Developers of Lone Elm Commerce Center request $121 million in incentives

A little more than a month after getting approval for the new Lone Elm Commerce Center in Olathe, the industrial park’s developers are asking for almost $121 million in public tax incentives to help build it.

The City Council on Tuesday received a report on the request from 167 Street Land LLC for the city to issue industrial revenue bonds to pay for developing the 122-acre site on the north side of 167th Street, a half-mile west of Lone Elm Road.

The developers also want a 10-year, 50-percent reduction on the complex’s property taxes.

Under the development plan approved in early September, the company led by commercial real estate agent Rob Heise envisions an eight-lot complex of warehouses and distribution facilities encompassing 1.9 million square feet.

The project would be completed in phases governed by a master resolution. The first phase would require $13.9 million in industrial revenue bonds to build a 210,000-square-foot distribution warehouse northwest of where 167th Street is expected to connect with a planned Monticello Road.

The developers, and not city taxpayers, are responsible for paying back the industrial revenue bonds. Developers typically buy the bonds through a local government to gain certain tax and interest-rate benefits.

While 167 Street Land LLC said in documents that it hasn’t identified a tenant for the building, it’s estimated the first phase will create 76 new jobs during the next 10 years with an average salary of $28,000 in the first year increasing to $43,437 by the end of the period.

There were no estimates for job creation for the entire development.

Council members did not discuss the proposal, which is scheduled to return before the council Nov. 7 for a public hearing.

In other business, the council approved issuing $16.5 million in industrial revenue bonds to help build a 231,000-square-foot distribution warehouse facility on 17 acres at the 56 Commerce Center industrial park.

While documents do not provide details on potential users of the buildings, the owner, OPUS Development Company LLC, said the distribution warehouse would create 132 jobs during its first 10 years. It also is receiving a 10-year, 50-percent property tax abatement for the project.

“This is a very exciting expansion of a very new industrial park that hasn’t even had its first tenant move in yet,” Mayor Michael Copeland said.

Representatives for OPUS said construction has started on the warehouse, which is expected to be completed by May.

The council also took a second look at plans for a second phase to Lone Elm Park, at 21151 W. 167th St.

City Parks and Recreation Director Michael Meadors detailed changes to the park, which was built in 2003 with eight soccer fields and five softball fields and regularly hosts youth tournaments. The key upgrades would be the addition of permanent bathrooms to replace the current use of portable toilets at the soccer fields along with replacing the softball complex’s septic system with a connection to the nearby sewer system.

Council members last month raised questions about the project’s $3.1 million price tag — which also includes adding parking, a shelter, a restroom for a picnic area, and a large-scale playground. Meadors said Tuesday that $2.7 million already has been set aside from a  1/8 -cent city park sales tax, which has been collected since 2007, with the remaining $400,000 coming from the current park sales tax.

The council will vote next month to approve a contract to begin final designs for the park upgrades with construction expected to begin next year.

Council members also signed off on initial plans for the 4.6-mile Meadowlane Trail, which consists of several new sections and will provide a 10-foot-wide asphalt path suitable for walkers and bikers.

The first new section would extend from the Stratton Oaks neighborhood north to College Boulevard, go under College Boulevard and connect with the existing trail that runs from Meadowlane Elementary School to the Kansas State Biosciences Center.

The next new section would run just south of Prairie Trail Middle School, cross Lone Elm Road then extend east to Woodland Road along power lines between Prairie Point subdivision and Mill Creek Manor.

Walkers and bikers could head south on Woodland Road on existing sidewalks and bike lanes before reconnecting with the existing paved trail running east on College Boulevard to the Gary Haller Trail.

A final new section would connect the Haller Trail with the Corporate Ridge office park on Ridgeview Road.

The entire project will cost an estimated $1.98 million, with $1.04 million coming from the Kansas Department of Transportation.

Council members decided not to include an option that would extend the trail south down Ridgeview Road to College Boulevard, a change that was expected to add $400,000 to the project’s total budget.

The council will vote on a construction contract for the trail next month.

This story was originally published October 18, 2017 at 4:35 PM with the headline "Developers of Lone Elm Commerce Center request $121 million in incentives."