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The Flats at Wichita State University is a private-owned apartment complex on Innovation Campus. Aug. 14, Wichita State announced about 300 students would be moved from Fairmount Towers to the complex.

The Flats at Wichita State University is a private-owned apartment complex on Innovation Campus. Aug. 14, Wichita State announced about 300 students would be moved from Fairmount Towers to the complex.

Matt Crow

Matt Crow

The Flats at Wichita State University is a private-owned apartment complex on Innovation Campus. Aug. 14, Wichita State announced about 300 students would be moved from Fairmount Towers to the complex.

Lease numbers flat for new private apartment complex, university steps in

July 24, 2017

An agreement allowing Wichita State to lease an apartment complex from a private company — owned, in part, by the chairman of the board of regents — and run it like a dorm has not been finalized.

The Kansas Board of Regents regulates private housing at Wichita State. Regents must directly authorize state universities to:

▪ Enter into written, verbal or implied agreements related to private housing.

▪ Give preference to any owner or operator of private housing.

▪ Guarantee occupancy in or payments for private housing.

▪ Provide public funds for the supervision, maintenance or operation of private housing.

David Murfin, the chairman of the board of regents — which will ultimately determine whether Wichita State can lease The Flats — owns 25 percent of the private developer MWCB, LLC, which owns The Flats. Murfin’s company has also been awarded contracts by the university-affiliated nonprofit Wichita State Innovation Alliance for other major projects on Innovation Campus.

Wichita State Innovation Alliance was incorporated in 2015 to manage relationships with private industry on Innovation Campus. The university-affiliate’s nonprofit status allows it to award development contracts without competitive and open bidding, which would be required if private companies were dealing directly with the university.

According to the Kansas Department of Administration guidelines, competitive bidding processes are in place with the “expectation that State of Kansas Agencies will get the best value possible” to fulfill government agency’s “obligation to be transparent when procuring goods and services, and reasons for selecting a vendor should be clear and defensible to all.”

The Innovation Alliance board has awarded contracts to MWCB for The Flats, Airbus, and a partnership building set to begin construction this summer. Murfin’s company was also awarded the city-county law enforcement training center through an agreement between the university-affiliated nonprofit, the City of Wichita and Sedgwick County, a process the county questioned as not going through the proper competitive bidding process required of city and state law

Innovation Alliance has five university administrators on its board: President John Bardo, Vice President for Research and Technology Transfer John Tomblin, Director of Governmental Relations Andy Schlapp, Senior Vice President and Provost Tony Vizzini, and Vice President for Strategic Communications Lou Heldman.

The nonprofit accepts proposals from anyone who is interested in building on Innovation Campus.

The Sunflower reached out to all members of the Kansas Board of Regents through its online contact form to request a response about potential conflicts of interest and Innovation Campus. Those questions went directly to the spokesperson for the board of regents, Breeze Richardson.

“Emails sent to this address are delivered to me; by Board policy, only the Board Chair is in a position to speak with the media on behalf of the Board,” Richardson said in an email. Murfin is the board chair. 

Murfin did not respond to The Sunflower’s request for an interview.

‘They felt it would be better if we went under the private housing model … ‘

July 14, the university announced it would be moving “about 300 students who had reserved space” in university-owned Fairmount Towers to The Flats on Innovation Campus, which was below 20-percent occupancy. Forty-eight students had signed up to live in the 280 available beds at The Flats.

In an online FAQ page released by the university the day of the announcement, as an answer to the question “Why wasn’t this announced sooner?” the university said, “The decision was announced as soon as the details were finalized.”

“The actual written lease agreement isn’t signed, sealed, and delivered yet,” Wichita State General Counsel David Moses said.

“You announce things, and then you finalize the i’s and the t’s. That actual document doesn’t exist yet,” Moses said.

In a July 7 email first reported by The Wichita Eagle, Wichita State Director of Governmental Relations Andy Schlapp told Regents President and CEO Blake Flanders that Wichita State wanted to move students from Fairmount Towers to The Flats. Under KBOR policy, Flanders can approve agreements related to private housing with terms shorter than a year.

“Flanders thanked Schlapp for expressing WSU’s intentions and cited the KBOR policy that he could approve short-term private housing agreements,” The Wichita Eagle article says. “But that e-mail provided to The Eagle was dated July 18, several days after WSU announced it was moving ahead.”

July 18 was the day after The Sunflower reported on the lease agreement with MWCB that Vice President for Student Affairs Teri Hall said would allow use of students’ federal financial aid money that would help the university pay for a lease on The Flats.

“We went to the regents under university housing, which — totally fine way to do this — and notified them that we were doing this. (We) had conversations with Blake [Flanders]. He was fine with it,” Schlapp said.

“When he got it, talked to their attorney, they felt it would be better if we went under the private housing model, which is fine. So there’s a couple more steps and approvals that have to go through that. All that is fine,” Schlapp said.

Schlapp told The Wichita Eagle that Wichita State would visit with the regents in September to refine a future agreement on The Flats. Move-in day for Wichita State students is Sat., Aug. 19.  

‘We did not manage probably to the level that the developer expected’

The Flats is a privately owned apartment complex constructed this year on Innovation Campus and set to open in the fall. The building is owned by MWCB, a partnership of four of the region’s most prominent businessmen: Murfin, Nestor Weigand Jr., Ivan Crossland Jr. and Steven Barrett.

Courtesy Photo
From left: Nestor Weigand, Jr., Steve Barrett, David Murfin, Ivan Crossland, Jr. They are the developers of The Flats at WSU (MWCB, LLC)

The Flats offers students a more modern housing option with a central location on campus. (Fairmount Towers is a 53-year-old building on the opposite corner of the intersection of 21st Street and Hillside.) Students who are being moved to The Flats will pay Fairmount Towers rates to live at the new complex.

Schlapp said the move would solve multiple problems for Wichita State. It would allow the university to “take Fairmount offline” and it would enable the university to “fill The Flats with Wichita State students.”

“But more importantly to the vision and mission of this university is how do we get students on our campus? How are we creating those collision spaces with businessmen?” Schlapp said.

“We have 400 Airbus employees, we’re building Partnership 2 — that’s going to be full of more business people. We have two other pretty large companies that we think are pretty close. The only piece that’s missing is students,” Schlapp said.

The Flats was originally supposed to be operated by the developers MWCB, but as early as Feb. 23, university officials announced Wichita State would be managing the apartment complex. The university would not provide The Sunflower with any details of that agreement. Later in the spring, it was announced payments to The Flats could be made through the online, university portal.

In response to a record request for a copy of a written agreement between The Flats and Wichita State authorizing the use of the university portal to make payments to The Flats, Wichita State General Counsel David Moses said “such written records does not exist.”

Schlapp said part of the reason The Flats had so few people sign up was university housing and residence had made The Flats a third priority — behind university-owned Shocker Hall and Fairmount Towers — for students who wanted to live on campus.

Schlapp said university housing and residence “did not manage probably to the level that the developer expected.”

“That was the question they were asking: ‘How come we only have 48 (students)? What are you doing? Where are the tours? We’re not seeing the students, blah, blah, blah. We can’t see on your webpage where you’re advertising, we can’t. …’ They were ready to go to a second developer — or a second person — to fill the building. But that defeats the purpose of why they built it,” Schlapp said.

One of the reasons MWCB built The Flats, Schlapp said, was because they care about Wichita and Wichita State and wanted students to live there.

“They care about improving Wichita,” Schlapp said of MWCB, whose owners are all local. “They thought building a private apartment would be good. They have a choice. They had a choice to hire Case & Associates, who rents most of the apartment complexes around here, and that would have been full.”

“But they didn’t want it full. They wanted WSU students. So they asked us to manage it.”

Schlapp said university housing had the idea to run The Flats like a dorm. But to do so, Schlapp said, would take developers “willing to take a loss to solve this problem.”

Schlapp said the Wichita State will pay MWCB about $7.50 a square foot as part of the lease agreement, which he said is less than half of what the developers needed to “break even.”

“They’re going to lose their ass in this deal. But they think it’s the right thing,” Schlapp said of MWCB.


(*Correction: An earlier version of this story that appeared online erroneously listed the Experiential Engineering Building and GoCreate as being developed by MWCB and that WSIA awarded the contract for the Law Enforcement Training Facility on Innovation Campus. The nonprofit did not award that contract but subleased the land to Murfin’s company to build on Innovation Campus.)

14 Comments

14 Responses to “Lease numbers flat for new private apartment complex, university steps in”

  1. Blah, Blah, Blah on July 25th, 2017 7:20 am

    Truer words have never been spoken by Andy Schlapp than Blah, Blah, Blah. Who believes anything in this story? They will take a loss to support Wichita State? Really?

    Lou Heldman billed The Flats many months ago as open to students and non-students so where was the concern then about who paid the $1,000 per month? Where was MWCB’s great concern for WSU and students then? Money dreams met reality and now we have this great altruistic view to share with the world.

    Schlapp blaming Housing & Residence Life for not marketing the facility is typical behavior for him. Take the glory of Innovation Campus when it fits and blame everyone else for problems. Accountability and responsibility are Blah, Blah, Blah to ole Schlapper.

    If Murfin is going to lose his ass then where are the documents to prove it? Why not provide them to the Eagle? Why no transparency?

    No signed documents. No dotted i’s and crossed t’s. Just lots of Wheelin’ and Dealin’.

    I am glad the Eagle and Chance are helping bring to light the Innovation Campus realities. Without the $70,000,000 from the Sedgwick County taxpayers through the Mill Levy Fund, Innovation campus would be weeds, dust, and rock. Public taxpayers have footed the bill and not the private companies that were promised.

    Ask the faculty how much money has come to them from Bardo’s promises. It is ironic that Bardo and Murfin were the force behind this and neither seems able to speak and take responsibility or provide the transparency a public university should provide taxpayers.

    [Reply]

  2. HOGs on July 25th, 2017 8:36 am

    Next Sunflower Article Title

    David Murfin, Nestor Weigand, Ivan Crossland, and Steve Barrett: Developers with Hearts of Gold. They will lose their asses to support students and WSU.

    [Reply]

  3. Anne on July 25th, 2017 10:25 am

    Wow. It is like, when you do something that nearly everyone on campus was against then no one wants to take part. Who would have thunk it. And now they’ve announced moving the fairmount students in there to make up for the lack of students and will then demolish Fairmount Towers, despite Fairmount Towers not yet being paid off. I mean, as a small business owner, that’s a red flag right there that screams “Oh, they haven’t paid off these much cheaper, much lower quality dorms yet, maybe we SHOULDN’T do this”. But no, instead they build the apartments no one wanted at a price 48 of the students at a school of thousands can afford and then have to force the fairmount students in (over 300 in rooms that can fit only 240 if you subtract the students that signed on) and say that the school will just keep what ever money is left over of their loans/scholarships for housing after paying the fairmount price. Seems like a great deal until that last part. And the middle part. All the students wanted was to stop the flooding in buildings, have A/C, and have heating. Those problems still exist, and now the eyesore of apartments painted in the cheapest of construction grade paint they could muster exist too. If they’d lower the price, then they might stand a chance to fill them and break even, instead they kept them high and had to run like chickens with their heads cut off to attempt a recovery. This will be similar to the YMCA they are planning on building: the students will end up paying the price for another building they voted against.

    [Reply]

  4. Steve on July 25th, 2017 10:29 am

    Can someone ask Schlapp how draining funds from Housing & Residence and putting it into the pockets of private developers along with Tomblin’s commission is helping WSU? Wouldn’t WSU and the students have been better off if people willing to pay the outrageous rents at The Flats were allowed to use their own money instead of diverting financial aid money away from the public parts of a public university?

    The entire Bardo administration is a fraud and a scam. Some of Wichita’s wealthiest and most politically connected real estate developers saw a huge chunk of public land and wanted to profit from it. All they needed was a scumbag like Bardo to look the other way and go along with their plans. A full investigation of the personal finances of Bardo and his Executive Team must be done to determine how much personal financial benefit they have derived from selling Innovation Campus to their cronies.

    [Reply]

  5. Fake Pres. Bardo on July 25th, 2017 11:19 am

    And the gravy train keeps on a rollin! I can just imagine the next stop is hearing a Wichita State Football game from my front porch. We met conditions of phase 1 for The Flats, now onto The Flats phase 2! Go Shox!

    As always buy food and coffee on innovation campus,
    Fake Pres. Bardo

    PS: I am truly sorry that students will be getting a smaller room, but its a necessary sacrifice to save innovation campus and for a future football team.

    [Reply]

  6. Unclear on July 25th, 2017 11:48 am

    Lou Heldman previously said The Flats didn’t lease because students couldn’t see themselves living in something what was not complete. Now Schlapp blames Housing & Residence Life for not marketing it. In the past, Tomblin said the rents were not too high and Heldman said the market would drive the rates and people were going gangbusters to be on Innovation Campus. Can you get you pick an excuse and stick to it?

    [Reply]

    Fake Pres. Bardo Reply:

    There is no excuse. Look! the flats are over filled! We were right all along. Great job innovation campus, I think another raise for Tomblin is in order. Next order of business is to make class rooms smaller, that way students have more time to spend on innovation campus because they will have to wait another semester to take their pre-requisite courses.

    As Always,
    Fake King Bardo

    [Reply]

  7. JCMM on July 25th, 2017 12:47 pm

    I find it really comical that they’re blaming Housing for this mess. What kind of institution conducts a survey, finds out that students desire a low cost option for housing, decide to build luxury apartments that students can’t afford, then tear down the only low cost option available for students and place them in the luxury apartments that they can only afford the first year due to giving them a price cut? What logical person thinks this makes sense? Next year, when they have to charge everyone the normal rate in order to break even, what makes them the building is going to fill any more than it did this year? Unless you encourage them to take out loans that are supposed to be used for school and have them funnel that into profits for a private company. That sounds like a wonderful plan!

    Tours were conducted as often as possible due to construction. When people did go on tours, all the feedback was “they look great, but I can’t afford to live here”. If these apartments were built for students, then why didn’t they use the student feedback they got in the original surveys that said they wanted something less expensive?

    Saying there was no demand for Fairmount is ridiculous when the number of people living there this year probably would have out weighed last years numbers. I find this whole process ridiculous and i’m amazed at how some of this is legal. Students need to say something and demand more transparency from Bardo, MWCB, and Housing.

    [Reply]

  8. Refund Time on July 25th, 2017 12:48 pm

    The story in the Sunflower from January 28, 2016 discussed the study done by Braislford & Dunleavy. A small part of the story is below. Read it and compare the comments to what has now happened.

    *****

    Brailsford & Dunlavey outlined two financing options for the residence hall — a public-private partnership and a university-funded option. A public-private partnership, in which a nonprofit foundation owns the property and leases the site to WSU, would cost $4 million more than a university-funded option.
    A public-private partnership would generate $983,000 for the university its first year, and $1.26 million by its tenth year. A university financed option would generate only $12,000 its first year and $827,000 by its tenth year.

    Although the university’s revenue would increase under a public-private partnership, rent would be 16% higher for students under a public-private partnership than a university funded residence hall, according to the study.

    “The housing study from an experienced and respected firm estimates market demand for a minimum of 400 beds,” Heldman said. “We will see how enrollment goes fall semester (2017), see what else is going on in the local housing market and reassess our options at that time.”

    *****

    WSU paid about $50,000 for this study. Heldman says an experienced and respected firm estimates a MINIMUM demand of 400 beds. Stop laughing now. Can WSU get a refund on that $50,000 study? They chose the more expensive route with the higher rents and got 48 instead of 400 MINIMUM. At least it is a little more than 10% of the MINIMUM.

    How will WSU spend that $1,000,000 annually from The Flats?

    The Sunflower story link is below.

    https://thesunflower.com/4087/news/student-housing-questioned-in-survey/

    [Reply]

    Fake Pres. Bardo Reply:

    I will spend that money to tear down Fairmont and create a new football practice field. With KU football sucking, Bill Snyder almost dead, Now is the perfect time to create a WSU football team. Can you imagine it? Maybe Wichita will name a toll road after me. “Pres. Bardo’s Student funded Toll Road.” It will lead straight into innovation campus.

    Anything is possible with innovation campus.

    As always,
    Fake Pres. Bardo

    [Reply]

  9. Concern for MWCB on July 25th, 2017 8:55 pm

    I am concerned for Murfin and MWCB. How will they survive as developers losing their ass in this deal as Andy Schlapp says? Should we start a GOFUNDME page for them? I don’t know if the many millions they made on the other projects they were given at Innovation Campus and downtown will help them stay afloat or not.

    [Reply]

  10. History on July 26th, 2017 7:28 am

    Seems like the IRS had issues with how Bardo used bond money in the past at Western Carolina University with part of Western Carolina’s WCU Research and Development Corporation and a housing project.

    http://www.thewesterncarolinajournalist.com/2015/02/04/wcu-greek-village-is-no-more/

    http://www.thesylvaherald.com/top_stories/article_3bf841e8-b14b-11e4-b654-33acc42fc304.html

    [Reply]

  11. Bad Math on July 26th, 2017 12:17 pm

    Things just don’t add up. The agreement approved by the Board in June 2016 that Murfin recused himself from was for them to be a private apartment complex. If KBOR policy requires Board approval for universities to enter into different agreements with private apartment complexes, where was the request from the KBOR Director of Facilities to the KBOR President/CEO to allow WSU to enter into a management agreement with the MWCB private apartment complex in February 2017? Where was the KBOR President/CEO approval? It seems the agreement to manage spans more than a year so when was full Board approval sought and given for that?

    KBOR policy states that a request for an agreement less than a year in length is to come from the KBOR Director of Facilities to the KBOR President/CEO so where is that request from Nelda Henning, KBOR Director of Facilities, to Blake Flanders, KBOR President/CEO, in July to allow another agreement with a private apartment complex of less than a year in duration? All that is reported is that Andy Schlapp from WSU made the request on behalf of Bardo to Blake Flanders. That doesn’t seem to be in line with KBOR policy. Add to that the approval from Blake Flanders comes after the announcement of a change was made.

    Why have a policy?

    [Reply]

    Fake Pres. Bardo Reply:

    The only policy is to GET THOSE STUDENTS OFF MY FUTURE FOOTBALL PRACTICE FIELD!

    Rest assured that the demand for The Flats was spot on and we can build phase 2 of The Flats. This is a research university and I don’t have to answer to you. I make decisions here. I make decisions there. Sometimes I make no decisions at all. Deal with it.

    As always,
    Fake Pres. Bardo

    [Reply]

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