for a 10-year property tax abatement to finance construction, renovations and the expansion of manufacturing facilities on its south side campus on Oliver between 31st Street South and 47th Street South.

In May, Boeing announced plans to invest $1 billion in Wichita over the next three years, including new construction and renovations at this location.

City officials said the industrial revenue bonds would be privately purchased and repaid by Boeing, with the city serving as a conduit issuer. This would not cost taxpayers or the city anything, but would create millions of dollars in economic impact.

“We want to make sure that our city continues to grow, and when there’s economic development, we want to be supportive of it,” said Wichita Mayor Lily Wu.

Wu said that industrial revenue bonds help companies reinvest into the community by offering lower interest rates, property tax abatements and sales tax exemptions.

A study by Wichita State University found that even with the tax break, the incentive package would generate more in long-term economic benefits than the city would forgo in property tax revenue, according to a summary released by city staff.

Wichita projects that Sedgwick County would receive $2.83 in tax revenue for every one dollar invested by Boeing over a 20 year period.

“We like seeing major employers like Boeing, and other of our aviation manufacturing companies, continue to invest in infrastructure right here in Wichita,” Mayor Wu said.

“I never dreamed we would see things like this, it’s so exciting,” said Sedgwick County Commissioner Jeff Blubaugh. “With a backlog of 7,000 aircraft, and the $700 billion backlog that they have, I mean, this is gonna be huge.”

The two local jurisdictions that would benefit from this investment are Derby Public Schools and Sedgwick County.

Supporters argue the incentives are necessary to keep Boeing expanding in Wichita and to secure jobs and related investment. Critics of such packages often raise concerns about shifting the tax burden to other property owners and question whether large companies need public help.

Some wonder why a company like Boeing gets tax breaks, when so many Kansans have been clamoring for property tax relief and not getting any. Mayor Wu said that it may take some time, but this will help in the long run by creating more jobs.

“We can continue to attract more people to come here, and then really expand that tax base,” Mayor Wu said. She said this will lower property taxes, because more people are spreading that burden around.

Mayor Wu said she wants to see Wichita’s manufacturing industry continue to grow.

“We are the air capital of the world, and we need to continue wanting to be that moniker. Not as a past, but also as a future and a current,” Mayor Wu said.

The council is expected to take public comment before voting on the bond resolution and related tax abatement agreement.

The Sedgwick County Commission is set to take up a similar discussion on Wednesday.