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Commerce official urges five-year extension of Kansas Star Bond program
Summary
Bob North of the Kansas Department of Commerce briefed a legislative committee on the Star Bond program, urging a five-year extension before next year’s sunset and outlining program mechanics, recent statutory expansions, project performance, and visitor-tracking requirements.
Bob North, chief counsel for the Kansas Department of Commerce, told a legislative committee that the state should extend the Star Bond program for five years to give developers and cities predictability while complex tourism projects move through long development timelines.
North said Star Bonds, created in 1999, are “a very, very effective tool for growing the Kansas economy” and that the projects are financed by incremental and new sales tax generated by visitors to attractions rather than by general taxpayer obligations. “These are special revenue bonds,” he said, explaining that bondholders’ recourse is limited to state and local sales tax, transient guest tax and liquor-related tax revenue, and that the bonds are not obligations of the state or local governments.
Commerce told the committee the state currently has 17 active Star Bond projects and roughly 10 to 11 additional projects at conceptual or early stages. North recommended extending the program’s sunset, now set for next year, to provide the predictability needed for developers to complete multi-year, capital-intensive projects.
Recent statutory changes centralize and strengthen oversight, North said. Commerce now leads feasibility studies and mandatory visitor-tracking requirements, replacing developer-led feasibility analysis used in earlier years. Those measures were added to improve accountability, measure economic impact, and limit the risk that a new attraction would “cannibalize” existing projects.
North reviewed statutory expansions enacted in recent years that broadened eligible projects to include historic theaters and amusement parks and, more recently, to allow recruitment of professional sports teams and stadium financing. He said the statute sets a $1 billion minimum capital investment for professional-sports-related projects — while noting such developments typically require substantially larger capital outlays and, for some stadiums, seat minimums (for example, the act requires at least 30,000 seats for a baseball stadium). Most Star Bond districts collect sales tax for up to 20 years; professional sports stadium projects may collect for up to 30 years under the current law.
On performance, North cited Village West as an example of success, saying the state is recovering more than $40 million a year in sales tax from that project and that Village West bonds have been paid off. He said other paid-off projects include Hutchinson and the Flint Hills Discovery Center in Manhattan, noting that many Star Bond projects have retired debt earlier than their scheduled 20-year terms. Kansas Speedway was described as close to payoff and as the only existing project with a 30-year term enacted specifically for that facility.
North also updated the committee on Prairie Fire, which “got off to a rough start” because a planned grocery-store sales-tax driver did not materialize and a movie theater tenant became involved in litigation. He said the development is now cash-flowing after adding new attractions and retail, including a Chicken N Pickle location and an Amateur Baseball Hall of Fame.
On visitor verification, North described modern tools Commerce uses: license-plate readers and third-party smartphone-location data to estimate visitor origin and counts. He said those technologies, along with mandated visitation-count methodologies, help Commerce validate that projects attract out-of-state visitors or new spending rather than merely shifting local purchases.
North emphasized legislative oversight for large team or stadium deals: if Commerce negotiates a contract with a professional team, the contract must be presented to the Legislative Coordinating Council for approval before the state proceeds.
Committee members asked for additional data points North said Commerce would provide (for example, a recent request for total foregone sales tax revenue), and the committee indicated a bill on the subject could receive a hearing soon. No formal committee action was recorded during the briefing.
