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Critics: Forget sales tax — developers should pay for renovation of West Market Shopping Center

MDDS Development LLC and West Olathe Investments LLC hope to remove a gas station on the West Market Shopping Center’s southern end. The gas station would be replaced with a Starbucks.
MDDS Development LLC and West Olathe Investments LLC hope to remove a gas station on the West Market Shopping Center’s southern end. The gas station would be replaced with a Starbucks. AP

A plan to use public incentives to renovate the West Market Shopping Center in Olathe is receiving criticism from neighbors who say the developers should foot the bill themselves.

During Tuesday night’s City Council meeting, a handful of residents spoke against creating a community improvement district for the center at the southwest corner of Santa Fe and Parker streets. If the district is approved, the city would impose a special 1 percent sales tax on purchases within the center to reimburse the developers for part of the estimated $8.5 million in planned renovations.

“We’ve got a sales tax for parks, we’ve got a sales tax for street maintenance and now we’ve got to build a courthouse with sales tax,” said Bob Tully. “There comes a point in these things when somebody needs to stand up and say no.”

MDDS Development LLC and West Olathe Investments LLC are wanting to replace the roofs of the 1980s-era buildings as well as update the shopping center facades, resurface the parking lot, install new LED parking lot lights and landscaping, create new signs and remove a gas station on the center’s southern end. The gas station would be replaced with a Starbucks while a large liquor store on the northern end would be replaced with a series of restaurants, including a Chipotle, and added patio space.

Residents questioned the need for the public incentives, noting that the center, anchored by the McKeever’s Price Chopper grocery store, is mostly full and that the former owners updated the facades within the last 15 years. Instead, they accused the city of using tax money to help national chains establish locations that would compete with existing businesses.

For example, a Scooter’s Coffee is already operating across the street from the location of the proposed Starbucks and Chipotle will operate in the same shopping center as Mexican restaurant El Mariachi.

“If something doesn’t add value (to the city) then it’s probably unnecessary for the city to perform,” said Adam Michelson, who said he lived about two miles away from the center.

Michelson added that the sales tax is estimated to reimburse the developers $2.8 million over 15 years, or almost 33 percent of the project’s total, which he said seemed high.

Melvin Harrelson said he objected to a plan that would increase sales taxes on groceries, which he said already were close to 10 cents on the dollar.

“Taxing more on groceries hurts those who can least afford it,” Harrelson said.

The plan had its defenders as well. Jim Bulger, who owns the True Value hardware store in the shopping center, said the renovations were necessary and would help many of the small merchants.

“I’m not for taxes, but I do think that there are times that if these things are done for other locations, for other people, for other big businesses, that they probably ought to be done for some of the small people, too,” Bulger said.

Developer Drew Snyder disagreed that the reimbursement rate was too high and said that including the $14 million he paid for the property, the district sales tax would reimburse only 12 percent of his costs. He said adding Starbucks and Chipotle, as well as updating the center’s look, would draw traffic from a wider area, which would help all the businesses.

“With the grocery store’s sales declining over the last three years, we want to change that trend,” Snyder said. “We think this is a great opportunity.”

The council plans to vote on the improvement district later this year.

Councilwoman Karin Brownlee said she was trying to balance the concerns voiced by the public with the needs for economic development.

“Brick-and-mortar retail is in a tough spot today, and I think we want to keep it vibrant in Olathe because it’s an important part of our economy,” Brownlee said.

In other business, the council reviewed updated plans for the $19 million Indian Creek Library being planned in the 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. Parts of the surrounding parking lots would be turned into grassy areas or tree-lined corridors, and the building’s entrance, which faces west, would be shielded from the sun with a wall of reflective panels designed to resemble tree leaves, water ripples or the pages of a book.

Architecture firm Gould Evans plans to complete its designs by the end of the month. If all goes to plan, construction would begin in August and the library would open in September 2019, said Jeff Blakeman, a project coordinator for the city’s public works department.

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.

David Twiddy: dtwiddy913@gmail.com

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