Friday, November 6, 2009
The Border Showdown between Kansas and Missouri is manifested in many more ways than just the football and basketball games, such as how the two states attract businesses and major entertainment venues to their borders.
In early September, the Kansas City Wizards and Cerner Corp. announced a $414 million project that included an 18,500-seat soccer stadium (for the Wizards) and a 600,000-square-foot office complex (for Cerner), both near the Village West shopping district by the Kansas Speedway.
Cerner, a health care technology company, would create 4,500 jobs in Kansas City, Kan., at an average salary of more than $60,000 to fill the new offices.
The inclusion of the soccer stadium in the project came as a big surprise, as the previous plan for the Wizards was to be the main attraction of a proposed redevelopment of the old Bannister Mall property in south Kansas City, Mo.
To land the project, in mid-October the state of Kansas offered a $229.5 million incentive package, mostly in sales tax revenue bonds.
In Kansas, STAR bonds are a way for local governments to directly finance land redevelopment with the sales, use and transient guest taxes generated by the development itself.
The use of state sales taxes are key in differentiating STAR bonds from most tax increment financing, “which relies upon the incremental increase in property tax revenue to pay the bonds,” State Rep. Barbara Ballard (D-Lawrence) said.
State sales taxes make up two-thirds of the money used to pay back STAR bonds, mostly because they’re higher than local sales taxes. They also allow for more money to be issued by the state to attract said development and the jobs and income that come with it in the short term, plus additional sales tax revenues once the bonds are repaid.
The size and availability of these funds are crucial to the state’s success in attracting redevelopment projects such as Kansas Speedway and the surrounding commercial areas. And because this STAR bond district is on track to pay off its bond ahead of schedule, according to Ballard, further development of the area is more likely.
Former Kansas Commerce Secretary David Kerr, who, in the last two weeks, has taken a job as the top economic development official in Missouri, made this development possible. He worked to get the incentive package moved along and approved quick enough to prevent a counter from Missouri.
Naturally, Kerr’s decision has made many state officials uneasy.
“It’s the equivalent of switching teams in the middle of the world series,” said State Rep. Kevin Yoder (R-Overland Park).
Gov. Mark Parkinson, who allowed Kerr to interview for the position, maintains that the Wizards-Cerner deal is safe.
Yet, the threat from Missouri still looms — as has been the case for KU sports, despite our confidence — because OnGoal LLC, the owner of the Wizards, and their development partner, Lane4 Property Group, has not yet accepted the state’s offer.
If they do go through with the project, it will be Kansas’ STAR bonds, which do not exist in Missouri, that will have made a major difference in creating this win over our rival state.
— Holmes is an Overland Park sophomore in political science.
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