Olathe considers TIF for future development proposal

The developer of 102 acres in northeast Olathe has asked the city to create a tax increment financing district to prepare the land for future redevelopment.

West Star Development has not provided any firm plans for the land, which is currently the site of the Ridgeway Marketplace shopping center at S. Ridgeview Road and W. 106^th Street south of Kansas 10 Highway.

The City Council on Tuesday voted to schedule a public hearing on Dec. 20 to receive comments from residents on whether the planned district is needed. It was included in the council’s consent agenda, which is generally voted on without discussion.

After the meeting, City Attorney Ron Shaver said city officials are actually pushing the tax increment financing district in hopes of attracting a development “of communitywide significance” on most of the long-vacant tract.

In tax increment financing, or TIF, the city can capture future gains in property, sales or other taxes generated by a redeveloped piece of property and use them to help pay off some of the developers’ costs.

Typically, they are accompanied by a detailed development plan explaining what the developer is planning and what types of expenses the revenue generated by the TIF district will pay off.

In this case, Shaver said the city is waiting for such a project to come along. Meantime, he said the city wants to approve the TIF district for the Ridgeview land before the end of the year to “lock in” its current property value, thereby making a future TIF more valuable.

“This is a prospective action,” he said. “If we ultimately decide it’s not worthwhile, then we dissolve the district and another project happens.”

He said the city created a similar TIF district in 2003 covering retail space at Ridgeview Road and Santa Fe Street, but no one has sought to redevelop the area.

The proposed TIF district comes as the city is also considering two other development incentives in parts of Olathe.

The council held a public hearing Tuesday night for a Neighborhood Revitalization Act plan proposed for 180 acres west of Kansas Highway 7. The plan would provide a 10-year, 80 percent rebate on any incremental increase in property taxes paid by owners of commercial or multifamily residential property within the plan area who spend at least $10,000 on improving their property and see their property values rise at least 10 percent.

No member of the public spoke during the hearing. Shaver said the city will vote on creating the plan area next month.

The council is also scheduled to hold a public hearing on Dec. 6 to consider creating a 260.5-acre STAR bond district around the site of the former Great Mall of the Great Plains.

STAR bonds allow developers to use local and state sales taxes generated by a redeveloped property to pay off half the debt on the project. However, the project must be a tourism development expected to draw visitors from at least 100 miles away.

City officials have said they had no plans for the STAR bond district but want to establish it before the state law allowing STAR bonds expires next summer. State lawmakers are not certain to renew the legislation following complaints about how the program is managed.

Other business

The council approved the sale of $6.16 million in general obligation bonds, which Olathe will use to buy almost 4,300 city streetlights from Kansas City Power & Light. Part of the money will also go to retrofit many of the lights with LED lamps, which use less electricity and last longer. City officials said they can operate the lights for cheaper and, using those savings, pay off the bonds in four years.

This story was originally published November 18, 2016 at 11:31 AM with the headline "Olathe considers TIF for future development proposal."