Developer accuses Olathe Schools, city of misusing eminent domain in land deal
.jpeg "Heatherstone Elementary, above, is among Olathe’s schools.")
AI-generated summary reviewed by our newsroom.
- Lawsuit alleges misuse of eminent domain to aid private development deal.
- Cherry Park alleges it offered $1.75M plus in cost-sharing, higher than CB Holdings' deal.
- Suit seeks to block eminent domain action, void district’s agreements with CB Holdings.
A local developer has filed a lawsuit accusing Olathe Public Schools and the city of Olathe of misusing eminent domain powers to benefit a private real estate deal under the guise of a public project.
Cherry Park Properties LLC filed the suit in Johnson County District Court last month, claiming that it offered a higher purchase price for the district-owned land. But its offer was ignored when the school district ultimately showed preferential treatment to local developer Clay Blair, the suit alleges.
The lawsuit claims the school district and city are trying to force an easement across Cherry Park’s property, which sits near the school-owned land, to help finalize Blair’s purchase.
“This case is about the misuse of governmental power to salvage and advance a private land sale transaction by turning the City of Olathe’s eminent-domain authority into closing leverage for a single private purchaser,” the suit reads.
Both the city of Olathe and Olathe Schools declined to comment on the lawsuit.
The Olathe land in question
The suit focuses on two adjacent pieces of land in Olathe, near 143rd Street and Lake Olathe.
The first is Cherry Park’s property which sits just east of some land owned by the school district, part of the Lakeshore Ridge Subdivision.
The second piece of land is around 79 acres total owned by the school district on the north side of Lakeshore Drive and Cedar Niles Road.
According to the lawsuit, the school district entered into a contract in 2022 to sell the land for around $1.43 million to CB Holdings LLC, whose managing partner is Clay Blair.
Cherry Park alleges in its suit that the agreement violated terms approved by the school board at the time. The contract was also extended and altered without proper authorization from the board, the suit alleges.
Cherry Park claims it offered $1.75 million for the land, plus infrastructure cost-sharing, allegedly worth $1 million more than the deal with CB Holdings. Cherry Park claims the school district misled them during negotiations and did not act in the best interest of the public by ignoring a higher-value offer for taxpayers.
Alleged preferential treatment
The suit makes a wide swath of claims framing the agreement between the district and CB Holdings as a backroom real estate deal involving public land with a well-known developer.
The petition details a history of real estate transactions between the district and Blair dating back to 2011 suggesting a “non-arms length relationship” and preferential treatment.
In September 2011, Prime Development LLC, an entity owned by Blair, bought a 16,000 square foot building from the district, according to the suit.
In June 2013, school board documents Blair purchased 79.02 acres of land at $4.8 million, the suit says. In June 2016, the district allegedly received a gift of 3.6 acres of real estate near 119th Street and Sunnybrook Boulevard from Blair.
In September 2019, Clay Blair’s Prime Development bought 35.4 acres of land at the northeast corner of 95th Street and Monticello Road for $1.43 million, the suit says.
And in August 2021, the school board approved a purchase and sale agreement from CB Holdings for 10.86 acres and some buildings on North Rogers Road for $5 million, the suit says.
Misuse of eminent domain claim
The dispute also centers on sewer access needed for the development of the land sold to CB Holdings.
The contract with CB Holdings is an example of eminent domain being used as leverage for private development, the suit alleges.
According to the suit, the district’s contract was amended to say that CB Holdings’ obligation to close the deal was “contingent upon sanitary sewer utilities being available or the City of Olathe committing in writing to future installation of sewers, and at a cost acceptable to Buyer, all subject to the satisfaction of Buyer in Buyer’s sole discretion.”
The lowest cost route for a sanitary sewer line to the land CB Holdings intends to purchase runs directly through Cherry Park’s property, according to the suit.
The school district sought to obtain an easement, potentially through condemnation, to satisfy the buyer’s requirements, the suit alleges.
Cherry Park is asking the court to block any eminent domain action and void underlying agreements between the district and CB Holdings.
According to court records, Olathe Schools was issued a summons on Tuesday. No hearings are yet scheduled in the case.
