Kansas offers unprecedented tax incentives to lure Chiefs, Royals

TOPEKA, Kan. (KCTV) - Lawmakers who hope to attract the Chiefs and Royals to Kansas scored a victory in a special session at the Statehouse on Tuesday.

Both chambers approved legislation to establish a funding package exclusive to attracting major league sports teams. The legislation specifies that it would apply to up to two teams and that they have to be an MLB and/or an NFL franchise currently located in an adjacent state.

The measure passed by a vote of 84-38 in the house and 27-8 in the senate. There was bi-partisan support in both chambers. Opposition came from both parties as well.

The Legends at Village West in Western Wyandotte County got a lot of love from the supporters during debate. The Legends, the Kansas Speedway and the Children’s Mercy Park soccer stadium were all built with money from STAR Bonds.

Senate Minority Whip Pat Pettey, a KCK Democrat, was a Unified Government commissioner, at the time when those projects formed off of the I-435/State Avenue interchange.

“In Wyandotte County, there was no development off that exchange until the opportunity came through the STAR Bonds,” Pettey said.

READ MORE: Kansas lawmakers pass STAR bonds bill to lure Chiefs, Royals

Rep. Sean Tarwater, a Stillwell Republican, introduced the bill. He too touted the Wyandotte County development in his sales pitch.

“There’s houses and apartment complexes and all kinds of construction up there,” Tarwater said. “And it started with a STAR Bond.”

“It brings us $51 million a year in tax revenue into our state,” said Sen. J.R. Claeys, a Salina Republican.

Sen. David Haley, a KCK Democrat, celebrated the passage.

“This will be, I think, an attraction, that will offer a viable alternative to both the Royals and the Chiefs,” Haley said.

He expressed hope that the Royals would consider building a stadium in downtown KCK.

The bonds, bought by private investors, are paid by sales tax revenues in the development district. The logic is to give up the tax revenue in the short term to cash in later.

“It’s going to create a lot of economic development in Kansas. The Kansas taxpayers won’t pick up any of the bill,” said Sen. Rob Olson, an Olathe Republican.

Opposition centered primarily on financial concerns and questions about parity for the entire state. That’s in part due to how these STAR Bonds differ from what’s been used in the past.

Previous STAR Bonds pledged both local and state sales tax revenue but had to be initiated by the local government. They capped how much of the project could be funded by bonds at 20% and required the bonds be paid off in 20 years.

This bill would allow 70% of the project to be funded with STAR Bonds, with a 30-year payoff timeline.

Sen. Molly Baumgartner, a Louisburg Republican, expressed concern that the teams could seek funding for renovations before that timeframe lapses and questioned who would pay for other expenses not covered by the legislation.

“We’re going to have major expenses on infrastructure such as water, sewage, and highway access,” Baumgartner said.

READ MORE: Kansas lawmakers pass tax relief bill during special session

The legislation also allows the state to pledge other revenue streams, such as sports gambling revenue and a portion of state lottery proceeds. The lottery proceeds are currently designated for economic development statewide.

“It seems to me that it will primarily benefit the five urban counties, the five biggest urban counties. What about the other 100 counties in the state?” remarked Rep. Susan Ruiz, a Shawnee Democrat.

Sen. Mike Thompson, a Bonner Springs Republican, expressed concern about details that won’t be ironed out until negotiations take place in private with the Secretary of Commerce. Approval will come from the Legislative Coordinating Council, which is comprised of only eight lawmakers.

“That doesn’t give us the chance to weigh in for our taxpayers who may end up not liking the end deal,” Thompson said.

Members of the House passed the bill early Tuesday afternoon. Senators passed the bill later, after debating it for about two hours.

Governor Laura Kelly indicated she plans to sign the legislation.

Editor’s note: The report that aired on KCTV5 News at 10 indicated that the final deal with the teams would require approval from a council of six lawmakers. The Legislative Coordinating Council has eight members — the speaker of the house, the president of the senate and three additional members from each chamber.

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