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OVERLAND PARK, Kan. — An Overland Park developer could still receive tax incentives if plans for a new multisport athletic complex aren’t fully built out.

Price Brothers Management intends to create the Bluhawk Sports Park in the southwest corner of 159th Street and U.S. 69 Highway.

In 2019, the Overland Park City Council voted to allocate $77 million in STAR bonds to help build the complex.  

Using STAR bonds allocated by the state, cities can sell bonds to developers to cover the cost of new development. That money is then paid back over a set period of time using sales tax generated by the new development. 

Last June, the council approved an amendment to the development agreement with Price Brothers to adjust the site plan and reduce the amount of STAR bonds to $70.6 million.

On Monday, the Overland Park City Council voted 7-4 to approve an additional amendment that would give the developer access to other local tax incentives if the future city council decides not to issue additional STAR bonds for the project. 

The project 

The development agreement outlines the use of Community Improvement District (CID) sales tax revenue and a Transportation Development District (TDD), to fund transportation and infrastructure improvements. 

The 277-acre development will be built out in two phases and the bonds will be issued in two installments. If the first phase of the STAR bond sales bring in less than the $49.3 million needed to pay for the multisport complex, the developer could make up the revenue shortfall using sales tax revenue from the CID.

The first phase of the project would include the construction of a 240,000-square-foot sports complex that includes four basketball courts, an ice rink, an indoor multipurpose turf field and roughly 44,000 square feet of new retail space. 

Phase two would add a second ice rink, four basketball courts, an additional turf field and about 134,000 square feet of retail space. 

New amendment 

Under the latest amendment, if the city council or the Kansas Commerce Department doesn’t approve the $21.4 million in STAR bonds for the second half of the project, the developer could still be entitled to certain tax incentives. 

Todd LaSala, an attorney advising the city council, said if the second wave of STAR bonds are not issued, but certain project benchmarks are met, the developer could still receive some of the original CID and TDD funds for the second phase of the project. 

“In that scenario, the CID and the TDD Phase 2 monies, a portion of them will be available to the developer. They don’t get the STAR bonds, but they do get the $14million of TDD for a total of $35 million and they get $6.9 million of CID for a total of $13.5 million,” LaSala said. 

LaSala said to get access to those funds the developer would need to complete Phase 1 and at least 134,000 square feet of retail space outlined in Phase 2. 

Councilmembers Faris Farassati and Scott Hamblin both voted against the amendment based on concerns over issuing tax incentives.

“We are having a situation where there is a significant tax package on the table. The ones (council members) who voted for this in June 2021 were promised a certain scale that now is being dialed back and we are releasing authority to the applicant,” Farassati said. 

“They want this money because the underwriter bailed. They need this CID as collateral for the bank because the bank bailed. So far it doesn’t sound like they’ve secured private investors. Why would I put my taxpayers in that position?” Hamblin said.  

Before the final vote, Mayor Curt Skoog spoke in support of the mixed-use project.   

“These projects generate more money than are invested in them. STAR bonds, we are using state money, state sales tax that would go to Topeka to create an amenity for our community, a multi-sports arena,” Skoog said.  

Bart Lowen, vice president of development for Price Brothers, said the development team intends to build the entire sports facility as soon as possible. Lowen sent FOX4 this statement: 

“The first of two CID provisions the City staff supported and was approved last night, allows a portion of already agreed upon CID capacity to be directed to fund any STAR Bond shortfall. This important provision helps push the sports facility forward immediately rather than wait for additional STAR Bond capacity to materialize.

In this case the City and Developer’s interests are aligned. The sports facility arrives sooner, and the Developer is incented to continue constructing retail portions of the development to help support the CID revenues used to fund the STAR Bond shortfall. This provision is only effective if the STAR Bond issue is below the cap agreed upon in the existing Development Agreement.”

“The second of the two CID provisions would allow the Developer access to a portion of the approved CID capacity to fund the portion of the retail buildings associated with the second phase of the sports facility, if and only if, the City Council were to deny the Developer’s request to move forward with the second phase bond issue and only after the Developer has satisfied every required precondition of the City.

This incentivizes the Developer to continue investing in the project before it is known whether the City Council will approve the second phase bond issues. We were pleased that a majority of the City Council believed the project is in the City’s best interest and voted accordingly.

Developers intend to break ground on the Bluhawk Sports Park later this fall with the first phase estimated to be complete by April 2025. The second phase of the project is expected to begin in July 2024 with a completion date in November 2028.