The Olathe City Council has approved almost $3 million in public assistance for developers renovating the West Market shopping center.
Council members voted 5-0 to approve creating a community improvement district for the site at the southwest corner of Santa Fe and Parker streets. The district will add a special 1 percent tax on all sales within the shopping center for up to 15 years to reimburse the developers $2.8 million for certain expenses.
MDDS Development LLC and West Olathe Investments LLC plan $8.5 million in renovations at the 1980s-era center. While the projects include extensive improvements to the center’s parking lot, building facades and roofs, most of the money will go for replacing a large liquor store on the northern end of the center with a number of restaurants, including a Chipotle, and removing a BP gas station on the south end of the center and replacing it with a Starbucks.
Removing the gas station will also include any environmental work necessary to deal with the gas station’s underground fuel storage tanks.
Casey Wilhm, vice president for business development at the Olathe Chamber of Commerce, praised the project, saying it will keep a vital retail center from faltering.
“We believe the proposed revitalization and retenanting of West Market shopping center should do nothing less than spark similar quality retail redevelopment up and down the west Olathe corridor,” Wilhm said.
A number of nearby residents had criticized the public incentives during the City Council’s May 1 meeting.
Among their concerns was that the tax would increase prices at the McKeever’s Price Chopper grocery store, which anchors the center, and that the incentives would help national chains like Starbucks and Chipotle compete with established nearby coffee shops and restaurants. They also noted that the center has few vacancies and that the tax would repay a third of the developer’s redevelopment costs.
Drew Snyder, one of the developers, told the council that the national chains would draw more customers to the area, which should help all nearby businesses, and that the $8.5 million project cost doesn’t include $14 million the developers paid for the property.
Council members said they appreciated the concerns voiced by the residents but that they felt the incentives were the best option.
“Whether the development gets it this way, whether they increase rents and then that retailer passes it on to the customer, eventually we all pay one way or the other,” said Councilman Larry Campbell. “In my mind, this is the perfect way to finance something.”
In other business, the council approved development incentives for Bedrock Concrete LLC, which plans to add new buildings at 19968 W. 157th St.
The company has requested the city to issue $6.5 million in industrial revenue bonds and grant a 10-year, 50 percent property tax phase-in for a proposed 34,440-square-foot warehouse and distribution center. Taxpayers are not responsible for paying back the bonds, which developers frequently request local governments to sell because they grant certain tax and interest benefits.
Bedrock says the facility will generate 165 new jobs over the next 10 years with an average salary of between $45,760 and $52,000.
The company is expected to request an additional $10.5 million in industrial revenue bonds for other projects under a master agreement with the city.
The council also approved $19 million in funding to build the Indian Creek Library branch in a former Hy-Vee grocery store at 16100 W. 135th St. Once completed, the library will take up 47,000 square feet with separate sections dedicated to adults, children and teens, a maker space, a café and an event space with room for up to 240 people.
The original Indian Creek branch at 127th Street and Black Bob Road has remained closed since March 2016 when a water line ruptured and caused extensive flooding and erosion damage.
Construction is expected to begin in August with the new library branch opening in September 2019.
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