$51 million hotel plan for Olathe

03/01/2013 5:49 PM

05/16/2014 9:20 PM

An Illinois developer has proposed a $51 million hotel and conference center in the fast-growing K-10 highway corridor in Olathe.

Plans for the project were unveiled Friday by Olathe Mayor Michael Copeland during his State of the City speech.

The mayor said the City Council on Tuesday evening would consider a preliminary development agreement with the Heart of America Group, based in Moline, Ill., to build an eight- to 10-story hotel and 750- to 1,000-seat conference center on the southeast corner of Ridgeview Road and K-10 in the Corporate Ridge office development.

The developer is negotiating with Embassy Suites, which would operate the hotel. It would have 200 rooms, an outdoor rooftop bar, pool and fitness center, a restaurant and lounge, and a large common space.

This is not the first time Embassy Suites has been approached about operating in Olathe.

City officials had reached an agreement with Springfield hotelier John Q. Hammons in 2008 to build a 315-room Embassy Suites that included 80,000 square feet of meeting space in Corporate Ridge at Kansas 10 near Interstate 435. That $75 million project, however, failed to move forward.

As was the case with the proposed Hammons project, Olathe is offering a substantial tax incentive package to the Heart of America Group to help finance the project.

The $19.6 million incentive package includes tax-increment financing and a community improvement district that includes allowing the hotel developer to keep the city’s 1 percent sales tax and 100 percent of the guest tax.

City officials said the project came at a perfect time. The Holiday Inn hotel and conference center near Olathe Medical Center will soon be converted into an assisted living complex.

Copeland noted that while there are a variety of hotels in Olathe, there is still a need for an upscale hotel with substantial meeting space.

“Our business community has grown a lot over the past decade,” Copeland said, “so we’ve wanted a place like this for a while.”

Mike Whalen, the president and chief executive officer of Heart of America, sees the project as a symbol of Olathe’s growth.

“In 50 years, there might not be a whole lot left between Olathe and Lawrence,” he said. “This is a building that could easily serve both cities.”

If the council approves the preliminary plan on Tuesday, Whalen said a final plan could be submitted by the end of summer.

Whalen expects construction to take up to 16 months, with a late 2014 or early 2015 opening.

Heart of America has developed 27 hotels and restaurant projects in the Midwest, according to its website.

Two of its hotels are in Olathe — the Hilton Garden Inn and the Holiday Inn Express & Suites, both on South Strang Line Road.


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