OVERLAND PARK, Kan. — It’s been more than 20 years since state leaders in Kansas and the Unified Government of Wyandotte County and Kansas City, Kansas, first approved STAR bonds to build the Kansas Speedway.
Since that 1999 project, about 16 projects have used STAR bonds to build attractions across Kansas.
State legislators frequently adjusted the rules to fine-tune the program.
“I would say this law has evolved a lot in the last 20 years; usually in response to a changing environment or ways projects have used the legislation before,” explained Todd LaSala, a principal at Stinson LLP law firm, where he specializes in public financing like STAR bonds.
Kansas leaders are considering another evolution to the STAR bond program.
A committee plans to introduce a proposal during the state’s special legislative session Tuesday to expand the reach of STAR bonds.
The ultimate goal is to use the program to help lure the Chiefs and/or Royals to Kansas from their stadiums in Missouri.
STAR bonds, known as Sales Tax and Revenue bonds, use bonds to pay for new developments, then use sales tax generated at those developments to pay back the bond over 20 years.
That's different from sending sales tax revenue to the city, county and state like typical sales taxes.
Bondholders assume risk when they invest in projects. Cities and the state of Kansas do not guarantee the bonds if developments do not generate enough sales tax to pay off the bond.
Prairiefire in Overland Park is the only STAR bond project to miss a payment. The STAR bond district at Prairiefire includes a museum, movie theater, and bowling alley.
There also are several restaurants and retail stores.
In 2021 and 2023, Kansas legislators modified STAR Bonds. It now requires attractions to do more in a feasibility study and closely track visitors. It also expanded STAR bonds to have more of an impact in rural areas and to include amusement parks.
Even if legislators make another evolution to STAR bonds during next week’s special session, LaSala doesn’t expect any new deals immediately.
“All the statutes require all the steps in any new STAR bond project to be out in the open, to have a bunch of public hearings and public notices. It will take a while and it’s all going to happen out in the open,” he said.
While proponents tout the benefits of STAR bonds, an audit of the program in 2021 pointed out most projects don’t meet tourism goals the state has for the program.
Even as work continues in Kansas to lure the teams across the state line, Kansas City, Missouri, Mayor Quinton Lucas said his goal is to keep both the Chiefs and Royals in his city.
