NFL’s Chiefs asked to join Kansas legislature’s stadium bond push

Bonds

Kansas legislative leaders, who are seeking to coax the Kansas City Chiefs to leave neighboring Missouri, formally invited the National Football League team to join their effort to build a stadium with the help of bonds.

In a letter to Chiefs Chairman and CEO Clark Hunt that the Republican lawmakers released publicly Tuesday, they invited the team to weigh in during a special legislative session later this month on a proposal to tap sales tax and revenue bonds for the project.

A Kansas plan to issue sales tax and revenue bonds for an NFL stadium emerged after voters in Jackson County, Missouri, rejected a sales tax hike to build a new ballpark for Major League Baseball’s Kansas City Royals and renovate Arrowhead Stadium, left, the home of the Chiefs.

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“The Professional Sports Franchise STAR Bond Project represents, in our view, the best economic development partnership the franchise will find in America,” the letter from Senate President Ty Masterson and House Speaker Dan Hawkins said. “With our strategic location, a vibrant fan base, robust economic incentives, and the exceptional tools at our disposal, we are poised to make the Kansas City Chiefs even stronger.”

The plan initially surfaced during the waning days of the Kansas Legislature’s 2024 session. The effort arose after the defeat of a sales tax increase by Jackson County, Missouri, voters in an April 2 special election. The more than $50 million raised annually by the tax hike would have helped fund a new ballpark for Major League Baseball’s Kansas City Royals and renovate Arrowhead Stadium, the home of the Chiefs.

The team’s participation will enhance the proposal’s viability, according to the leaders’ letter. 

“Your insights and expertise are invaluable in shaping the success of this project,” it stated. “Your organization’s stature and experience in professional sports will help shape our understanding and ensure that this initiative aligns with the interests of all stakeholders involved.”

There was no immediate comment from the football team, which won its fourth Super Bowl in February.

A “Scoop and Score” website touts the benefits of STAR bonds for the public-private partnership project.

The issuance of STAR bonds began in the 1990s as a way to help finance Kansas tourist attractions with the debt, paid off with sales taxes generated by the development, generally retired in 20 years, after which the additional tax revenue would flow into state and local government coffers. 

Nearly $1 billion of STAR bonds have been issued for attractions including the Amelia Earhart Hanger Museum in Atchison, the Kansas Speedway in Kansas City, and various sports-related facilities, according to the program’s 2023 annual report. A 2021 audit found most of the 16 bond-financed attractions fell short of meeting state Commerce Department tourism-related goals.

The program, which sunsets in July 2026, experienced its first payment default in 2023 when not enough money was available to pay the entirety of debt service in December for nearly $65 million of STAR bonds Overland Park issued in 2012 for the 61.5-acre Prairiefire development that includes a museum, retail, offices, and housing.

Democratic Kansas Gov. Laura Kelly ordered a June 18 special session to take up tax relief after she vetoed on May 16 tax cut legislation passed by the Republican-controlled legislature for a third time since January.

NFL teams are no strangers to public subsidies and tax-exempt bonds. Examples include the $647 million of tax-exempts that funded Allegiant Stadium for the Las Vegas Raiders, and $705 million of bonds to fund a new Nashville stadium for the Tennessee Titans.

The league is lobbying to make sure the tax-exemption for stadium bonds survives Congress’ next effort to tackle tax policy.

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