KANSASCity.COM - June 2, 2005

Olathe plan could include Bass Pro
Retail complex financing OK'd; KC's second Bass Pro could be included

Olathe has approved a new financing plan for a retail complex that could include a second Bass Pro Shops store for the Kansas City area.

After meeting for two hours in a closed session late Tuesday, the City Council unanimously approved a plan that caps public incentives at $55 million for a proposed retail complex near Interstate 35 and 119th Street.

Reaching a deal was challenging, Olathe Mayor Mike Copeland said shortly after the deal was approved about 11:30 p.m.

As late as Tuesday afternoon, the city still was negotiating with the developers. The city’s negotiators had at least four alternative agreements for the council to consider Tuesday night.

“A project of this size and magnitude is not easy,” Copeland said.

Developers are planning to build a 625,000-square-foot retail complex in phases with the help of local tax incentives. The incentives will cover development expenses such as acquiring land, building sewers and installing streetlights.

The new agreement should clear the way for the developers to start naming tenants for the $268 million project within the next two weeks, said John Petersen, the lead development lawyer and a principal in the development team RTR LLC.

Petersen said some of the land for the retail center has been purchased, and demolition of structures is expected to begin next week. He said developers hope to open the complex by the summer of 2006.

As originally proposed, retailers were going to locate next to an 8,000- to 10,000-seat arena. But the arena was removed from the project in March because the city couldn’t make it work financially.

Petersen has not named any tenants so far, but Bass Pro has been widely mentioned as a possibility. Bass Pro already plans to open a store in Independence, but a store spokesman said recently that the hunting and fishing retailer was scouting a second location in the Kansas City area.
Bass Pro spokesman Larry Whiteley said Wednesday that the company has been interested in Olathe but said no commitments had been made. “The last I heard, we were still hoping to get things worked out,” he said.

The new arrangement approved by the city was intended to jump start the project after the Kansas secretary of commerce rejected Olathe’s request to use a special state tax incentive.

Petersen said developers still hope to get financial help from the state, but it’s unknown when, or if, that will happen.

The new plan counts on local financing. Developers can use some or all the proceeds generated by the project from the city’s 1-cent sales tax to cover some development expenses.

Developers initially asked the city for all the taxes generated by the retail project to help cover infrastructure expenses. The city balked at that proposal, which would have given the developers revenue from the city’s 1-cent sales tax, as well as from a one-eighth-cent sales tax that voters approved for parks and a quarter-cent sales tax approved for schools.

Under the compromise, the developers would have access only to revenue from 1 penny of sales tax for the project’s first phase and revenue from a half-penny of sales tax for the second phase. In no case would the developers get access to the park tax or the school tax, city officials said.

The city also agreed to allow the developers to collect an extra penny of sales tax on a separate retail project at the southeast corner of 119th Street and Blackbob Road, across the interstate from where Bass Pro might locate.

Since the same developers are involved in both projects, Petersen has said, the extra penny of sales tax for road improvements would allow them to take more of a risk in attracting a destination retailer.

Under the agreement approved Tuesday, only half the money from the extra penny of sales tax would go to the developers. The other half would go back to the city to pay for other road work.
The developers will not be allowed to collect the extra penny of sales tax until construction of the lead retailer across the street at 119th and I-35 begins.