There have been a couple of changes at Derby’s Hampton Inn: the former operator of the business is no longer associated with it and the hotel – after a property tax abatement – is now back on the tax rolls.
The Hampton Inn had been operated since 2012 by Johnnie Parmar, who along with his wife, P.J., have been in the hotel business in Arkansas City and Pratt. The Parmars were not available for comment; however, the current general manager on duty, who declined to provide her name, confirmed that Parmar was no longer with the entity.
“The bank owns it now,” she said.
She declined to name the bank. In previous dealings, the hotel’s bank had been RCB Bank, but it had assigned its duties under terms of Industrial Revenue Bond financing used by the hotel to Security Bank of Kansas City. Bank officials were not available for comment.
No bankruptcy filing was found at federal court in Wichita for the property.
The manager said operations at the property at 1701 E. Cambridge St. near the intersection of Rock Road and Patriot Avenue, continue.
“We’ve got to keep going,” she said of the property, which is appraised at $3.49 million and is the only Derby hotel.
The 63-room, 32,527-square-foot hotel operates under the business name of Derby Hotel Inc. and was built in 2008, just as a nationwide business downturn was getting underway.
However, the business received a major break through a 10-year property tax abatement. Its general taxes were zero up until 2019, when they were $28,919, according to Sedgwick County tax records. They then increased to $126,631 in the 2020 tax year. The taxes in 2019 were paid and part of the 2020 taxes, or $66,260, has been paid. The balance is due in May.
Governing bodies receiving money from the property taxes include the city of Derby, USD 260 and the Derby Recreation Commission, along with the county and state.
The property is assessed a “specials tax” as is generally the case in new development in Kansas. That has varied from $5,717 in 2011 to $5,889 in 2020 and will continue until 2025, according to City Manager Kathy Sexton.
Those specials, including half of 2020’s, are being paid.
Sexton said while an abatement such as Derby Hotel Inc.’s is considered at the same time as an IRB request, it is not automatic and is an open process.
“It is discussed and decided in public,” she said.
As part of the IRB, the sales tax on construction of the building was exempted, which is standard with an IRB, Sexton said. At times, it’s the only tax break approved with an IRB.
The bonds were issued Nov. 4, 2008, and in 2018 were extended to Dec. 19, 2019. At that time, the city’s involvement with the operation ended. Under terms of an IRB, the city, while holding title, carries no liability and any default or bankruptcy does not affect the city’s credit rating.
Sexton said the hotel has been remitting sales and transient guest taxes since opening.
Derby officials have worked for a long time to attract a major brand hotel. A hurdle, Sexton said, was “hearing repeatedly from various developers that they did not want to be the first hotel in the community due to the uncertainty involved with a lack of experience of hotels in Derby.”
In addition, the hotel would require a financial incentive from the city, she said. Overall, the city doesn’t issue many IRBs or other tax incentives.
That, Sexton said, is due in large part to the nature of commercial development here, which has been mostly retail and service businesses. They generally don’t qualify for them, and in any case, usually have not been needed.
In Derby, IRBs and abatements have been aimed at speculative buildings and manufacturing. Officials also want to help the older parts of the city.
“In recent years and currently, Derby’s priority has been supporting local businesses to encourage their growth and incentivizing redevelopment of the West End, Buckner Business District, and K-15 corridor,” she said.
While growth is welcomed, don’t expect another Derby hotel any time soon.
A second hotel is still part of the developer agreement for the STAR bond district, which includes the area around the dinosaur park, but that time frame has been extended.
“Given the current COVID/economic situation, I wouldn’t expect to see progress on that for a while,” Sexton said.
While the Derby manager gave no reason for the operational change, it’s no secret that the hotel industry has been hit hard by COVID-19.
Last year was the worst year ever reported for the industry in modern times, as occupancy dropped 33 percent from 2019 down to 44 percent and there were more than 1 billion unsold room nights, an all-time downturn record.
According to the U.S. Bureau of Labor Statistics, even while recovering in 2021, the hotel business will remain almost 500,000 jobs below 2.3 million employees, its pre-pandemic level. Furthermore, an industry group, the American Hotel and Lodging Association, stated that it will take until 2023 to get back to employment levels of 2019, before the virus decimated the hospitality business.
The group also reported that less than a majority of U.S. residents, or 34 percent, say they currently are at ease with staying in a hotel; however, they also state that as vaccinations become more widespread, they are more likely to be open to staying in a hotel again. Hotels are lobbying the current administration to speed up vaccinations, some even offering their properties as inoculation sites.
In some ways, Derby is better off than other cities, as its hotel will stay open.
In New York City, almost 3,000 hotel rooms are predicted to simply be shut for good as numerous hotels will not reopen again.
Hampton Inns are a brand of hotels trademarked by Hilton Worldwide Holdings Inc. (NYSE: HLT). Its category is termed as “moderately priced, upper midscale hotel” with limited beverage and food service.
While a few are managed by Hilton, most are independent and are operated by franchisees. It is one of the largest hotel franchises in the United States.
Members of the Derby Board of Education toured the district’s new administrative center at their Feb. 8 meeting – which was the first public look at the completed building.
Voters in USD 260 approved development of the nearly $12 million administrative building, 1550 E. Walnut Grove Rd., in 2018 as part of a package of bond projects across the district. Construction on the two-story building, right beside Tanglewood Elementary School and just west of the Derby Public Library, began in 2019 and wrapped up in fall 2020.
Much of the district’s administrative team previously operated at the old administrative center, 120 E. Washington St.
“It’s been great to watch the progress, especially the older buildings,” said Matthew Joyce, a Derby school board member since 2009.
While the BOE faced some challenges with bond budgets early on, Joyce said, the district worked hard to ensure projects stayed within budget.
Among the administrative center’s many features, Joyce said the openness, vast amount of storage space, additional storm shelter for Tanglewood Elementary and the “much needed” meeting rooms stand out the most.
Other major features at the building include new office space for all of the administration’s departments, a board meeting room fit for live-streaming and recording, two kitchens, several conference rooms, Derby schools-themed graphics, and magnetic walls to feature staff, students and their work.
“It’s a place to bring visitors to the district for those looking to relocate to Derby for Derby schools,” he said. “I have already seen the district become more efficient [due to the new administrative center], but I look forward to the unlimited training opportunities once COVID restrictions are lifted.”
The new building brings district staffers who were previously spread across three buildings under one roof. That has been key to helping the district run a smoother ship, Superintendent Heather Bohaty said.
“We moved in early in November and immediately can tell the difference in efficiency and communication between departments,” she said. “The accessibility to each other is so valuable on a daily basis.”
Another key feature in each department’s section of the administrative center is extra office space, which will enable the district for future growth, Director of Operations Burke Jones said.
He said the development of the building’s many features, from graphics to office space, was a collaborative process.
“Early on, district staff went to Kansas City, Oklahoma, and Texas and looked at other facilities that had been built recently, and then they really took some of those concepts and made their own building,” Jones said. “The district committee for that building was highly instrumental in the design, working with the architects, to make sure that building had everything that we needed and the possibility for future growth.”
Jones and Bohaty agreed that the new center will offer space for new learning opportunities for students and career development and training opportunities for staff members.
Bohaty said the district would like to offer tours of the new administrative building to the broader public once it is safer and there are less COVID-19 restrictions. A date and time has not yet been set.
As the district nears completion of its final few bond projects, such as Cooper and Oaklawn Elementary schools and Panther Stadium, Bohaty said she’s grateful for the community’s trust in this years-long endeavor.
“I’m proud of this building, as well as all other projects we’ve completed from the 2018 bond,” she said. “I’m thankful for our community support to allow this building and others to be possible. These facilities will serve our community for years to come.”
A quote on the wall by former BOE member Larry Gould greets visitors as they enter the new administrative center. Bohaty said it perfectly sums up the volunteer work by board members and others who have had an impact in developing the community over the years: “Blessed are those who plant a tree whose shade they will never sit under.”
Click here to see a photo gallery from the tour.
Safety enhancements were the initial focus of a discussion on municipal code ordinance updates brought before the Derby City Council at its Feb. 9 meeting. The intent was to change a section regarding golf cart usage – treating carts crossing the street like pedestrians (to not leave the curb suddenly into the path of a vehicle).
“The goal is clarity and the ultimate goal is safety, and I think the provision to the ordinance promotes both,” said Derby Police Chief Robert Lee.
Eventually, though, the discussion went out of bounds as the council began to debate the merits of allowing golf cart usage in broader settings around Derby.
Currently, the ordinance makes it unlawful for any person to operate a golf cart on highways or streets within the corporate city limits.
There are, however two exceptions: the streets located within the boundaries of Patriot Avenue (north), Rock Road (east), Meadowlark (south) and Woodlawn (west) and for the sole purpose of traveling between an individual’s residence and a golf course or on a cart path.
Recalling previous discussions on the issue, council member Rocky Cornejo brought up a prior request from a citizen asking if they would be allowed to travel to Braum’s in a golf cart. Cornejo also questioned if travel between homes within the outlined boundaries would be allowed. Under the current ordinance, those operating golf carts are intended to take the “most direct route” between their own home and the golf course.
The proposed ordinance update was the first brought before the council in quite some time, City Manager Kathy Sexton noted, stating staff could certainly look at other considerations as part of the update.
With the boundaries set because of the community around Derby Golf and Country Club, Cornejo recommended opening up golf cart usage between residences and/or recreational amenities in that zone. Fellow council members were in agreement, with some noting carts are already being utilized in that manner currently.
“You can put whatever you want in there, but they’re going to use them like they want to use them,” said council member Jack Hezlep. “People are going to use them regardless of what we say. I’m saying why not go along with it.”
“If we can make it work and we don’t have increased accidents, then why shouldn’t we,” added council member Jenny Webster.
A number of concerns were raised among other council members, though, that the city could be going down a slippery slope if it allows the operation of golf carts outside of the course itself. Andrew Swindle questioned if golf carts were allowed to operate on the streets within The Oaks in the currently zoned area, why couldn’t that then be allowed in similar neighborhoods.
“To me, it’s opening a potential can of worms,” Swindle said, “because a lot of people are going to be saying ‘why can’t I do that where I live?’”
Swindle also questioned if the updated ordinance would then allow for the operation of similar alternative vehicles (like four-wheelers). While some similar reservations were held by other council members, council president Nick Engle suggested expanded use within the currently zoned area could be the starting point for discussion of further usage – either in other neighborhoods or with other vehicles.
Questioning Chief Lee about the safety of expanded usage of golf carts, he compared it to the use of any other vehicle – the more you drive it, the more chance an accident will occur, with expansion of golf cart usage opening the door to that as well.
“As you do that, it’s just inevitable that you’re going to have car-cart collisions and they’re going to be similar to car-motorcycle accidents,” Lee said.
Given the intent of the original update of the city council, it was noted that stop signs have been placed on cart paths at the country club and new street signs have been installed warning of joint pedestrian/golf cart crossings to help address safety.
Per the ordinance, golf cart users are also required to have a permit and liability insurance, with Lee noting only one individual has registered a permit since the ordinance has been in place.
With a majority of council members in favor of expanding golf cart usage within the current boundaries at least, a motion to table discussion of the ordinance was approved with staff instructed to take the feedback and bring a new recommendation back before the board at a later date.