After laying off 29 city employees at Century II, Wichita city government now lacks the knowledge and expertise to manage a performing arts and convention center and must privatize operations of the historic building in the wake of the COVID-19 pandemic, city officials say.
The move could eliminate an annual $2.5 million hotel-tax subsidy for Century II operations.
“We need a different business model,” City Manager Robert Layton said last week. “It became pretty clear early in the pandemic that the state of convention business is going to be different going forward, even after the pandemic, and we want to use best practices.
“We want to get professional managers who understood the business as it was but also can predict the trends going forward and help us adjust our operations to be able to take advantage of whatever the new environment is going to be,” Layton said.
Wichita began 2020 poised to consider a $1.2 billion redevelopment project aimed at leveling most of the buildings along the east bank of the Arkansas River from Douglas to Kellogg, including Century II, and replacing them with new convention and performing arts centers, parks and commercial development. It ended the year planning to use the historic building for at least the next decade.
In an effort to alleviate concerns about privatizing, the city has released a draft copy of the Request For Proposals (RFP) and is asking residents to submit comments on the plan through an online portal at wichita.gov/century2.
“Post COVID-19, there will be a ‘new normal’ for the convention, meetings and community events industry, and a private operator will bring with them in-depth knowledge regarding how best to position the operation of Century II in this new reality,” the city says on its frequently asked questions section of its website. “This knowledge and expertise is not something that City staff currently possess.”
Facing millions of dollars in revenue shortfalls, the city laid off all 29 workers at Century II over the summer after most events scheduled at the building in 2020 were either canceled or postponed.
The city has struggled for several years to develop a long-term plan for Century II, a city-owned building that serves as Wichita’s primary public auditorium, exhibition hall, and performing arts and convention center.
Downtown booster organizations have been pushing for demolition and replacement, saying the building’s round shape is inherently flawed and doesn’t allow the city to maximize revenue potential on a square-foot basis.
Century II defenders say the city has neglected the building for at least a decade and has been siphoning off hotel tax dollars meant for the upkeep of Century II to instead fund the city’s visitor’s bureau.
“We just want to make sure that we maximize our operations at the facilities as they exist,” Layton said. “Right now, we subsidize the operations of CII by about two and a half million dollars, and we’re hoping that by bringing in private management, that we’ll be able to reduce that just through their change of business practices.”
That roughly $2.5 million a year comes from an added 6% tax on hotel stays in Wichita, called the Transient Guest Tax, and not the general fund. It was set up by charter ordinance in 2010 to help maintain the building and offset any losses at Century II. Privatizing operations would allow that money to be directed “to other eligible activities,” according to the city’s latest budget
City Council member Brandon Johnson, who served on the Riverfront Legacy Master Plan committee that called for tearing down Century II and the former Central Public Library and replacing them new buildings, said privatizing operations could be a good thing.
“In many ways, this process would be better than what we had before,” Johnson said Tuesday in a livestream video with Layton posted on social media platforms by the city.
The business models for convention and performing arts industries were built on drawing large crowds, but mass gathering limits have forced most large events to be canceled since March.
Critics of the move say it could limit public access to the historic building and drive up the price of attending events.
Celeste Racette, founder “Save Century II,” a group that formed in opposition to the Riverfront Legacy Master Plan, said she’s worried that a private operator will limit the kinds of events allowed at the publicly-owned building.
“The private company that takes over is going to be looking to make a buck,” Racette said. “They certainly won’t take care of it like if it were a city building with city employees and the public could meander in there at any time to attend events or to go there.”
The city’s agreements with the Hyatt Regency Hotel, Music Theatre Wichita and the Wichita Symphony Orchestra will remain in place, Layton said.
“The buildings will be available through the entire process,” Layton said. “We don’t anticipate to do anything differently except what’s required by the pandemic. There will be events that we cannot hold safely in Century II and we’ll continue to refrain from allowing those to occur, but those that can meet the county health standards — we’ll continue to accommodate those.”
Century II showed its utility as a city building during the pandemic, serving as a drive-through decontamination station for ambulances and a satellite location where members of the public could address the City Council in lieu of attending in-person meetings at City Hall.
“Maximizing profits doesn’t always serve the public interest,” Racette said. “The citizens of Wichita own that building and we already have a way to pay for the building and its operations (Transient Guest Tax).”
Layton said Tuesday that the City Council will maintain control over the building, even with a private operator.
“We are not privatizing the building where someone would take ownership,” Layton said. “Instead, what we’re doing is simply contracting for management of the facility, so we’ll retain ownership. We’ll still have responsibility for maintenance of the facility. … If we do any significant capital improvements those will also be brought forward for public discussion.”
Pricing of certain events, too, would be under council control, Layton said.
“Ultimately, the council will decide what the fee structure looks like still,” he said. “Again, it’s our facility. They’ll be managing and operating it for us, but the council will still exercise control over our fee structure, and if there’s a policy about trade shows or about consumer shows or some of the Wichita attractions that use the facility, then the council will adopt those policies on what the pricing will be.”
Johnson said it’s vitally important for residents to weigh-in on the RFP, especially if they have concerns.
“We are seeking more public input in this process. It’s not just something we’re doing on our own. We want more people to engage in that process. And then they’ll be able to engage with the council when it comes before the council as well,” Johnson said.
“We’re definitely wanting citizen-residents to weigh-in on their thoughts and questions about this,” Johnson said.
Layton said privatization is not the final step in the city’s decisions on Century II.
“This has nothing to do with the future of Century II and of the convention center, right? This is about doing our best to operate that facility following state-of-the-art, twenty-first century practices, and we want that building to be success. And there will be time later on for the council to communicate with the public, engage the public, regarding the future of that complex. But today, we just want to make sure that we’re operating to the best of our abilities with professional expertise and reducing the taxpayers’ burden on operating that facility,” Layton said.
Layton said a private company could ultimately help the city determine Century II’s future.
“We want to identify capital needs for the building. We want to identify impediments to us being successful or the things we need to do to reinvest in the buildings in order for them to be successful for community gatherings as well as for conventions. Let’s go ahead, determine what those are, make those improvements, and then also improve our day-to-day operations.”