Kansas officials and two local governments have already put pieces on the board for the Chiefs’ move across the state line, laying out sales-tax pledges meant to help finance the team’s new stadium and headquarters.
The plan centers on redirecting future sales-tax growth from defined areas in Wyandotte County, Johnson County and Olathe to help pay off bonds tied to the project. The state is looking at a broad district that stretches across most of Wyandotte County and large parts of Johnson County, while the Unified Government of Wyandotte County and Kansas City, Kansas, and the city of Olathe have each approved smaller local pledges around the actual development sites.
The Chiefs proposal is pegged at $4 billion, with another $1 billion in surrounding mixed-use development. Public and private money will be mixed together to cover the cost.
At the center of the financing is Kansas’ sales tax and revenue, or STAR, bond program, which uses increased sales-tax collections from major entertainment, retail and tourism projects to help fund them. In this case, the state says it could issue up to $2.775 billion in STAR bonds, which would be bought by private investors. As spending rises in the affected areas, the extra sales-tax revenue would be steered back toward the project for as long as 30 years.
The state published its STAR bond district map earlier this month. It covers most of Wyandotte County and broad sections of Johnson County, including Shawnee, Lenexa and Olathe. The baseline amount above which new state sales-tax revenue would be captured has not yet been announced, and existing STAR bond districts were left out.
Local governments can also pledge their own tax streams, and both Olathe and the Unified Government did that in February.
In Wyandotte County, the Unified Government’s Board of Commissioners approved a pledge from a 236-acre project area off State Avenue and 126th Street, the site expected to hold the new stadium. For up to 30 years, the pledge includes revenue from the Unified Government’s 1% sales and use tax that is not already committed, the Unified Government’s share of the 1% county sales and use tax, and the Unified Government’s guest tax on lodging such as hotels, up to 8%, while keeping 2% of the 10% tax.
It does not include the Unified Government’s emergency medical service sales tax or its public safety and neighborhood infrastructure tax.
That site is currently undeveloped and generates no sales-tax revenue. Early estimates from officials projected $350 million to $450 million in redirected revenue over 25 years, including new sales-tax revenue created by the stadium, the entertainment district and hotels. Officials also said the Unified Government could still see benefits during that period from unpledged sales tax, guest tax revenue and possible property tax payments tied to new development.
Olathe’s piece of the deal came from a 165-acre area off College Boulevard and Ridgeview Road, where the team’s new headquarters and training facility are expected to rise. The City Council approved that pledge in February. For up to 30 years, it excludes the city’s street maintenance sales tax and the park sales tax.
That Olathe area, like the stadium site, is also currently undeveloped and does not produce sales-tax revenue.
There is still work to be done on final agreements, development plans and the rest of the details before construction can move ahead.
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