Kansas lawmakers approve plan to lure Kansas City’s NFL team by helping finance stadium

Kansas legislators approved a plan Tuesday aimed at luring the Kansas City’s NFL team away from Missouri by helping to finance a new stadium for the Super Bowl champions.

The bill passed by the Republican-controlled Legislature and sent to Democratic Gov. Laura Kelly would allow Kansas to issue bonds to cover up to 70% of the costs of a new stadium in the state for the NFL team and another for Major League Baseball’s Kansas City Royals.

The state would pay off its bonds over 30 years with revenues from sports betting, Kansas Lottery ticket sales and new sales and alcohol taxes collected from shopping and entertainment districts around the sites for the new stadiums.

Kelly has not said whether she will sign the bill. But her chief of staff told lawmakers Monday that she had seen nothing in the version that passed that would make her veto it.

Kansas legislators see the two teams as in play because in April, voters on the Missouri side of the Kansas City metropolitan area refused to extend a sales tax used to keep up the teams’ existing stadiums, which sit side by side.

Top Republicans in the GOP-controlled Legislature had promised that the stadium proposal wouldn’t be debated until the Legislature approved a plan that would cut income and property taxes by a total of $1.23 billion US over the next three years. Many lawmakers argued that voters would be angry if the state helped finance new stadiums without cutting taxes.

“We definitely need to demonstrate that we’re getting relief to our citizens,” said Senate President Ty Masterson, a Wichita-area Republican who backed the stadium-financing plan.

Kelly called the special session to have lawmakers consider reducing taxes after she vetoed three tax-cutting plans before legislators adjourned their regular annual session May 1. The plan lawmakers approved was a compromise between her and Republican leaders.

Once legislators convened the special session, Kelly couldn’t control what they considered, and that created an opening to consider the stadium-financing plan. That measure would use revenues from sports betting, the state lottery and new taxes raised from the area around each new stadium to pay off the state’s bonds over 30 years.

The first version of the stadium-financing plan emerged in late April, but lawmakers didn’t vote on it before adjourning. It would have allowed state bonds to finance all stadium construction costs, but the version passed by lawmakers Tuesday would cap the amount at 70% and require legislative leaders and the governor to sign off on any bonding plan.

‘No blank checks’

House Commerce Committee Chair Sean Tarwater, a Kansas City-area Republican, said the NFL team is likely to spend between $500 million and $700 million in private funds on a new stadium.

“There are no blank checks,” Tarwater told GOP colleagues during a briefing on the plan before the House began debating it.

A new nonprofit group, Scoop and Score, formed last month to push for bringing the NFL team to Kansas, and that group and the Royals together hired more than 30 lobbyists for the special session. But the national free-market, small-government group Americans for Prosperity and the Kansas Policy Institute, a free-market think tank, oppose the measure, and both have been influential with conservative Republicans.

Free-market conservatives have long opposed state and local subsidies for specific businesses or projects. And economists who’ve studied pro sports teams have concluded in dozens of studies over decades that subsidizing their stadiums isn’t worth the cost.

“Most of the money that gets spent on the NFL team is money that would otherwise be spent on other entertainment projects,” said Andrew Zimbalist, an economics professor at Smith College in central Massachusetts who has written multiple books about sports.

Kansas legislators consider the NFL team and Royals in play because in April, voters on the Missouri side of the metro area refused to continue a local sales tax for the upkeep of the complex with their side-by-side stadiums. Missouri officials have said they’ll do whatever it takes to keep the teams but haven’t outlined any proposals.

‘There is an urgency to this’

The two teams’ lease on their stadium complex runs through January 2031, but Korb Maxwell, an attorney for the NFL team who lives on the Kansas side, said renovations on the team’s Arrowhead Stadium should be planned seven or eight years in advance.

“There is an urgency to this,” added David Frantz, the Royals’ general counsel.

Supporters of the stadium plan argued that economists’ past research doesn’t apply to the NFL team and Royals. They said the bonds will be paid off with tax revenues that aren’t being generated now and would never be without the stadiums or the development around them. Masterson said it’s wrong to call the bonds a subsidy.

And Maxwell said: “For a town to be major league, they need major league teams.”

But economists who’ve studied pro sports said similar arguments have been a staple of past debates over paying for new stadiums. Development around a new stadium lessens development elsewhere, where the tax dollars generated would go to fund services or schools, they said.

“It could still help Kansas and maybe hurt Missouri by the same amount,” Zimbalist said. “It’s a zero-sum game.”