In a rare discussion of a city redevelopment deal, Johnson County commissioners declined last Thursday to challenge tax increment financing for the Rosebud Plaza Shopping Center in Olathe.
The Olathe City Council recently gave the go-ahead to start negotiating an incentive package for the $26 million development at the northeast corner of Santa Fe Street and Mur-Len Road.
The developer has proposed a maximum $7 million reimbursement from a TIF in the area, possibly with a Community Improvement District — another type of incentive — to be added later.
The shopping center was formerly anchored by a Hobby Lobby, which moved out in 2018. Since then, the complex has become run down.
What’s planned for Rosebud?
The plans, as they stand, propose renovating the shopping center’s existing components, building some new space and upgrading the infrastructure, including the parking lot.
QuikTrip and a new pickleball-focused entertainment venue are some of the potential users who have already signed on to move to the shopping center.
David Christie, who recently acquired the bulk of the property, also told the city council that Westlake Ace Hardware has signaled plans to relocate to the site when upcoming work on Interstate 35 and Santa Fe forces them out of their current home on Clairborne Road.
Though Olathe started the process of forming the TIF district earlier in September, it’s not necessarily a done deal. The city council still has to vote on a forthcoming 20-year project plan for the site and a development agreement.
Why did the county weigh in?
Tax increment financing deals use the increased revenues from property values in the area to pay some development costs. Since that also affects the county’s ability to collect its share, state law allows the county to challenge a city TIF.
The county commission regularly gets notice when cities approve tax incentive packages, but it’s unusual that they consider using their veto power.
Typically, commissioners note the incentive packages without discussion. But commissioners Michael Ashcraft and Charlotte O’Hara have often expressed concerns about the financial impact of the delay in collecting revenues and doubts about whether they are really needed by developers.
Ashcraft asked for a discussion of the Olathe project, along with the development of a comprehensive engagement policy with cities on future incentives.
The commission’s discussion
On Thursday, the majority was reluctant to create a policy because of the lack of data and stakeholders in the room. Commissioner Jeff Meyers also said such a policy might stagnate business and the development process.
So commissioners narrowed the focus to the Rosebud shopping center.
Ashcraft noted that because the county is uninvolved in the TIF-creating process, it is difficult to assess how much of an impact the incentives could have.
Ashcraft agreed with others that the Rosebud complex is in bad shape and might, in the right circumstances, require more government involvement. But he said other redevelopment in the area could indicate opportunism rather than need.
“This is not an intent to force anything upon the cities,” he said. “We’re not trying to tell them what to do. I’m just simply suggesting we should have a policy to be at the table to encourage discussions and considerations and understand how it might impact the county.”
Ashcraft asked for the issue to be remanded to the city or vetoed.
However, other commissioners said it was unclear what the financial impact would be.
Commissioner Shirley Allenbrand noted the buildings and parking lot in the area are in bad shape, making it difficult to keep tenants.
Commissioner Charlotte O’Hara said tax increment financing districts and industrial revenue bonds have diverted millions in property tax revenue from public coffers. Most of those projects would go forward even without the incentives because Johnson County is a desirable business locale, she said.
“Unfortunately, our corporate welfare is based on economic fascism,” that came from Italy in the 1920s and 1930s and later to the United States with President Franklin Roosevelt, she said, “and it has just continued to fester and grow.”
Commissioner Janeé Hanzlick said the commission should “step lightly on issues of local control.”
“While I don’t disagree with some of the concerns, I know that we don’t like it when the state comes in and tells us what we have to do,” she said. “We need to be very careful that we aren’t stepping into the cities’ statutory obligations.”
The commission voted down Ashcraft’s motion to remand or veto the Rosebud TIF by a 5-2 margin, with Ashcraft and O’Hara the dissenting votes.
Kaylie McLaughlin contributed to this report.
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