What are STAR Bonds? How the Chiefs stadium in Kansas will be funded
Kansas lawmakers and the Kansas City Chiefs announced an agreement Monday to move the football team’s facilities to the Sunflower State using a controversial funding mechanism called STAR bonds.
The Kansas City, Kansas, stadium; Olathe headquarters and practice facility; and other development are expected to cost at least $4 billion.
Wyandotte and Johnson county taxpayers, as well as visitors to the facilities, can expect their sales tax dollars to go toward these projects for decades to come.
Here’s what you need to know about how the STAR bonds work and what they mean for the Kansas City area.
What are STAR bonds?
STAR bonds, which stand for Sales Tax and Revenue bonds, are a way for the Kansas government to provide upfront money for “major commercial, entertainment, and tourism projects,” according to the Kansas Department of Commerce website. Kansas, Nevada and Illinois are the only states that have this loan system, which was first used in Kansas more than 25 years ago.
Once the facility opens, some of the state retail sales tax from the stadium and surrounding businesses would go to paying off the bonds. City or county governments could choose to put a portion of local sales tax revenue toward the project, though it is not required.
What are the terms of the new Chiefs stadium contract?
State lawmakers will issue bonds for 60% of the estimated cost of the Chiefs stadium project, and private money will fund the rest.
The Wyandotte County stadium with a roof is projected to cost $3 billion, and the Olathe headquarters and practice facility to cost more than $300 million.
Both Wyandotte County and Olathe will be expected to dedicate future local sales tax generated by the development to retiring stadium bonds, too, Kansas Lt. Governor David Toland told The Star Monday afternoon. The exact locations of these districts will be negotiated in the coming months.
However, the agreement specifies the STAR bond district for the stadium will include property at the intersection of Interstate 70 and Interstate 435, near the Legends in western Wyandotte County.
This will be the largest percentage that Kansas has put up for a STAR bond project. In the past, Kansas could only fund 50% of a development. That is until a 2024 bill allowed lawmakers to cover up to 70% for professional sports stadiums.
The stadium development will also receive 75%, or $19.5 million, of the “Attracting Professional Sports to Kansas Fund.” The fund, which receives money from sports gambling and the lottery, has amassed more than $26.2 million, according to an October report by The Kansas Reflector.
How have STAR bonds been used in the past? Why are they controversial?
Kansas has funded both sports venues — Kansas Speedway and Children’s Mercy Park in Kansas City, Kansas — and entertainment districts — Prairiefire in Overland Park — with the bonds.
The STAR bond program has faced scrutiny because some say the projects do not draw out-of-state tourists and are unlikely to make enough tax dollars to repay the bonds.
According to a January 2025 annual report, Children’s Mercy Park had paid off its $150 million debt. More than 20 years after the bonds were issued, the Speedway owed more than $9 million in bonds, more than a third of the original amount. Children’s Mercy Park has paid off its $150 million debt. Prairiefire defaulted on the first part of its $65 million in bonds in 2023.
What happens if the stadium defaults on bonds?
If visitors to the stadiums did not create enough sales tax dollars to make bond payments, legislators would likely be pressured to put more Kansas Lottery money toward the project, The Star reported. This would reduce the amount of lottery dollars available for other government services.
Would using STAR bonds to fund Kansas stadiums cause a tax increase?
Kansas residents would not pay more in taxes since the Chiefs are using STAR bonds for the stadium. However, they would not benefit from the increased tax dollars from having the stadium in their state until the bonds are paid off. In the future, state lawmakers have the option to raise taxes to make up for money diverted to bond repayment.
The Star’s Matthew Kelly, Sofi Zeman and Kacen Bayless contributed to this report.
This story was originally published December 23, 2025 at 1:28 PM.
