Kansas lawmakers have voted to create an 11-member sports authority to carry out a $3 billion stadium deal with the Kansas City Chiefs.
If Democratic Gov. Laura Kelly signs legislation creating the authority, she will call into existence a unique entity comprising state, local and corporate leaders who will carry out a stadium project that has drawn bipartisan skepticism.
Lawmakers also voted to extend the tax incentive deal to bring the Chiefs to Kansas, which has been polarizing in ways that don’t cleave neatly along party lines. Kelly and her Democratic administration joined forces with Republican leaders in the state Legislature to champion the project.
Proponents of Sales Tax and Revenue, or “STAR,” bonds boast that the financing method does not create new taxes. Rather, for the Chiefs deal, private investors will buy bonds, which will provide up to 60% of the construction costs for the stadium.
Then, once the Chiefs start playing games at their new stadium in 2031, state and local governments will use the additional sales tax revenue generated around the Wyandotte County stadium, Johnson County facilities and entertainment districts to pay those bondholders back — plus interest.
On the House floor last week, Republican state Rep. Sean Tarwater of Overland Park praised the Hunt family, who owns the Chiefs, for their philanthropy.
“This bill is about jobs and investments, but it's also about where that spirit of giving will continue,” Tarwater said. “Why not Kansas?”
Detractors have been just as passionate, framing the deal as a giveaway to the Chiefs’ billionaire owners with dubious prospects for a return on investment.
Republican state Sen. Mike Thompson of Shawnee said the deal will “live in infamy,” echoing President Franklin D. Roosevelt’s remarks after the bombing of Pearl Harbor in 1941.
The state Legislature’s vote to create a quasi-governmental group to implement the plan is a major step in finalizing a deal that will affect Kansas for decades.
Why is a sports authority needed?
It’s common for stadiums to be owned and operated by public entities, such as the Jackson County Sports Complex Authority, which has operated Missouri’s Truman Sports Complex containing stadiums for the Chiefs and Royals.
In a meeting with Kansas lawmakers in January, Chiefs attorney Korb Maxwell said creating a public authority to oversee the stadium’s construction and upkeep was a linchpin of the deal.
If it was privately operated, Maxwell said, the $1.8 billion in bonds that the NFL team received would be subject to steep federal income taxes.
“That would blow a huge hole in the budget for this project and frankly would not allow it to move forward,” he said.
What would the authority do?
According to the bill that would create the group, the new Chiefs authority would “provide for the construction, financing, management and long-term use of sports facilities and sports facility infrastructure.”
That includes oversight of a Superbowl-capable domed stadium in Wyandotte County, team headquarters and a practice facility in Olathe, plus surrounding commercial districts.
The authority would be able to buy and sell property — without having to pay property taxes on it. It would be exempt from rules that typically require a competitive bidding process for state government contracts.
Practically all of the powers needed to mount the historically large stadium project, including hiring staff, buying insurance, charging rents and hiring contractors, would be in the authority’s hands.
The entity would face annual independent audits and be subject to state laws that require public meetings and records.
Who would be on the authority?
The group would consist of 11 voting members — including, to critics’ dismay, a representative from the Chiefs.
The mayor of Kansas City, Kansas, currently Christal Watson, and the mayor of Olathe, currently John Bacon, would also be able to appoint representatives.
But the cities must maintain full cooperation with the terms of the deal to keep their memberships, including uninterrupted participation in the STAR Bonds tax incentive deal that brought the Chiefs across the state line.
Other members of the board would be appointed by:
- The governor (currently Democrat Laura Kelly)
- The president of the state Senate (currently Republican Ty Masterson)
- The Senate majority leader (currently Republican Chase Blasi)
- The Senate minority leader (currently Democrat Dinah Sykes)
- The speaker of the House (currently Republican Dan Hawkins)
- The House majority leader (currently Republican Chris Croft)
- The House minority leader (currently Democrat Brandon Woodard)
- The state secretary of commerce (currently Lt. Gov. David Toland)
The representatives would be appointed by Aug. 31.
Zane Irwin reports on politics, campaigns and elections for the Kansas News Service. You can email him at zaneirwin@kcur.org.
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