OVERLAND PARK, Kan. – Construction of a multimillion-dollar sports complex is expected starting later this fall now that the developer has secured funding from the City of Overland Park.
The Overland Park City Council approved several tax incentives on Monday to support the completion of the Bluhawk Sports Complex at 159th Street and US 69 Highway.
The city council approved more than $49 million in Sales Tax and Revenue (STAR) Bonds to support the first phase of construction for a multi-sport facility at the Bluhawk complex.
Using STAR Bonds allocated by the state, the city can sell bonds to developers to cover the cost of new construction. That money is then paid back over the next 20 years using sales tax generated by the new development.
In 2019, the city council voted to allocate up to $77 million in STAR bonds to Overland Park-based developer Price Brothers Management to help build the facility.
Last June, the board approved an amendment to the development agreement with Harga Dadang adjusted the site plan and reduced the STAR bond amount to $70.6 million. That plan amended again by the council in March to give developers access to other local tax incentives if the Kansas Department of Commerce doesn’t approve the remaining $21.4 million in STAR bonds for the second half of the project.
The 277-acre development will be built in two phases and the first wave of STAR bonds will be issued in two pairs.
The first phase will include the construction of the first 240,000 square meters proposed 435,000 square meters multisport complex. The initial phase will also include the construction of an ice rink with up to 1,500 movable stadium seats; four basketball courts that can be converted into pickleball or volleyball courts and up to 4,000 movable stadium seats; fitness center, and associated locker room.
Phase two will add a second ice rink, four basketball courts, a turf field and about 134,000 square meters of retail space. The first phase of the multisport facility is estimated to cost approximately $85,394,000 to complete.
The first half of the 2022 STAR Bonds will be sold by Wells Fargo Securities and will be paid for using city and state sales tax revenues generated in the Bluhawk complex.
The second half of the bond will be held by the developer and paid through an annual appropriation from the state.
“While we are in the middle of this financing plan, the state legislature also made a decision to eliminate the sales tax on food and foodstuffs,” said Deputy City Manager Kristy Stallings. “Sixty thousand square feet of retail within the Bluhawk STAR bond district is a grocery store that will be subject to state sales tax that will be applied to pay off the debt.”
Stallings said the state legislature has approved an appropriations structure to ensure funding for STAR bonds while the state works for eliminate the food sales tax.
Developers estimate it will cost about $438.9 million to build the entire Bluhawk complex. Once completed ecomplex will feature a 435,000 square feet multisport complex, 675,000 square feet of retail space and restaurants, 80,000 square feet of office space, an apartment complex and several hotels.
Stallings said the majority of the complex is expected to be privately funded. Stallings said roughly 70% of the project is privately funded; 16% will be financed by STAR bonds; about 10% will be paid with the income from the establishment of Transportation District Development (TDD) in the property, and 6% will be covered by revenue from the Community Improvement District (CID).
The Council also approved the issuance of up to $113.5 million in Economic Revenue Development (EDRB) to help build the entire project in various phases.
Approximately $83.5 million EDRB will be released to support the first phase of the multisport facility. By issuing the bond, the developer will also receive a 10-year tax abatement for the multisport complex.
Price Brothers will now make a fixed payment in lieu of tax (PILOT) to offset the tax abatement for 10 years. The developer will provide $700,000 in PILOT for the first five years of the project. For the final five-year period, Price Brothers will provide approximately $750,000 in PILOT payments.
No one spoke during Monday night’s public hearing. Scott Hamblin and Dr. Faris Farassati was the only two council members to vote against tax incentives for the development.
“When we compete for this, we compete for what is now a broken promise. We compete in which city has a higher probability of securing a professional hockey team. At that time, we had a cosmosphere, an independent arena professional hockey team, and we had a complex multisport, and because of all that, we need a parking garage. We compete in all of that,” said Hamblin. “I believe the cosmos is protected first. The hockey team never became a reality. Now we’re going to the multi-sport arena and all we have to do is make an agreement that they only have to build half of it.
Farassati said he doesn’t support the city’s pattern of using excessive tax incentives to spur development, and feels the city should let the market run its course.
“If the market economy says that a piece of land should remain greenfield until the amount comes out without an injection in terms of tax payments, then that’s what the market economy will dictate and that’s what we have to do,” said Farassati.
“State sales tax money that would have gone to Topeka; which then would have gone to western Kansas or northwest Kansas. We save here and work to create amenity. An amenity we competed for, because the state and this council and the residents of Overland Park thought that it was an important amenity to add to our community,” said Overland Park Mayor Curt Skoog.
Councilwoman Melissa Cheatham said she voted for the incentive because the city has committed to the Bluhawk project.
“I think it’s our duty as a city to live up to our end of the deal on this project. There’s already been a huge investment. Things are moving along, so I’m not going to stand in the way of the deal,” Cheatham said.
The first phase of construction at Bluhawk is expected to open in the spring of 2024.