Olathe clears way for Hunt family-backed entertainment complex, with millions in tax incentives

Olathe’s proposed $320 million “ultra-accessible” special incentive district near 119th Street and Renner Boulevard featuring a 5,000-seat multisport complex, an amusement park, shopping and a medical facility for individuals with disabilities is moving forward.

On Tuesday, the Olathe City Council voted 6-0 to approve the first Sales Tax and Revenue, or STAR, bond district project plan. The city council also gave the green light to establish concurrent local incentive districts that overlap with the Olathe Gateway area, 6-0 in two separate votes.

All three items passed through the city council with relative ease, and public hearings for the incentives garnered little attention, with a single speaker voicing support for the project.

Mayor John Bacon was complimentary of the project, describing this sort of development in the Olathe Gateway district as “long awaited.”

“This is a vision we had for the area early on,” he said, noting other developments in the area.

The application for the district came from Loretto Properties, a KC-based development firm run by Lamar Hunt Jr. and his son-in-law James Arkell.

Councilmember Matthew Schoonover was absent from the meeting.

Developer has requested up to $105 million in incentives

For this project, the Kansas Department of Commerce has approved a maximum of $65 million in STAR bonds, which Olathe City Attorney Ron Shaver said is expected to be easily paid back, given the estimated annual sales valued at $130 million.

In addition to the STAR bond district — a state-level incentive structure — the developer has requested the formation of a 1% special sales tax through a Community Improvement District. That could generate an additional $10 million in reimbursement to the developer to pay back some expenses.

Plus, Loretto is requesting approval to include the STAR bond project plan in an existing Tax Increment Financing, or TIF, district established in the area in 2006. TIF districts work by turning over tax revenues earned from increased property value to a third party to cover or reimburse costs incurred in a defined development area for a set amount of time. Up to $29.3 million could be reimbursed through the TIF district.

All told, Loretto could receive nearly $105 million in total public incentives for this development.

What are STAR bonds?

STAR bonds are designed to support development that will spur “major entertainment or tourism destinations,” according to the Kansas Department of Commerce.

The debt accrued from the bonds issued to develop a project — along with interest — is then meant to be paid back over time with state and local sales taxes from within the project’s boundaries.

STAR bond districts are usually in effect for 20 years.

What happens next?

Kaylie McLaughlin

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Johnson County Post

There are still several hurdles to clear before this project is a reality, including the formal issuance of the STAR bonds.

Additionally, the development is currently working its way through the Olathe planning process, requiring at least a zoning amendment and site plan approvals.

If all goes according to plan, construction could begin on the first project area as soon as summer 2025.

That first phase — which includes the amusement park, sports complex, retail, etc. — is expected to open sometime in 2026. Representatives from Loretto have suggested it would be in time for the World Cup.

Any additional financing tools or development plans for the second project area in the official STAR bond district (located at the northeast corner of the intersection) would require further discussion and more city council votes.

This story was originally published by the Johnson County Post.