‘A difficult decision’: Kansas lawmakers split over Chiefs, Royals plan. Will it pass?

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Rep. Stephanie Sawyer Clayton arrived in the Kansas Legislature over a decade ago, but she’s never seen her constituents as divided as they are over a plan to lure the Kansas City Chiefs and Royals away from Missouri.

“This is the first time in my legislative career that I have ever seen district opinion, constituent opinion, at a dead heat,” the Overland Park Democrat said. Deciding how to vote, she said, “will be a difficult decision.”

Top Republican lawmakers are expected to put forward a plan at a special session on Tuesday that would authorize potentially more than $1 billion in bonds to help finance stadiums for one or both teams. The effort comes after Jackson County voters rejected a 40-year sales tax in April that would have guaranteed the teams remain in Kansas City.

Whether supporters of the plan have the votes is another matter.

As the Legislature prepares to weigh the expansive proposal, lawmakers appear split. While some have voiced enthusiastic support over the past few days, others are apprehensive, concerned about corporate welfare and the politics of voting to aid wealthy business owners as they approve only a modest tax cut package for Kansans.

Lawmakers have also expressed wariness about advancing another massive incentive program targeted at one or two specific businesses. Just two years ago, the Legislature passed an incentive plan called APEX that led to more than $800 million in incentives with no job guarantees to secure the Panasonic battery plant near DeSoto currently under construction.

Views on the stadium proposal don’t fall neatly along partisan lines. Organizations with influence among Republicans are divided: the Kansas Chamber of Commerce supports the effort, while Americans for Prosperity-Kansas, which has ties to the Wichita billionaire Charles Koch, opposes it.

On the Democratic side, some are excited by the prospect of one or both teams relocating. At the same time, the Hunt family, which owns the Chiefs, has given to Republican causes. Democratic Gov. Laura Kelly, who has cultivated an image as a Chiefs fan, hasn’t said whether she supports the proposal.

“Fool me once with the Panasonic plant,” said Rep. Ken Rahjes, a Republican from Agra, in northwest Kansas. Still, speaking earlier this month, he said he didn’t know what position he would take and needed more information.

Under the Kansas plan, the state would issue hundreds of millions in Sales Tax and Revenue – STAR – bonds to help finance stadiums for one or both teams, with sales tax revenue from the stadiums and surrounding development pledged toward paying off the bonds. Officials could also issue bonds against sports gambling and lottery revenues, with some supporters of the plan estimating the revenues could support a bond of up to $1 billion.

Critics are highly skeptical that the stadiums and nearby development could generate enough tax revenue to pay off the STAR bonds on time. Numerous studies of sports stadiums have found they are not major drivers of new economic activity. And while Kansas can’t be forced to repay the bonds with general revenue, a large default could risk the state’s creditworthiness.

“I understand the fact that there will be additional revenue coming in, but it never offsets the lost revenue to the state,” Rep. Adam Smith, a Weskan Republican who chairs the House Tax Committee, said.

Smith said he hadn’t seen the latest proposal. At the end of the regular session, lawmakers briefly weighed taking up an earlier version of the plan, which would have allowed up to 100% STAR bond financing of a stadium. Smith said that plan was fairly “lucrative” for the teams.

Full STAR bond financing of a stadium appears off the table, and the Kansas Department of Commerce has ruled out such a scenario. The actual language of the plan hasn’t been publicly released.

Smith contrasted the effort to win over the Chiefs and Royals with the work lawmakers have put in to reach an agreement on tax cuts after Kelly vetoed previous plans over their size.

“Obligating that revenue to a project like this does take it out of the state coffers and that’s been one of the things that’s been frustrating to me trying to get a tax plan through,” Smith said. “Seems like when we’re trying to pass tax relief we’re counting every single penny and trying to make the case that it’s not sustainable.”

“But then we’re going to come in and pass some of these incentives that are committing I don’t know how much revenue” toward a stadium project, he said.

A win, or picking winners and losers?

A cottage industry to promote the proposal has sprung up in Topeka over the past two weeks. Dozens of lobbyists have been enlisted by Scoop and Score, a new organization spearheaded by former House Speaker Ron Ryckman, an Olathe Republican.

Scoop and Score has launched a campaign in favor of the plan, sending texts to Kansas residents that claim “every city in America” is preparing an economic incentives package for the Chiefs. The Chiefs and Royals have also hired lobbyists, with Ryckman lobbying for the Chiefs.

Rep. Jesse Borjon, a Topeka Republican and vice chair of the House Commerce Committee, which will hold a hearing Monday on the plan, said it’s a “win for Kansas.” Echoing comments typical of supporters, Borjon said the stadium projects would bring in sales tax revenue that would not otherwise be generated. He also emphasized that the risk rests with bondholders, not taxpayers.

“There’s a lot of opportunity upside for increased revenue, economic development dollars coming to Kansas,” Borjon said. “That would be a game changer.”

A 2022 review of 130 studies over 30 years found that nearly all empirical studies found “little to no tangible impacts of sports teams and facilities on local economic activity” and that the level of subsidies typically provided for stadiums “far exceeds any observed economic benefits.”

While the review found that any identified economic effects typically occurred in the area immediately surrounding a stadium, those impacts weren’t always present and “can not be generally applied to all stadium projects.”

Whatever additional tax revenue may be generated inside the STAR bond district, the state share will be pledged toward paying off the bonds, which would likely have a 30-year term. Local governments are expected to be given the option to retain their local sales tax revenue, however. That makes the plan more attractive to cities and counties but potentially makes paying off the bonds more difficult.

Lawmakers supportive of the proposal point to the Kansas Speedway – the original STAR bonds project – and Children’s Mercy Park as examples of the kind of success the program can achieve. The Speedway, in particular, helped spur development in western Wyandotte County that has now made the area near I-70 and I435 an epicenter of commerce.

For the Speedway, $24.3 million in bonds were issued in the late 1990s. About $10.6 million in bond debt remains, according to the Kansas Department of Commerce’s 2023 annual STAR bonds report. More than $150 million in bonds were issued for Children’s Mercy Park and all of it has been paid off.

Some other projects have stumbled. Heartland Motorsports Park in Topeka underperformed expectations and the property is now being put up for auction. Prairiefire in Overland Park defaulted last year on its STAR bonds. State auditors in 2021 estimated it would take Prairiefire until at least 2046 for the state to recoup the sales tax revenue given up by the district.

“I’m pretty well on record saying I don’t like big giveaways to rich families, rich corporations,” said Rep. Jason Probst, a Hutchinson Democrat.

But if Kansas is going to use STAR bonds, he said, a Chiefs or Royals stadium is the kind of project the program was intended to secure.

“They’re designed for massive projects that are going to have a multi-generational impact on your community and on your state,” Probst said.

Rep. Samantha Poetter Parshall, a Paola Republican, conducted a poll on her Facebook page in early June. Out of 90 votes, 85% of respondents urged her to oppose the STAR bonds proposal. Parshall wrote that she has always opposed STAR bonds.

“Having the Government pick winners and losers by giving incentives, tax breaks, or handouts at the core goes against the free market principles I believe in,” she wrote.

Most discussion about the possible location of a stadium has centered on Wyandotte County. Johnson County officials have sounded skeptical about the possibility of the Chiefs or Royals relocating to their county.

Sen. David Haley, a Kansas City, Kansas, Democrat, said he is pushing northeast Wyandotte County as a potential location. He said the area makes sense given its proximity to downtown Kansas City, Missouri, and the Kansas City International Airport.

Haley said he has received assurances, he didn’t say from whom, that eminent domain would not be used as part of any STAR bonds stadium project.

Still, he said some uncertainty remains about the proposal.

“There’s nothing nefarious like some poaching or some border war,” Haley said. “It’s just like any other business, they’re trying to evaluate what might be there. I get the impression no one really knows for sure.”

‘Are we negotiating against ourselves?’

The public campaign to attract the Chiefs – and later the Royals – began in earnest on June 4, when House Speaker Dan Hawkins, a Wichita Republican, and Senate President Ty Masterson, an Andover Republican, released a letter they had sent to the Chiefs inviting the team to offer feedback on the STAR bonds plan.

The Chiefs have since made positive comments about the proposal, although they have stopped well short of any kind of commitment to come to Kansas if the legislation becomes law.

Chiefs president Mark Donovan said Thursday that the team has been clear that it is going to look at all options. He expressed appreciation and support for those in Kansas working “to provide an option.”

“The potential to be able to evaluate that versus other options is something that’s really important to us,” Donovan said. “And we’re excited to hopefully get that passed on Tuesday, and then be able to look at that and evaluate that versus the other options we have to look at.”

Missouri officials – including Kansas City Mayor Quinton Lucas – have said the Kansas STAR bonds plan isn’t the end of the road. Lucas has suggested Missouri lawmakers could match a Kansas offer, although top legislators have cautioned that they aren’t inclined to rush into a special session of their own.

One complicating factor on the Missouri side is that Sen. Bill Eigel, a Weldon Spring Republican who is running for governor, opposes public aid for stadiums and could filibuster any bill brought up in the Missouri Senate this year. His Senate term will end come 2025, however.

In Kansas, some lawmakers want reassurance that the state is not simply being used as a negotiating tactic for one or both teams to secure a better deal with Missouri.

“Are we negotiating against ourselves – AKA our Jackson county counterparts who are also trying to keep the Chiefs over there?” said Rep. Dan Osman, an Overland Park Democrat.

The Star’s Sam McDowell contributed reporting to this story.