(Updated to include comments from House speaker and the Royals, Chiefs)
The Kansas Legislature on Tuesday laid the groundwork for the Kansas City Royals and Chiefs to relocate to Kansas with a package of tax incentives similar to those used to build the Kansas Speedway in Wyandotte County.
The House voted 84-38 and the Senate voted 27-8 to pass the bill that expands a law passed in the 1990s that allowed the use of future sales tax proceeds to help offset the cost of the speedway to include stadiums for the Kansas City Chiefs and the Royals.
“The bipartisan effort to invite the Chiefs and Royals to Kansas shows we’re all-in on keeping our beloved teams in the Kansas City metro,” Gov. Laura Kelly said in a statement.
“Kansas now has the opportunity to become a professional sports powerhouse with the Chiefs and Royals potentially joining Sporting KC as major league attractions,” Kelly said.
Supporters say the bill gives Kansas a special opportunity, potentially opening the door to construction of a closed-roof venue that could maybe land the Kansas City area a Super Bowl, a Final Four and other sports events and concerts.
“Kansas has a unique opportunity to keep these two major professional sports franchises in the KC metro and bring new commerce,” said Republican state Sen. J.R. Claeys said.
“We also have the opportunity to do something another state has not considered and that is building a domed-stadium that can host concerts in cold weather, NCAA Final Fours, college football playoffs, college bowl games and, of course, the Super Bowls that open-air stadiums are not considered for,” Claeys said.
The bill was opposed by an unusual mix of Democrats and conservative Republicans, who questioned whether tax subsidies for stadiums would do anything more than redistribute economic activity within the Kansas City region.
Others questioned whether the teams were leveraging Kansas to get a better deal with Missouri and why the state was more interested in attracting a sports franchise than it was addressing issues focused on the human condition.
Democratic state Rep. Jason Probst of Hutchinson voted for the bill, although he may have been one of the sharpest critics of the effort to win passage of the expanded incentives.
While acknowledging it would be “catastrophic” for the Royals and Chiefs to leave Kansas City, Probst asked why there hasn’t been a similarly concentrated focused on homelessness, child poverty and hunger.
“It is amazing to me the speed with which we can solve problems when they’re oriented around wealth, when they’re oriented around business,” he said.
“I wish that we could put this kind of energy into doing real things that help people in my part of the state or further west part of the state. We’re not doing that,” he said.
Probst said he would reluctantly support the bill.
“This is probably, at the end of the day, going to be one of these deals where we offer a deal and Missouri comes back with another deal and we get into this contest of who can offer the best deal,” he said.
A top Republican in Missouri told The Kansas City Star that Missouri legislators might not respond to the Kansas incentives until after the August primary elections.
Kansas lawmakers said that while they may have questions about the effort, they said the state should not overlook the opportunity.
“I think we need to be at the table,” said Democratic state Sen. Usha Reddi of Manhattan.
“Let’s at least give an option for the Chiefs or the Royals to choose Kansas,” Reddi said.
“If we are not doing that, we are doing a disservice and already saying that Kansas is not good enough,” Reddi said.
“Let’s be part of that conversation and see where it goes and continue to ask the questions along the way. Let’s not stop asking questions,” she said.
Republican state Sen. Mike Thompson of Shawnee opposed the bill.
“What we have in this bill is an undefined framework that leaves too many questions unanswered and too many assumptions accepted as fact,” he said.
Wearing a red sports coat and professing to be a longtime Chiefs fan, Republican state Sen. Virgil Peck of Havana said he regrettably voted against the bill.
“I could not in good conscience vote ‘yes,’ although I have wanted the Kansas City Chiefs to be in Kansas since I was a kid,” Peck said.
“I could not vote ‘yes’ because of not having all the information, not being comfortable with all the information on this legislation during a one-day special session.
“I’m not voting no to the Kansas City Chiefs, I’m voting no to the rapidity of the process that we went through today.”
Representatives of both franchises appeared before a joint meeting of the House and Senate commerce committees on Monday to make their case for tax incentives that could be used to move the teams across the state line from Missouri.
They are seeking to broaden the use of sales tax revenue, or STAR bonds, to help cover the cost of a stadium for the Royals and Chiefs.
Passage of the bill was marked by a robust campaign in which the Chiefs and Royals hired about three dozen lobbyists to court lawmakers leading up to Tuesday’s special legislative session that was called primarily to address the unfinished business of tax cuts.
The bill came in the aftermath of Jackson County, Missouri, voters turning down a sales tax extension that would have helped finance a new Royals ballpark downtown and renovation of Arrowhead Stadium for the Chiefs.
Supporters of the bill have said it’s a necessity to keep the teams in the greater Kansas City area after the ballot measure failed earlier this year in Missouri.
David Frantze, a lawyer for the Royals, suggested in testimony Monday that the bill could induce the Royals to move across the state line, especially since the team’s lease at Kauffman Stadium expires following the 2030 season.
“The proposed STAR bond legislation you are considering provides a path for the Royals to explore,” Frantze said.
The Royals issued a statement shortly after the bill passed Tuesday.
“We’re grateful to the Kansas Legislature for today’s bipartisan action that gives the state a pragmatic tool in which to achieve its economic development goals,” the team said in statement.
“The Kansas City Royals look forward to additional conversations as we evaluate where we will play baseball in the future,” the Royals said in statement.
“We will always prioritize the best interests of our fans, associates, and taxpayers in this process.”
The Chiefs issued this statement after the vote, thanking the state for asking them to collaborate on the project:
“We appreciate that leaders in the state of Kansas proactively reached out to us for input on the proposed STAR Bond legislation,” the Chiefs said in a statement.
“We support their efforts to expand the existing program and congratulate them on passing the legislation in special session,” the team said.
“We look forward to exploring the options this legislation may provide.”
The Legislature is revising the law for sales tax revenue, or STAR bonds, that were created in the 1990s to foster tourism in Kansas. They have been viewed skeptically over the years because they have failed to meet projections for bringing tourists from out of state.
However, advocates of the bill say that many STAR bonds projects have been much smaller in scope than either the Kansas Speedway or stadiums for the Chiefs and Royals, which would stand to draw many more people from out of state.
The bill would allow for construction of a major sports complex, including a stadium of not less than 30,000 seats for only an NFL team or a Major League Baseball team in a state neighboring Kansas. They would have to invest at least $1 billion in each stadium project.
The bill would allow STAR bonds to cover up to 70% of stadium costs, up from the current level of 50% that’s now allowed for those type of projects.
The bill also extends the amount of time it would take to repay the bonds issued for the project to 30 years from 20 years.
The bill also would allow for a separate location such as a practice facility to be included in the district where revenues would be funneled to pay for a stadium.
The bill would sunset in a year, although the Legislative Coordinating Council – a committee of state legislative leaders – could approve a one-year extension.
The Legislative Coordinating Council also would be responsible for approving the final STAR bond agreement with the sports franchises.
The state also would have the power to pledge revenues it receives from sports wagering to attract a professional sports team to bonding.
When it authorized sports wagering, the Legislature directed that 80% of the money go into a fund intended to be used for attracting a professional sports team.
The bill also is written in a way so no entity may pledge their full faith and credit to back the STAR bonds, and only designated sales taxes, liquor taxes and lottery monies may be used to pay them off.
Cities or counties could issue STAR bonds to finance a stadium project, but they may also opt out.
The bill clarifies that local sales, use or transient guest taxes would not go to cover the costs of a project unless they agree to participate.
On Monday, Korb Maxwell, an economic development attorney representing the Chiefs, told legislators that the type of bonds that would be issued for the stadiums would be secured by the revenue the project generates.
Maxwell told lawmakers that they are not bonds that would be secured by the general revenues of local and state government.
“These are revenue bonds and revenue bonds only,” Maxwell said. “Not only does the law say that, that we’re passing now.
“The previous STAR bond law says that, and if we get to the point of issuing the bonds and doing the bond documents, the bond documents will say that 25 or 50 times in bold type all throughout, again and again and again and again,” he said.
