Government & Politics

How many tourism meccas does JoCo need? Critics question public subsidy for Bluhawk

Big JOCO projects to watch

Big new developments are on the drawing boards for Johnson County in 2018. Here are key projects to follow. Brookridge rendering from Curtin Property Co. Mission Trails rendering from Klover Architects.
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Big new developments are on the drawing boards for Johnson County in 2018. Here are key projects to follow. Brookridge rendering from Curtin Property Co. Mission Trails rendering from Klover Architects.

The Price Brothers development company wants $63.2 million in Kansas state tax incentives for an arena and multi-sport complex that it says will be a major tourism destination in south Overland Park.

But some residents and a state lawmaker turned out Monday night to question how many sports and entertainment meccas the metro area can really support. They specifically cited a similar proposal for the former Great Mall of the Great Plains just 10 miles away in Olathe.

The group doubted the Bluhawk proposal will be the regional tourism draw that Price Brothers envisions and argued against providing the STAR bonds public subsidy for this private development southwest of U.S. Highway 69 and 159th Street.

Bluhawk is a 277-acre mixed-use development that already has single family homes, a police and fire station, a neighborhood shopping center anchored by a Cosentino’s grocery store, and a Shawnee Mission Health campus.

But Price Brothers has said a signature part of the next development phase will be a 3,500-seat arena for concerts, as well as youth and amateur sports events, including an amateur league hockey team, plus a 300,000-square-foot indoor multisport complex for youth tournaments in hockey, volleyball, basketball, pickleball, indoor baseball and other activities.

A subsequent development phase is anticipated to have a Cosmosphere Innovation science and space museum.

In addition to the arena and multisport complex, the first project phase would have about 255,000-square-feet of retail, restaurant and hotel uses, including the shopping center already built, to create a type of “city center” in south Overland Park. Project 1 is expected to cost $194.4 million, of which about $63.2 million would be from Kansas STAR bonds.

STAR bonds (Kansas sales tax revenue bonds) provide upfront dollars for tourism-related developments that are intended to draw customers not just from the local area but from at least 100 miles away. They are 20-year bonds that are repaid with local and state sales tax money and require approval from the City Council and from the Kansas Commerce Secretary.

The money reimburses the developer for eligible construction costs, but is not a debt guaranteed by the city or by taxpayers, and the risk rests with the developer and bond investors if the project underperforms.

“Please, please, we do not need to do this,” Charlotte O’Hara, an Overland Park resident and former mayoral candidate, told the Overland Park City Council. The Council postponed a decision at least until Jan. 28, when a final development agreement on the project should be ready. But it heard public testimony Monday night from eight people who spoke against the bond request. No one from the public spoke in support.

State Sen. Molly Baumgardner of Louisburg, whose district includes Bluhawk, told the Council she’s heard from constituents who are universally opposed to this incentive request.

She said that to be STAR bond-eligible, projects must be statewide and regional tourism destinations over a sustained period of years, like the Kansas Speedway in Wyandotte County. She questioned whether Bluhawk’s sport complex will be distinctive enough, compared to other metro area arenas and youth sports facilities, including an existing Silverstein Eye Centers multipurpose arena in Independence, Mo.

“The public benefits must exceed the costs,” she said. “That is a concern of mine.”

Baumgardner and others also pointed to Prairiefire, at 135th Street and Nall Avenue, as a cautionary tale. It received nearly $65 million in STAR bonds for a museum and other amenities that were supposed to be a huge draw. But Prairiefire has struggled financially and has failed to meet attendance projections.

Speaking for the developer, attorney John Petersen argued to the Council that the Bluhawk facilities will indeed be notable public attractions that will be unique to the city and will benefit all of Overland Park.

“It will be something the city can be proud of for many, many years,” he said.

Councilman Richard Collins pointed out that STAR bonds do not involve a property tax break, so this is not taking away money from school districts, libraries or other services that rely on property taxes.

Todd LaSala, a real estate attorney who advises Overland Park on economic development projects, told the Council that a feasibility analysis by Canyon Research Southwest found the first project phase would support an initial STAR bonds issuance of about $44 million. The balance of the $63.2 million would initially be financed by the developer and would ultimately be reimbursed with a subsequent bond issuance, using revenues from the additional phases, including Cosmosphere.

But Councilman Dave White reminded his colleagues that the Canyon study did not take into account plans for redevelopment of the former Great Mall of the Great Plains in Olathe. Those plans, recently publicly revealed, also envision an ice hockey arena and other sports uses and are also seeking STAR bonds. White and several other council members wondered whether Johnson County can support two such developments within close proximity.

More testimony is expected Jan. 28 before the Council makes its decision. If the council votes in favor, the Kansas Commerce Secretary must also approve it.

Lynn Horsley reports on Johnson County for the Kansas City Star, focusing on government, politics, business development and battles over growth and change in the county. She previously covered City Hall in Kansas City for 19 years and has a passion for helping readers understand how government affects their lives.