What are STAR Bonds and how do they work?
KANSAS CITY, Mo. (KCTV) - If lawmakers are successful in luring the Chiefs to Kansas, building and fully financing a new stadium could mean issuing $2-$3 billion in STAR Bonds.
But what exactly is a STAR Bond?
Sales Tax and Revenue (STAR) Bonds are a financing tool that allows Kansas municipalities to issue bonds to finance the development of major commercial, entertainment and tourism projects.
Kansas typically authorizes STAR Bonds for 50 percent of a project’s costs. But the proposed STAR Bond for a new Chiefs stadium would be for 100 percent with a 30-year term. The bond is geared toward spending future money on development to be paid off later using sales tax money from the development after it is built.
STAR Bonds have come with some controversy. The Pairiefire development in Overland Park faced financial problems, even defaulting on its STAR Bond debt.
Some STAR Bond success stories include the Kansas Speedway and the Legends outlets.
The top two leaders in the Kansas Statehouse are making a play to get the Chiefs to move to Kansas.
Lawmakers are poised to consider a bill in an upcoming special session that would allow the state to issue STAR Bonds in the case of attracting a sports stadium to the state.
ALSO READ: ‘The Chiefs are Missouri’s team’: Missouri governor, lawmakers vow to keep franchise in Show-Me State
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