City council approves Orscheln incentives

The “Marketplace” sign is gone from the former Wolf Creek Marketplace building in Basehor, as is the rest of the equipment that was once inside. A group has shown interest in opening another retail store in the building, and city administrator Mark Loughry said at Monday’s Basehor City Council work session that tax incentives from the city might help close the deal. Enlarge photo

September 22, 2011

A suitor has stepped forward to make Basehor's former Wolf Creek Marketplace building its home — but it's not a grocery store.

Orscheln Farm & Home has conditionally agreed to purchase and open a store in the former grocery store building, an executive with the company confirmed Thursday.

A few days later, on Monday, the Basehor City Council approved, 5-0, a resolution offering Orscheln a 95 percent rebate of the city's share of property taxes on the building through 2019.

That tax incentive, which the company requested, is critical in the company's decision whether to move ahead and open a store in the building, Basehor City Administrator Mark Loughry said last week.

Loughry said the company would also need to gain approval for a building modification from the Basehor Board of Zoning Appeals in order to move into the building on Wolf Creek Parkway near 155th Street and U.S. Highway 24-40, which has been vacant since the grocery store closed in 2010.

“If those two things can be resolved, I’m pretty confident they're going to go forward with the purchase,” Loughry said this past week.

Rick Powers, chief financial officer for Orscheln Farm & Home, confirmed the company's conditional agreement to purchase the building Thursday. Powers said the company hoped to open the store in February or March of 2012. But he said the company had some other hurdles to clear, in addition to the tax abatement and zoning codes, before it made a final decision to move forward with the deal.

“We've got several issues out there that we’re trying to get resolved,” Powers said.

Powers said he could not comment on what the other issues were.

After Monday’s council meeting, council president Dennis Mertz said the city needed to do what it could to draw a business to the Wolf Creek building, so that other businesses might develop around it.

“We need to support bringing an anchor to this development and to fill this empty building,” Mertz said.

Mertz noted that Orscheln would not be receiving other benefits given to the grocery store before, including a provision that the city would reimburse the store for a net loss. The store would also be subject to an additional 0.75 percent sales tax, as part of a transportation development district used to pay back a Kansas Department of Transportation loan for the construction of Wolf Creek Parkway.

Orscheln asked the city to offer the same property tax abatement plan that it gave to the Wolf Creek grocery store formerly in the location, Loughry said.

Powers said Orscheln was attracted to the location because of the quality of the building and because the company tends to aim for small markets and their surrounding rural customers rather than for big cities.

“We're a farm and home store,” Powers said. “We're in towns of 3,000 people, and we do quite well in them, because we attract from the surrounding area. It's the type of product we carry.”

The company is not concerned about other farm stores in nearby towns, Powers said, because many of its other stores are located in markets with a good deal of competition and have done well.

“It's just a fact of life that when you enter the retail business, you're going to have competition,” Powers said.

Orscheln is the same group that was in negotiations with First National Bank of Olathe, the former owner of the property, to buy the building this spring. At a city council meeting in March, Loughry reported, without naming the company, that those negotiations had ended because the two groups' offers were about $1 million apart.

At the time, Loughry said the company had offered about $1.8 million for the building, compared with about $6.5 million of outstanding debt that remained on the building when the bank took control.

He said Wednesday that he did not know what had changed in the negotiations.

“I really don't know what the price was (this time) and why now it's all of a sudden back on,” Loughry said.

Powers said he could not comment on the negotiations.

Since the negotiations fell apart in March, the property has changed hands. On Aug. 12, First National Bank of Olathe was shut down by the Federal Deposit Insurance Corp., and its assets were sold to Enterprise Bank & Trust, based in St. Louis.

Orscheln Farm & Home operates 154 stores in nine states.

The Wolf Creek Marketplace grocery store closed in February 2010, just more than seven months after it opened.

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