Kansas bill for sports facilities authority clears committee

MANICA

A Kansas bill to create a sports facilities authority that would own and oversee the construction, operation and management of a $3 billion partly bond-financed stadium for the National Football League's Kansas City Chiefs passed a House committee on Thursday after attempts to amend the measure failed.

The legislation, introduced on March 6, calls for a nine-member board with seven appointed by the governor and legislative leaders from both parties. The state's commerce secretary and a team representative would also be on the board. The authority's real estate, tangible and personal property would be exempt from property and sales taxes.

The sports facilities authority would be able to issue special obligation bonds to finance or refinance the acquisition, construction, or development of a sports facility. 

The state plans to finance its share of the $3 billion — at least 65,000-seat — domed stadium through the issuance of $1.8 billion of sales tax and revenue (STAR) bonds. Those bonds will be issued by the Kansas Development Finance Authority while the sports facilities authority would have the ability to issue debt for purposes other than the stadium, according to Robert North, chief counsel at the Kansas Department of Commerce. 

"The (sports) authority will also have the ability to charge and assess fees, which potentially could provide revenue to pledge toward a bond sale," he said in an email.

In December, team and Kansas officials announced the Chiefs' move from Kansas City, Missouri, starting in the 2031 football season. Under what they are calling a public-private partnership, 60% of the stadium project would be financed with STAR bonds with the team responsible for the remaining 40%.

Before advancing the authority bill, the House Committee on Commerce, Labor, and Economic Development rejected amendments to eliminate voting rights for the team's board member and give the heads of the Unified Government of Wyandotte County-Kansas City, Kansas, and the city of Olathe — which would be ex officio board members — voting rights. 

The unified government, the home of the stadium, and Olathe, the site chosen for a team headquarters and practice facility, took action last month to pledge incremental increases in certain sales and transient guest taxes collected in specific geographic areas to help pay off sales tax and revenue bonds that would be issued by the Kansas Development Finance Authority for the project.

At a March 10 joint legislative committee hearing on the sports authority bill, Korb Maxwell, an attorney representing the Chiefs, called the measure "the next critical step in carrying out the commitment that secured the largest economic development project in the history of the state of Kansas." 

"It establishes the governance framework that allows this project to move from agreement to action, from vision to construction," he said. 

Kansas is pledging incremental increases in state sales and liquor taxes collected in an overall STAR bond district located in Wyandotte and Johnson counties for the stadium bonds, according to a term sheet for the project. Slices of sports betting and state lottery revenue will also be used to secure bonds for the stadium.

A beefed-up version of STAR bonds with a maximum maturity of 30 years was authorized under a 2024 Kansas law aimed at luring major league sports teams from neighboring Missouri. The law allows STAR bonds to cover up to 70% of costs for professional sports facilities that carry a price tag of $1 billion or more.