Sunflower Development Group is looking to steer a $20.7 million mixed-use development project to a city-owned lot in downtown Olathe.

The Kansas City firm has teamed up with Block Real Estate Services for the joint venture. It envisions building up to 20,000 square feet of commercial retail space on 2.9 acres at 200 W. Santa Fe St. A complex of 100 upscale lofts would be built atop the retail space with a parking lot built behind them.

The lot is one of three downtown parcels Olathe officials put up for sale in January to attract development. The site now holds surface parking and a former fire station that has been repurposed as office space for a number of city agencies, including housing programs and parks and recreation.

Banks Floodman, business development manager for Sunflower, told the Olathe City Council on Tuesday that the developers think the project will provide much-needed housing in the area and generally contribute to efforts to revitalize downtown Olathe. City officials recently completed a streetscape project to encourage pedestrians along Santa Fe, and construction is expected to begin next year on replacing the Johnson County Courthouse.

“We see a vision for this area that is going to go well beyond this project,” Floodman said. “We see restaurants, we see a lot of things that we know the city of Olathe envisions as well. And we hope this project will serve as a catalyst to make a lot of those things happen.”

The City Council voted unanimously on Tuesday to approve a real estate agreement selling the lot to the joint venture, called Sunflower Olathe 1, for $10.

As part of the real estate agreement, the developers said they will likely request the city to assist the development’s financing by approving a community improvement district, industrial revenue bonds and a 10-year, 100 percent property tax abatement on the lofts portion of the project.

The community improvement district would add a 1 percent sales tax on purchases made within the development to help offset some of the development costs. Floodman acknowledged that the sales tax may generate as little as $25,000 a year, but “they all add up.”

The developers still must get the project approved by city planning and zoning officials, and the land will not transfer to them until they get those approvals.

Floodman said construction would take about 12 months, but he didn’t have a firm timetable of when it would start.

City Attorney Ron Shaver explained that the largely symbolic sales price reflected the city’s interest in getting the land on the tax rolls and generating additional development.

“It’s overall beneficial to our economy downtown,” Shaver said.

---

In other business:

▪ The council voted 5-1 to approve spending $1.3 million to renovate an office building at 135 S. Kansas Ave. for the city’s information technology department. The IT department is being forced to leave its offices in the old City Hall at 100 Santa Fe St. to make way for the county courthouse construction.

▪ Council members deadlocked 3-3 on the proposed rezoning of 38.9 acres near 167th Street and U.S. 169 in south Olathe to allow a 544-unit apartment complex, meaning the rezoning request failed. City planning staff and planning commissioners had recommended against the project because it was proposed for an area designated in the city’s land-use plans for commercial and light industrial uses and a residential development would be isolated.

But Councilman Larry Campbell argued it could be years before that area is developed while the apartment complex was ready now.

▪ The council also held a public hearing on the proposed creation of a community improvement district for the Olathe Station shopping center at the corner of South Strang Line Road and South Strang Line Court.

The district would add a 1 percent sales tax to purchases within the district to help pay for the planned $25.8 million facelift to the storefronts and replacement of some buildings in the shopping center.

Resident Dave Smith told the council that he disagreed with providing tax incentives for an area that he said will likely be redeveloped anyway. Such efforts, he said, should be restricted to “blighted” areas of the community.

Smith also said he worried the additional sales tax could hurt businesses already struggling to compete with online retailers and wondered how the changes would affect thriving businesses like Cosmic Jump, an indoor trampoline park.

▪ The council also voted unanimously to increase the city fine for seat belt violations from $10 to $30 to comply with a new state law. The extra $20 goes to a state program that teaches children about using seat belts.