Olathe Council OKs plans to revamp Great Mall site, despite competing OP project

Olathe City Council members on Tuesday signed off on a developer’s plan to request $69.5 million in Kansas state tax incentives to build a hockey arena and a mixed-use development at the former Great Mall of the Great Plains site.

The 6-1 vote came despite the concerns of at least one resident and even some of the council members themselves that the project, called Mentum, could be on a collision course with a proposed development 10 miles away in Overland Park that is also seeking more than $63 million in state incentives and would also include a hockey arena.

“I’ve spoken to a number of financiers, and they agree that only one will probably be built in Johnson County,” said Mayor Michael Copeland. “The community can’t support two.”

Both projects plan to ask the Kansas Department of Commerce to issue STAR bonds, a special incentive that helps the developers of tourism projects pay for certain development costs by allowing them to use state and local sales taxes generated on the property for up to 20 years.

The Woodbury Corporation is requesting the bonds to build a 4,000-seat arena that would serve as the centerpiece for its $318 million project at Interstate 35 and 151st Street. The development would also include more than 200,000 square feet of retail and restaurant space, offices, additional sports and entertainment attractions and 250 apartments.

Josh Woodbury, vice president of acquisitions for the Salt Lake City-based developer, told the council that the arena would provide space for minor league hockey and youth ice hockey leagues, as well as for concerts and other events.

In addition to STAR bonds, the company also plans to seek a special 1 percent community improvement sales tax, tax increment financing and industrial revenue bonds.

Woodbury said the incentives are necessary for a company like his to be willing to take the risk of redeveloping such a large space, especially when the predecessor failed so publicly.

The Great Mall of the Great Plains opened in 1997 as one of the largest shopping centers in the state but suffered from the softening of brick-and-mortar retail and closed in 2015, eventually being demolished a year later.

Woodbury said that the company’s investment in Olathe would complement the ongoing growth at the nearby Olathe Medical Center and Garmin headquarters.

“The former Great Mall of Olathe property is a quintessential example of a property in blight that can be repositioned to revitalize and enhance its community,” Woodbury said.

Meanwhile, the Overland Park City Council on Monday considered the Bluhawk development southwest of U.S. Highway 69 and 159th Street. The Price Brothers development company envisions using $63.2 million in STAR bonds to build a 3,500-seat arena for amateur league hockey and events, as well as 255,000 square feet of retail, restaurants and hotels.

The council has put off a decision on Bluhawk’s STAR bonds request until next month while it gathers more information.

During that meeting, however, residents and some council members also questioned building an arena with STAR bonds so close to another one.

A key requirement for projects seeking STAR bonds is that they will attract visitors from at least 100 miles away.

Woodbury said a feasibility study commissioned by the company estimated the arena and other programming on the site would attract more than 1.7 million visitors a year, including 580,000 from outside the area, and create more than 3,000 direct and indirect jobs.

But Olathe resident Adam Mickelson criticized that study during Tuesday’s meeting, noting that it did not consider the presence of a second hockey arena and entertainment complex so close by and shouldn’t be used to support financial incentives for the project.

Mickelson also pointed out a number of other hockey and youth sports venues already in the area, including the Silverstein Eye Centers Arena in Independence, the Kansas City Ice Center in Shawnee and the HyVee Arena in Kansas City’s West Bottoms.

In general, he said the council should not approve such a large amount of incentives for a single project, especially if there’s uncertainty of its long-term viability.

“I’m not opposed to this development as it is,” he said. “I’m opposed to it with this excessive type of funding. There is only so much appetite from the citizens to handle public funding for private-public partnerships.”

Council member Karin Brownlee shared those concerns and cast the lone “no” vote.

“I’ve heard a growing voice from the public that says we’re concerned that people with a lot of money are developing and they’re getting incentives,” Brownlee said.

Her colleagues on the council said the vote was merely a formality to allow Woodbury to send its bond application to the Department of Commerce and that they hoped to get their questions and concerns answered before having to formally approve the project and the bonds sometime next year.

“We’ve got an area that has not developed and needs help; we’ve got a company with a plan and ready to develop,” said Councilmember Larry Campbell. “We’re just saying in concept let’s keep moving forward, and that’s all we’re doing tonight.”

In other business, the council voted to authorize a $4 million fire training center to be built on the east side of Hedge Lane at Layton Drive. The center will include a “burn tower” and other structures that firefighters can use to simulate and train for fighting blazes and search and rescue operations. The Olathe Fire Department currently sends personnel to train at facilities in Platte County and Overland Park. Once up and running, Olathe’s center will likely attract fire department crews from across the region, Fire Chief Jeff DeGraffenreid said. The training center is expected to open in the first quarter of 2020.

This story was originally published December 19, 2018 at 2:06 PM with the headline "Olathe Council OKs plans to revamp Great Mall site, despite competing OP project."