Northern Olathe could soon be home to a special incentive district designed to encourage tourism and entertainment development.
On Tuesday, the Olathe City Council, as part of their consent agenda, will vote on setting a public hearing required to establish a Sales Tax and Revenue, or STAR, bond district.
The district, if ultimately established, would comprise roughly 132 acres near 119th Street and Renner Boulevard in the area known as Olathe Gateway.
What are STAR bonds?
- STAR bonds, first authorized in 1993 in Kansas, are designed to support development that will spur “major entertainment or tourism destinations,” according to the Kansas Department of Commerce.
- The debt accrued from the bonds issued to develop a project — along with interest — is then meant to be paid back over time with state and local sales taxes from businesses, including retail and dining, within a project’s boundaries.
- With tourism in mind, projects supported by STAR bonds are supposed to attract at least 20% of their visitors from out of state and 30% of their visitors from at least 100 miles away.
- STAR bond districts are usually in effect for 20 years, and in larger municipalities, have minimum investment and annual sale projection thresholds of $75 million.
- Prominent Johnson County developments that are backed by STAR bonds include Prairiefire and Bluhawk, both in Overland Park.
- In Wyandotte County, the Kansas Speedway, Children’s Mercy Park and the U.S. Soccer Training Center are all STAR bond projects.
- Find a full list of Kansas’ STAR bond projects as of 2023 here.
What’s in Olathe’s proposed STAR bond district?
The STAR bond district proposed in Olathe near 119th and Renner would be divided into two project areas.
One would be located southwest of the intersection and span a little more than 63 acres. The second would be northeast of the intersection and cover just shy of 69 acres.
The project area southwest of the intersection is largely undeveloped, aside from a small slice cut out for the existing Olathe Firehouse No. 2.
Parts of the second project area northeast of 119th and Renner are undeveloped, but it does contain the Subaru of Olathe dealership and some other commercial spaces west of Cherry Street.
According to city documents, the district could feature “some or all of the following uses:”
- An athletic complex for youth sports
- An athletic complex for professional sports
- An amusement park
- Retail and restaurants
- General commercial development
- Hotels or residential development
- Amenities for patrons who are disabled
- Visitor amenities
In addition to the STAR bonds, city documents suggest the unnamed developer may also request other incentives, including tax increment financing, the formation of a transportation development district and tax abatements.
Next steps:
- If the city council approves the public hearing notice Tuesday, the city will hold a public hearing on Sept. 17.
- Down the line, the city council would also need to consider approving an ordinance actually creating the incentive district.
- Olathe would also need to green-light a project plan and a development agreement for the district.
- The Kansas Secretary of Commerce would also need to sign off on a new STAR bond district.
- Any other local development incentives this developer may request would require approval from the city council as well.
Keep reading: Prairiefire in Overland Park defaults on bond debt repayment
