As promised, the Kansas Department of Commerce has issued some clarifications on STAR bond reform. Thank you, KDOC. (STAR bonds use sales tax revenue from specific projects to fund infrastructure related to that project.)
You can read the KDOC clarifications here. Here are a few highlights, from a memorandum from Antoine Soave, KS Sec. of Commerce:
• A feasibility study would be commissioned by the Kansas Department of Commerce rather than by the developer. Commerce should be able to recover 1-2 percent of the project costs in order to fund these studies and staff time.
I've seen such studies conducted for things like TIFs and abatements for local projects. In my experience, the developer has had a LOT of say in how and who conducts these studies.
• Requirement of the private sector to place a percentage into escrow prior to the deal, a portion of which could be forfeited if a developer does not meet requirements.
• Expansion of STAR bonds into blighted and urban areas with a threshold that may be lower in rural and distressed areas.
Look, I don't like using incentives (aka taxpayer subsidies) in support of any business or development. I lean very libertarian in this regard. I don't think government should be picking the winners and losers in any way, shape or form. They are notoriously bad at it, and I think it's immoral.
A wise, well-connected person also informs me that with the Wyandotte County horse arena project, for which the Governor vetoed a unanimous Senate budget inclusion, there will be no monetary overlay -- meaning, the American Royal project would be a completely new project, and proceeds from sales at the Legends would go into state coffers and would not be used to fund the horse arena.
This well-connected person also explained that those funds appeared slighter than the $42 million in budget proposals before the Senate Ways and Means Committee, because the STAR bond expiration on the Village West project (Legends) end on Dec. 31, 2016, splitting the state's fiscal year. So, only half of the receipts from the project will hit the state's books in 2017. The full amount will hit state coffers in 2018.
I appreciate the clarification. We do have good people working in the Capitol.
No one is ever going to convince me that floating STAR bonds to move the American Royal across state lines is a good idea, and I note that until STAR bond reform occurs, and it won't this session, the American Royal project will receive all of the perks and benefits under the existing rules. That means limited oversight from the Kansas Legislature, which has attempted to overrule this project.