A Johnson County developer has sued both Olathe Public Schools and the city of Olathe, accusing them of abusing eminent domain powers to help the school district sell land to another preferred private developer.
In a suit filed last month in Johnson County District Court, developer Cherry Park Properties alleges that the district, through the city, used eminent domain to acquire easements on its property for a sewer line to help the district sell nearby land to developer CB Holdings, which is owned by Clay Blair, a prominent civic leader and donor to area causes, including Olathe schools.
In court documents, Cherry Park argues that the acquisition of its land serves a private buyer and not the public, which it says is an illegal use of the eminent domain power.
Eminent domain is the legal process that allows government entities to acquire private property for public use, as long as the owners receive just compensation in exchange.
In this case, the city — and not the school district — has eminent domain authority. Cherry Park’s lawsuit essentially casts the city as the district’s conduit for acquiring land to complete a real estate deal, amounting to an illegal delegation of the city’s eminent domain power.
Cherry Park also alleges that district officials worked without oversight of the Olathe Board of Education and gave preferential treatment to CB Holdings behind closed doors.
Cherry Park is asking a judge to issue a temporary injunction to stop the condemnation of the land and declare the district’s agreement with CB Holdings invalid.
The city of Olathe, the city’s outside counsel, Olathe Public Schools and members of the board of education all would not comment to the Post for this story.
Neither Cherry Park’s legal counsel nor CB Holdings responded to the post’s request for comment.
Background
The dispute centers on roughly 80 acres of land off 143rd Street in western Olathe that the district bought in 2004 for a future school.
The land shares a partial border with 20 acres that Cherry Park purchased in 2019 for a residential development, according to court documents.
In December 2021, the Olathe school board approved selling 65 acres of its land for about $31,410 per acre. The district planned to keep the remaining 15 acres of the original property for the future school.
Cherry Park alleges that the district, for roughly two years, privately solicited bids for its property rather than listing the land publicly. Cherry Park, despite developing adjacent land during this same time period, was never approached, the lawsuit says.
The lawsuit alleges district officials ultimately signed a contract in 2022 to sell 65 acres of its land to CB Holdings for $1.43 million, or about $22,000 per acre, a lower deal than what the board approved in December 2021.
CB Holdings is owned by Blair, who was the 2021 Johnson Countian of the Year and former Chairman of the Kansas Board of Regents. The lawsuit also documents five previous real estate transactions, dating back to 2011, between Olathe Public Schools and CB Holdings.
According to the lawsuit, CB Holdings would use the land sold by the district and adjacent to Cherry Park’s property for a housing development.
Cherry Park, which is developing nearby land for its own residential development, says it wasn’t informed that the district was selling its land until August 2023.
Cherry Park asked about buying the land itself and was encouraged by district officials to submit an offer. At that point, however, they were still unaware of the district’s alleged deal with CB Holdings.
Cherry Park said the sewer line easement would require the taking of three of its lots, which would lead to hundreds of thousands of dollars in financial losses.
Even so, they were willing to discuss it while they worked toward a deal in purchasing the land.
Cherry Park then attempted to purchase the district’s land itself and ultimately submitted a higher offer than CB Holdings in January of 2024, the lawsuit says.
Court filings assert that the contract between CB Holdings and the school district expired on Oct. 1, 2024, and that officials attempted to revive it only after Cherry Park submitted its superior offer.
Lawsuit says school board was illegally bypassed
A key part of the lawsuit is that Cherry Park asserts district officials were working largely behind the board’s back.
According to the lawsuit, Cherry Park’s offer was never presented to the school board.
Cherry Park alleges that district staff entered into contracts that differed from what the board approved and failed to present competing offers to the board.
The lawsuit argues those actions make the agreements to acquire the land invalid.
Instead, Cherry Park alleges district officials, namely Chief Financial Officer John Hutchinson and district planner Christopher Gralapp, continued working toward closing the deal with CB Holdings, effectively giving the developer preferential treatment and bypassing the school board.
Dispute over sewer line
According to the lawsuit, CB Holdings told the district that the sale was contingent on sewer access. The most direct and least expensive route would run through Cherry Park’s adjacent property.
Cherry Park asserted in its lawsuit that the school district approached them about acquiring part of their property for a sewer line. But the lawsuit alleges that Olathe Public Schools didn’t disclose a pending agreement with CB Holdings. Instead, the request was framed as related to a future school.
Court filings say that was misleading, arguing the district wouldn’t need a sewer line through Cherry Park’s property to serve a school site. It alleges the district only wanted the land to complete the deal with CB Holdings.
The company says it was offered a small payment for the easement, but it was below the cost of the impact the sewer line would have.
In 2024, after negotiations stalled between the district and Cherry Park about purchasing the easement, Olathe Public Schools entered into an agreement with the city of Olathe to acquire the necessary easement through eminent domain.
Cherry Park argues that the sewer easement is not proper use of eminent domain.
Instead, the lawsuit says that the acquisition of the easement is primarily intended to support a housing development by a private company, not a public project.
The filing also alleges the city did not independently determine if the easement served a public need or was just part of the sale.
What’s next
According to court documents, the city has taken steps toward acquiring the easement.
In November, the Olathe City Council approved the survey of Cherry Park’s property for the proposed sewer line.
The resolution’s summary says, “Land acquisition negotiations are ongoing. The project is tentatively scheduled to begin construction in mid-2026.”
Cherry Park is seeking a temporary injunction that could halt the condemnation of the disputed land while a judge hears the case.
