The proposed STAR bond incentive district for the Kansas City Chiefs’ new stadium and team headquarters, announced late last year by Kansas and team officials, covers the bulk of Wyandotte County and a large swath of Johnson County.
But Shawnee, one of the Johnson County cities included in the still-unfinalized district’s boundaries, wants to exempt some areas within its city limits, perhaps for a potential STAR bond district of its own.
In December, the Chiefs announced plans to build a new $3 billion domed stadium in Kansas City, Kansas, along with a new training facility and headquarters in Olathe, supported by Kansas Sales Tax and Revenue (STAR) bonds.
While Shawnee had “limited conversations” with the Chiefs about the team moving there, they discovered they didn’t make the cut. Instead, the city was included in the Kansas Department of Commerce’s draft for its Chiefs STAR bond district, which also includes most of Olathe and Lenexa, as well as nearly all of Wyandotte County.
Still, there appears to be room for negotiation.
“It was made very clear to us that this is not a final map,” Shawnee City Manager Paul Kramer told the Post in a recent interview.
Olathe and Lenexa do not plan on requesting any exemptions on the state’s proposed district map, spokespeople for both cities told the Johnson County Post.
Shawnee did, however, as it eyes roughly 500 acres of undeveloped land on either side of I-435 that it wants to leave untouched for a potential STAR bond project in the future.
Because STAR bond districts, by law, can’t overlap, the city is looking to carve out that land from the Chiefs’ STAR bond map, Kramer said.
“If you look on the corridor, you’ve got Shawnee Mission Park, and you’ve got the landfill. So there’s some area in between those that has (sat) vacant for a long time, and we just want to have that tool in the toolbox, if it ever comes up,” he said.
The Chiefs STAR bond district includes 3 Johnson County cities
A STAR bond is a type of incentive that allows the state to issue bond debt to cover part of a project’s price tag that is then paid back over a set period of time using sales tax revenues generated by retail and dining sales within a project’s defined boundary.
First established by the state in 1999, the STAR bond was designed to build tourist magnets that would draw visitors, along with their sales tax dollars, from out of state and over 100 miles away from the district.
The Chiefs’ proposed STAR bond incentives are on a scale unmatched by any other STAR bond project that has come before.
Public dollars would account for up to 60% of the cost of a new Chiefs stadium and the team facility in Olathe, amounting to roughly $2.8 billion in taxpayer funds, with the NFL team picking up the other 40%.
That estimated $2.8 billion in bond debt, as well as the project’s total price tag are well above any project that’s previously received STAR bonds in Kansas.
Until now, the largest STAR bond district in the state was Sporting KC’s home, Children’s Mercy Park, which received $150.3 million in STAR bonds in 2010.
There are currently three active STAR bond districts in the county — two in Overland Park and another in the works in Olathe, also by the Hunt family, all of them dwarfed in size and scope by the proposed Chiefs’ deal.
“Very much an open-ended thing”
When Shawnee’s city staff found out that much of the city was included in the draft of the STAR bond district, Kramer said they had questions.
“Our biggest question was, ‘Is this finalized? Is there an opportunity to have discussions about what does this look like, specifically for Shawnee?'” he said.
Getting answers to those has been slow, as the Kansas Department of Commerce continues to work on the map, he said.
“I know that they have a lot of stuff they’re working on on the financing side. That’s about as far as it’s gone at this point,” he said. “It’s still very much an open-ended thing, something that we are hoping to get some resolution on.”
The Kansas Department of Commerce did not return a request for comment from the Johnson County Post for this story.
City staff weren’t the only ones in Shawnee with questions. After it was announced, Shawnee City Councilmember Kurt Knappen, who represents Ward 3 in the city, said some of the residents he represents reached out to express their skepticism with the deal.
“I was very surprised to hear that Shawnee was included in the area, and I received several emails from constituents stating that they were not happy about their taxes going to support it,” he said during a January city council meeting.
The STAR bond district would not affect Shawnee residents’ local taxes, Kramer clarified at that meeting, pointing out that the deal only impacts state sales taxes.
“None of the local sales tax revenue is included or at risk of being included in any STAR bond project. Two other local cities (Olathe and Lenexa), I think, have been in the news about being asked to consider to pledge a portion of their local sales tax. Shawnee is not one of them,” he said.
Keeping the land open for a STAR bond district is important
The 500 acres of undeveloped land along I-435 in Shawnee has been on the city’s mind for some time, Kramer said.
The area would include the Hogdon TIF district, a 263-acre project that contained a gunpowder operation for more than 50 years, established by the Shawnee City Council in 2009.
“That’s an indication that previous councils or previous staffs have identified that as a difficult-to-develop area by proactively creating a TIF district. So it’s definitely an area that, because of the proximity to the interstate and the traffic counts, that is absolutely a big priority for us,” Kramer said.
The potential for the land could be a variety of uses, like tourist attractions and destinations, Kramer said.
“It’s evident when you look north and south, the largest projects that have happened, whether it’s theme parks or race tracks or football stadiums, those happen with STAR bonds,” he said. “If everybody else around us has the opportunity to pull in a regional attraction using this tool, we would like those same opportunities.”
Being able to carve out that land for the city would allow Shawnee to keep up with other competing areas, Kramer said.
The idea that the Chiefs’ district would remove that option doesn’t sit well with the city.
“There are communities in the STAR bond district that have multiple STAR bond districts,” he said, including Kansas City, Kansas, and Olathe. “We don’t have any. And so, for our ability to have any city-wide (STAR bonds), even one, taken off the board, I think it’s something that concerns us.”
The city is still waiting on answers
While Shawnee city staff still has questions about the potential STAR bone district carveout and the finality of the boundaries of the state’s proposed district, it’s still waiting to have a conversation with the Kansas Department of Commerce to hash it out.
“We’re very respectful of the work that they put into this, but now, we’d like to have a conversation about how this impacts Shawnee. Basically, the response is, ‘OK, now, can we sit down and talk about some issues?'” Kramer said.
Still, the city is excited by the prospect of the Chiefs being nearby. At his State of the City address on March 2, Mayor Mickey Sandifer touted the advantages the city will have with the team in Kansas.
“We cannot overlook the immense opportunity that will come to Kansas, less than 10 miles from where we stand right now,” he said. “The Kansas City Chiefs moving to Kansas City, Kansas, means the name finally makes sense and Shawnee will be able to take advantage of the influx of football fans from across the Midwest who journey to the new Chiefs stadium.”
