Olathe neighborhood battling city over road improvements and who will foot the bill

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OLATHE, Kan. — An affluent Johnson County neighborhood is battling the city of Olathe over payment for road improvements. 

Residents of the Cedar Creek community, near K-7 and K-10 highways, have long awaiting expansion of Cedar Creek Parkway and College Boulevard, but they said the city is now trying to stick them with the bill.

Olathe’s board of zoning appeals met Thursday, hearing arguments over what happens next.

The Cedar Creek community in western Olathe is pristine, lined with half million-dollar homes and a private golf club. The neighborhood has ballooned to 1,400 homes and counting. As it’s grown, so has the surrounding area.

“There was nothing north of K-10. Now it’s getting fully developed,” Cedar Creek homeowner Larry Louk said.

The downside to the community is the condition of two major neighborhood roads. Cedar Creek Parkway has not been finished as a north-south corridor through the community, and on the back side of Cedar Creek, a section of College Boulevard remains narrow and some say dangerous.

“Without it being completed, we kind of don’t have the services out there we think we’re entitled to, that we need, such as a grocery store at corner of K-10 and Cedar Creek Parkway,” Louk said.

Neighbors were thrilled to learn from a city council member late last year that Olathe was looking to add College Boulevard to its capital improvement plan. Louk and Cedar Creek’s developer believe it would ultimately be a boon to the city.

“It’s going to benefit all of western Olathe. It’s going to serve other people, lots of other people beside residents of Cedar Creek,” Louk said.

“We’re talking about hundreds of millions of property tax base for the city, which would result in millions of dollars of tax revenue per year and over course of 20-year time period where roads would get amortized and paid for, those numbers in tax revenues for city could approach somewhere close to $100 million,” said John Duggan, attorney for the developer with Duggan Shadwick Doerr & Kurlbaum LLC.

But recently, homeowners learned the city was not only moving forward with College Boulevard improvements, but there may be consideration of a benefit district, which could stick homeowners with an annual bill of up to $1,000 for road improvements in the area over the next 20 years. 

The developer is suing the city in attempt to find compromise.

“Probably the fairest way to do it is for city at large to pay for half the cost of those roads and homeowners, developer to pay per square foot for the other half of those costs,” Duggan said. “We’ve been told very explicitly that probably will never happen. They won’t pay even half cost of roads, even though they’re collecting millions of dollars in property taxes out there.”

The developer said it has offered to pay an excise tax of 21 cents per square foot of development, roughly $9,000 per acre of land developed, as money that could be used for future road development.  

Thursday’s zoning appeals meeting is the next step in sorting it all out. The matter is likely still headed to court.

In a statement, the city of Olathe told FOX4:

“In 2020, no new benefit districts have either been requested or created in Cedar Creek.

“In Olathe, developers are required to pay for the internal infrastructure (roads, sewers, etc.) in their new developments and some or all of the adjacent infrastructure that benefits that development. 

“The city has always considered that cost should be paid by the developer and not taxpayers at large. It is a fair way to pay for new growth and protects city taxpayers.

“One tool for a developer to finance that infrastructure is through benefit districts. In those cases, developers (majority property owner) request the city create a benefit district. This is basically an upfront loan to the developer that is paid back though assessments on the property. The assessment stays with the property owner if the property changes hands.

“All roads in Cedar Creek were financed by the developer, many through benefit districts, and many residents are already paying assessments. New roads and infrastructure going into Cedar Creek would be paid by the developer, with the possibility of a benefit district.

“The city believes Cedar Creek is a wonderful community and looks forward to its continued growth. We will gladly continue to work with the developer on benefit district opportunities to help meet its obligation to finance the development’s road network.”

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