What You Need to Know About STAR Bonds

The Kansas City Chiefs are in a unique position. With the current lease at the Truman Sports Complex expiring in 2031 and Jackson County voters overwhelmingly rejecting a 40-year extension of the three-eighths of a cent sales tax on April 2, could the Chiefs move from Kansas City, Missouri to Kansas City, Kansas? Momentum seems to be swinging toward the Kansas side of the state line after comments from Chiefs chairman and CEO Clark Hunt during the NFL Draft. Shortly after those remarks, renderings of a domed Kansas stadium made headlines. 

The stadium renderings that were released are not affiliated with the Chiefs but were brought forth by Kansas City-based architecture firm Manica. This isn’t the first stadium design by Manica, which was behind the design of the Las Vegas Raiders’ Allegiant Stadium and has put forth renderings for new Tennessee Titans and Chicago Bears stadiums as well. While these new stadium designs aren’t classic like the nostalgic Soldier Field in Chicago or Arrowhead Stadium in Kansas City, the modern vibe and design is very pleasing to the eye. For the Kansas City design, the new stadium would include a glass ceiling that would keep extreme weather out of the stadium. 

The renderings also show a mixed-use area outside of the stadium that would include hotels, dining options, a practice facility, green space, plenty of parking options and more. One thing the Chiefs (and the Kansas City Royals, for that matter) have never been able to capitalize on is building up commerce in the area surrounding the current stadiums at the Truman Sports Complex. This space would give the Chiefs ample opportunity to make additional revenue. A domed stadium would also be able to bring in huge national sporting events such as a Super Bowl for the NFL, an NCAA Final Four for college basketball, Wrestlemania for WWE, and more. 

Why would Kansas be able to offer the Chiefs a new stadium and not need to ask its residents and taxpayers to help cover the costs like in Jackson County and Kansas City, Missouri? The Kansas legislature would like to offer up to 100% of the project in STAR bonds, which is unique and a change of direction from the typical 50% given to a project in Kansas. 

What are STAR Bonds?

Sales Tax and Revenue (STAR) bonds are “a financing tool that allows Kansas municipalities to issue bonds to finance the development of major commercial, entertainment and tourism projects,” as described on kansascommerce.gov. A new stadium for the Chiefs and the surrounding mixed-use area would apply here. These bonds are paid off through sales revenue generated by the district. Currently, 6.5% of every dollar spent in the district would go toward paying off the bond. Every ticket bought, food and drink purchased, hotel room rented, merchandise acquired, etc., would be taxed just as it always would, but a percentage of that tax goes toward paying off the bond. Essentially, if you are going to a game or hanging out in the district and spending money there, you’d be helping pay off the bond. If you don’t care about sports or going to hang out in the area, your tax dollars would not go toward the project. STAR bonds helped finance the Kansas Speedway and Children’s Mercy Park where Sporting Kansas City of Major League Soccer plays. 

It will be interesting to see how much money the Hunt family will want to put into the project themselves. They were willing to put $300 million of their own money toward renovations in the initial plan that Jackson County rejected. For a brand new stadium, there’s a chance the Hunts would put more equity into that type of move. The cost of building a new stadium would likely be between  $2-$3 billion. According to The Kansas City Star, a $1 billion investment would be required to get the STAR bonds, but there is potential for the entire project to be funded through the bonds. That would be a best-case financial scenario for the Hunt family and would be hard to turn down. 

The Kansas Legislature’s 2024 session ended on April 30 without the opportunity to hear the legislation on attracting sports teams to Kansas. There is anticipation that Kansas Gov. Laura Kelly will call a special session in two weeks to deal with another tax relief legislation that was not passed this past week. During this special session that could be called, the legislature would then have the opportunity to bring the legislation on sports teams to the table. 

Missouri will most certainly try to retain both the Chiefs and Royals, but will the sour relationship with Jackson County along with a lack of interest from the Missouri State Legislature in giving money to Kansas City sports teams hold the state back? The clock is ticking, and if the Chiefs can’t get an answer from Missouri until 2025 at the earliest, it may be in their best interest to look where they are wanted and can get money now.

Read More: Chiefs Owner Clark Hunt Discusses Leaving Arrowhead Stadium After Failed Jackson County Tax Vote