During the third quarter of the AFC Divisional Playoff game at Arrowhead Stadium on January 23, 2022, Patrick Mahomes was seen throwing a pass against the Buffalo Bills. In a recent development, Kansas lawmakers are considering offering tax incentives worth millions of dollars to the Kansas City Chiefs and Royals to shift their base from Missouri to Kansas. This move could potentially benefit both the teams and the state of Kansas.
On Monday, the Kansas City Chiefs and Royals representatives went before Kansas lawmakers to advocate for the expansion of a tax incentive program. This program would offer the teams millions of dollars to relocate from Missouri and establish themselves in new stadiums on the other side of the state line.
During an informational hearing at the Kansas Statehouse, Korb Maxwell, an attorney representing the Chiefs, emphasized the importance of having major league teams in order to become a major league. He stated, “This is the greatest opportunity we’ve had in any generation, and it’s here before us right now.”
Some supporters of the proposal were direct in their stance. They stated that if Kansas fails to take action, there is a possibility of losing professional football and baseball teams within the Kansas City region. A group that aims to attract these teams to Kansas has expressed concern over this matter.
“We cannot afford to take the risk of losing our beloved teams, the Kansas City Chiefs and the Kansas City Royals, to other states,” expressed Dan Murray, a lobbyist for the nonprofit organization, Scoop and Score Inc., which is actively working towards bringing the Chiefs to Kansas. As Kansans, these teams hold a special place in our hearts, and we must do everything in our power to keep them here.”
A plan was presented on Monday to expand the state’s tax incentive program specifically designed to aid in financing tourism and entertainment destinations. If the proposed legislation is passed, it will enable teams to receive an amount exceeding $750 million for the financing of stadium projects.
Before the formal start of the special session that commences on Tuesday, an informational hearing was conducted. However, it is crucial to note that the lawmakers cannot take any action on the bill until the special session officially begins.
The proposed legislation aims to improve the current Sales Tax and Revenue (STAR) Bond program in the state. It will enable the issuance of bonds that can cover up to 75% of a project’s costs, which will be repaid from the increased sales state tax collections at the project site. Typically, other projects can only finance up to 50% of their costs using STAR Bonds.
To be eligible for the financing mechanism outlined in the bill, a National Football League or Major League Baseball team must have a current location near Kansas and make a minimum capital investment of $1 billion. This financing option can be utilized for both stadium and training facility projects.
The repayment period for the debt on the stadium constructed under the expansion would be extended to 30 years instead of the conventional 20 years.
Kansas’ legalization of sports betting and liquor taxes generated within the STAR Bond district could provide a significant boost to the project’s revenues.
On Monday, Gov. Laura Kelly didn’t make a commitment to support the legislation despite her previous efforts in driving significant economic development projects in Kansas.
In speaking with reporters, she expressed her admiration for the concerted effort to persuade these teams to relocate across the river. However, she also noted that this matter is not one she intends to focus on extensively. Instead, she believes it’s a matter for the legislature to address and work through.
During the joint committee meeting, Will Lawrence, Kelly’s chief of staff, expressed that the current version of the bill does not raise any concerns for the governor’s office. Therefore, there is no reason for Governor Kelly to refrain from signing it.
Critics of STAR Bonds have labeled them as ineffective, with less than one-quarter of the funded attractions meeting the state’s objective of boosting tourism, according to an audit. Despite this, the audit suggests that some projects may have succeeded in keeping Kansans spending money within the state instead of crossing over to Missouri.
According to the audit, it is believed that local visitors tend to relocate the already existing economic activity from one part of Kansas to another.
Moving the teams
Kansas legislators have initiated a campaign to attract the Chiefs and Royals sports teams, or even both. This comes after the voters of Jackson County in Missouri rejected a proposition to extend a 3/8-cent sales tax that would have helped fund a new stadium for the Royals and upgrades at Arrowhead Stadium, back in April.
According to Maxwell, people have been questioning why the legislation needed to be passed in a special session instead of waiting for the regular session in January.
He emphasized that there are only a few years left in the Chiefs’ lease at Arrowhead, making time a critical factor.
Maxwell emphasized that the time has come for Kansas to take the lead. He pointed out that Missouri and Jackson County already had their chance to speak, and now it’s time for Kansas to step up and make their voice heard.
The Royals were the driving force behind the push to renew the sales tax in Missouri. Their executives had recently disclosed plans to relocate to the Crossroads Arts District in downtown Kansas City, just two months before the vote. Unfortunately, the proposal was rejected by 58% of voters.
In an effort to keep the reigning Super Bowl champions, the Chiefs, in Kansas, a new organization called Scoop and Score Inc. recently launched. Visitors to the organization’s website are encouraged to sign a petition aimed at legislators, urging them to not let the Chiefs leave KC.
The organization has enlisted the services of 30 lobbyists, among them is Murray. Meanwhile, the Royals have eight lobbyists and the Chiefs have hired former Kansas House Speaker Ron Ryckman Jr. along with his former aide, Paje Resner, to serve as their lobbyists.
According to Ryckman, there is a possibility that the Kansas City Chiefs owner, Clark Hunt, may consider relocating the team to a different location outside of the Kansas City region.
According to Ryckman, there are several cities out there vying to become the new home of the Chiefs or the Royals.
Murray passionately appealed to the legislators to endorse the proposed law, emphasizing that it includes multiple safeguards to prevent the state and local governments from being liable for the bonds. He reiterated the importance of these “guardrails, guardrails, guardrails” to ensure the success of the legislation.
Although the Chiefs attorney confirmed that the team has not yet developed a design or strategy for a stadium in Kansas, Murray is urging legislators to proceed with establishing a program. The Kansas Department of Commerce will be responsible for reviewing the specifics, with ultimate approval from the Legislative Coordinating Council. This committee is comprised of eight House and Senate lawmakers and has the authority to adopt legislation when the Legislature is not in session.
According to a preliminary version of the bill, any arrangement between a team and the state would remain confidential until it is officially executed.
According to libertarian groups, the bill was criticized for being a corporate favor that wouldn’t contribute much to Kansas’ economic growth. During the committee hearing, Dave Trabert, CEO of the Kansas Policy Institute, expressed his doubts about the validity of the claims that the stadiums would have a positive impact on the economy.
According to Trabert, they requested Scoop and Score to present their calculations on how they reached a billion dollars of economic activity, but unfortunately, they did not receive any response.
During an interview, Trabert expressed his disbelief over the proposal, referring to it as “absurd.”
He stated that the issue at hand is not related to economic growth, but rather it is driven by political motives. The objective is to enable individuals to showcase their achievements and persuade people to vote for them based on what they have done.