A section of a mixed residential and industrial project planned in southern Olathe near U.S. Highway 169 and 167th Street could get nearly $253 million in incentives.
On Tuesday, the Olathe City Council voted 6-0 in favor of a resolution of intent that signifies the city’s plans to eventually issue the incentives and property tax abatement for the industrial section of the wider, recently rezoned Park 169 development.
The industrial side of the development spans nearly 140 acres.
Councilmember Matt Schoonover — who frequently dissents on these types of incentives over concerns that developments are falling short of certain expectations — was absent from the meeting.
Councilmember Dean Vakas voted against closing the public hearing attached to the resolution but ultimately voted in favor of the incentives.
What are these incentives for?
- Blue Springs Safety Storage South LLC anticipates constructing more than 1.5 million square feet of new warehouse and other industrial space across 13 buildings on the western side of the property.
- Those buildings will range in size from about 60,000 square feet to nearly 265,000 square feet, but their specific uses remain unclear.
- Over the next decade, the development is expected to create upwards of 1,000 new jobs, with an average starting salary of $44,000 in the first year.
- In addition to the request for bonds, the developer has also requested a 10-year partial property tax abatement.
- Currently, Olathe collects about $700 in property taxes from the property a year. After the abatement rolls off, the city could collect around $706,000 annually.
Park 169 also includes housing
- The housing section of the Park 169 development is not included in this request for incentives, but it does take up nearly half of the project’s overall footprint.
- In all, more than 700 individual housing units are planned.
- That includes a mix of townhomes, apartments, duplexes and single-family homes.
Council has previously split on incentives
Over the past several months, votes on industrial revenue bonds and associated property tax abatements for new warehouses have repeatedly passed through the city council but often notably without support from Schoonover and Vakas.
In particular, Schoonover and Vakas have questioned whether the city considers the livability of the average starting wage enough in its calculation of a project’s incentive worthiness. There have also been discussions about whether some of these developments are using sufficient green design.
Primarily, Olathe factors in property taxes and anticipated growth in valuation that would increase the city’s tax collection on a property in its industrial revenue bond formula.
Echoes of those concerns about wages and sustainability carried into the meeting Tuesday as well, albeit long after the city council authorized the resolution of intent. It came briefly toward the end of the meeting when Councilmember Marge Vogt, who is Mayor Pro Tem, inquired about city staff conversations with Olathe Chamber of Commerce officials related to potential revisions to incentive policies.
Councilmember Kevin Gilmore and other councilmembers also signaled an interest in looking at more numbers related to incentives, potentially setting a target number or dollar amount goal for a specific tool the city can use in a given time.
The annual review of incentive policies and standards Olathe uses is expected later this year, and more substantive discussions about philosophical changes seem likely this go around.
Next steps:
- The resolution of intent from Tuesday formalizes the city’s plans to eventually issue bonds, but it does not completely ensure their issuance.
- Later, the city council will have to vote on whether to issue the bonds and finalize the property tax abatement.
- Exactly when that vote would occur is unclear.
More on Olathe’s Park 169 development: Olathe OKs 250-acre project that includes housing and industrial sides
