Focus Area: Legal
Staff Contact: Ron Shaver
Subject: Public hearing and ordinance regarding adoption of a STAR Bond Project Plan and Development Agreement for the Olathe Gateway Project in the vicinity of 119th Street and Renner Boulevard.
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Public Hearing and consideration of Ordinance No. 24-49 adopting a STAR Bond Project Plan for Project Area 1 of the Olathe Gateway STAR Bond Project District pursuant to K.S.A. 12-17,161 et seq. and approving a Development Agreement for the Olathe Gateway Project.
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Summary:
On September 17, 2024, the City Council adopted Ordinance No. 24-35 establishing a STAR Bond Project District and approving a STAR Bond Project District Plan. The District was created to promote, stimulate and develop the general and economic welfare of the state of Kansas and the City as a “major commercial entertainment and tourism area” containing a “major multi-sport athletic complex” in accordance with the Kansas STAR Bond Act, K.S.A. 12-17,161 et seq. (the “Act”).
Staff, along with the City’s bond counsel, Gilmore & Bell, P.C., has worked with the developer of the proposed STAR Bond Project, Loretto Commercial Development, LLC, to prepare a STAR Bond Project Plan (Attachment A). On October 14, 2024, the Planning Commission made a finding that the proposed Plan is in conformance with the Comprehensive Plan of the City.
The Project Plan may be described in a general way as a mixed-use development consisting of some or all of the following uses:
a multi-sport athletic complex for both professional and youth sports uses and events, entertainment uses, including an amusement park, retail uses, restaurant uses, and other general commercial development; hotel uses; residential uses, including multi-family residential facilities; visitor amenities and accessibility improvements and amenities for disabled visitors; and associated streets and other public and private infrastructure.
The Project Plan to be considered by the Governing Body at the public hearing includes, but is not limited to: (a) a summary of the feasibility study required by the Act; (b) a reference to the District Plan; (c) a description and map of the Project Area; (d) the relocation assistance plan as required by the Act; and (e) a detailed description of the buildings and facilities proposed to be constructed or improved within the Project Area.
On October 15, 2024, the City Council adopted Resolution No. 24-1056 calling for tonight’s public hearing considering the approval of the STAR Bond Project Plan.
On November 12, 2024, the Kansas Department of Commerce (“KDOC”) provided the City a letter (Attachment B) in which the following actions related to the Olathe Gateway STAR Bond Project were taken:
(1) found and determined that the Gateway Project includes a “major commercial entertainment and tourism area” and a “major multi-sport athletic facility” and is an “eligible area” within the meaning of K.S.A. 12-17,165.
(2) approved the STAR Bond District Project Plan and designate the Gateway Project as a “STAR bond project” within the meaning of K.S.A. 12-17,162(aa); and
(3) approved the issuance of “up to” $65,000,000 (exclusive of approved financing costs) in STAR bond financing for the Gateway project.
The ordinance (Attachment C) adopts the STAR Bond Project Plan and approves the Development Agreement (Attachment D) for the Olathe Gateway Project.
Also on tonight’s agenda, the Governing Body will consider creation of a Community Improvement District (CID) and adoption of an amended Tax Increment Financing (TIF) Area 2 Project Plan for the Olathe Gateway Project.
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Financial Impact:
As stated in the KDOC letter, “the proposed financial structure includes “up to” $65,000,000 of net STAR Bond financing, which is 20 percent of the over $320 million in total project costs for the development. The City has satisfied the [KDOC] policy that STAR bond applicants pledge all available sales tax revenue generated within the STAR Bond Project District to repay STAR bonds used for the Gateway Project as well as 100% of its share of county sales tax. Further, the City and others are investing over $240 million in the Gateway Project, which represents a true public/private partnership benefiting the region and the state. The feasibility study that was commissioned by Commerce reflects that the Gateway Project is a unique travel destination that will attract visitors from throughout the country. The amusement park and the multi-sport athletic complex are projected to bring over 600,000 visitors annually and of those visitors approximately 37% are originating from outside of Kansas. Accounting for unique visitors, the multi-sport athletic complex and the amusement park are each expected to draw over 25% of visitors who originate from a community more than 100 miles away. The feasibility study further demonstrates that the Gateway Project will generate significantly more sales tax revenue over the life of the bonds than is necessary to support the “up to” $65,000,000 net proceeds STAR bond issue. The total economic impact of the Gateway Project businesses and their employees on the area economy is substantial, including over 1,200 direct full-time jobs with over $68 million in annual payroll. At build out, the Gateway Project is forecast to generate annual retail sales over $130 million.”
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Action Needed:
Approve Ordinance No. 24-49 adopting a STAR Bond Project Plan for Project Area 1 of the Olathe Gateway STAR Bond Project District pursuant to K.S.A. 12-17,161 et seq. and approving a Development Agreement for the Olathe Gateway Project.
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Attachment(s):
A: STAR Bond Project Plan
B: STAR Bond Project Plan KDOC Approval Letter
C: STAR Bond Project Plan ordinance
D: Development Agreement