Developers want STAR bonds for BluHawk arena, Cosmosphere museum
Overland Park will ask the Kansas Commerce Commission if a branch of the Cosmosphere space museum and a junior hockey league arena would qualify for a special type of financing to pay for some of the development costs.
The city council voted unanimously to ask for a state opinion on the project’s eligibility for sales tax revenue (STAR) bonds and to set a public hearing on the boundaries of the proposed special taxing district for June 20.
Developers hope to make the 300-acre development at the southeast corner of 159th Street and Antioch Road a regional destination for visitors to the proposed Cosmosphere Innovation Space and a 6,000-seat hockey arena.
The development would also include hotels, shopping, homes and a health care facility. Construction has already begun on the Shawnee Mission Health-Blue Valley campus, the BluHawk Marketplace and the second phase of home building.
The Cosmosphere would be a branch of the Hutchinson-based space museum and is being touted by Price Brothers development as a draw for families. The hockey arena is intended as the home for a junior hockey league team. Lamar Hunt Jr. has secured rights for a United States Hockey League franchise to begin playing in the Kansas City area, with hopes of eventually locating at the BluHawk development.
The council’s action Monday did not commit the city to the project, but was one of a multitude of steps the developers said they needed to work out the details of the project.
The STAR bonds are a form of public financing that is focused on tourism. Cities hoping to lure a development with a tourist attraction can issue bonds for some of the cost of development. The bonds would then be paid back with some of the sales tax revenue the attraction brings in.
The state decides whether projects are eligible for STAR bonds. Guidelines from the Kansas Department of Commerce say STAR bonds should constitute less than half of the total project costs. To be viewed favorably, the attraction should be a major, unique destination that would draw at least 20 percent of its visitors from several states other than Kansas, and at least 30 percent from farther than 100 miles away.
At a committee meeting before the regular council session, council members discussed a feasibility study conducted by the developer that showed the attractions should bring in about 3.5 million visitors a year, with 1.2 million coming from outside a 100-mile radius. The current estimated cost of this part of the development is $649 million. The preliminary figures also estimated about $205 million that potentially could be funded by the bonds.
However Monday’s action was limited to the boundaries and request for a state ruling and did not address specific financing amounts.
Some council members were cautious about the development and the financing during the committee meeting. Councilman Terry Goodman wondered if the arena proposed for BluHawk would become a direct competitor to a performance space planned at the Brookridge development at Interstate 435 and Antioch Road. He also noted that other ice venues in Johnson County have failed in recent years.
Goodman also asked for clarification on whether the Mavericks, a professional hockey team now based in Independence, would eventually move to the arena. He was told the arena would instead be the home of a United States Hockey League amateur team. The USHL is considered the top amateur league and is a source of players drafted to the National Hockey League, said attorney John Petersen, who represented the developers.
“There’s a lot of interest in hockey, particularly youth hockey, in this town and no place to practice,” Petersen said.
Other council members said they were intrigued, but wanted to take their time to study the idea before giving the project momentum. But representatives for the developer said they need to know as soon as possible if the STAR bonds would get state approval so they can continue with development work that will get the project open in time for the 2018 season.
Despite developers’ enthusiasm, the BluHawk plan has not gone over well with some of its neighbors. A week ago, many of them showed up at a public hearing before the city planning commission to voice their objections to the project, saying it would add to traffic problems on U.S. Highway 69 and might end with arena patrons driving through quieter neighborhood streets on their way home.
The planning commission recommended approval of rezoning and permits for BluHawk, and the full city council has rescheduled the next discussion of it for June 20.
This story was originally published May 17, 2016 at 10:20 AM with the headline "Developers want STAR bonds for BluHawk arena, Cosmosphere museum."