Stadium Watch 2024 -Jackson County Residents: How Are You Voting?

[Pablo]

Vote in this poll if you actually live in Jackson county.

We've all shared our opinions in the other thread. But who gives a shit what somebody in Platte County or Johnson County or Phoenix or NYC thinks. We're all just noise.

[Kiimo]

Your anger IS hilarious but for the sake of others who may want to know what is actually going on and not just scream venom like a petulant child, here they are....


THIS

THIS

and

THIS will tell you all you need to know. It's not some random podcast it's 810 talking about this issue in detail.


Don't let the fact that I acquiesced into providing an effort post distract you from the drinking of antifreeze, however. You should absolutely still do that.

[DanT]

Originally Posted by Kiimo

They carry a risk for the investors that buy the bonds, not normal Kansas taxpayers.

Prairiefire is a dumb shopping center with a museum nobody cares about.

The Speedway was built on STAR bonds and was so successful it was paid off really early so there's you success story.

Part of the Speedway was built on STAR Bonds, not all of it:
"Funding the $283 million racing complex was $167 million in public funds comprised of STAR Bonds supported by annual sales taxes, utility company contributions and matching funds from the local road improvements
budget plus $116 million in private equity from ISC."
https://www.iedconline.org/clientupl..._09_Summer.pdf


The State of Kansas did a report on their STAR Bond projects and noted that their Department of Commerce has two tourism goals for their projects, that at least 30% of users come from over 100 miles away and that at least 20% come from outside Kansas.
https://www.kslegislature.org/li_202...0220118_01.pdf

In Figure 2 of the report, you can see that the Speedway has been a success in part because it meets these two goals. The other sports projects with STAR Bonds don't come close to bringing in at least 30% of users from over 100 miles away. I doubt that Arrowhead ever has 20,000 fans from that far away, but I could be wrong.

The Scoop and Score proposal is talking about fully funding a NFL stadium in a region that already has one and the proposal basically amounts to sentencing Kansans in the 2050s and beyond to be stuck with a stadium that has lost its luster and that never came close to bringng in enough revenue to justify its costs or the risks that investors took. Of course, I doubt that proposal will go forward without serious modification because it's so preposterous. The Chiefs weren't even asking for as much charity as the folks behind this proposal are offering. Kansans aren't that reckless, or at least not the part of Kansas represented by the majority will.

[Kiimo]

I am under the impression it's exactly the same as the new stadium, part STAR bonds, part private equity.

Like that Tarwater guy said the Chiefs have to come up with "hundreds of millions".


Anyway, from that site so take it with a grain of salt:

FACTS:
STAR Bond projects are NOT notorious for defaults. And the risk for failure is NOT on the taxpayers, but rather the bondholders. The taxpayers will never have to repay these bonds.

Wyandotte County is home to the most successful STAR Bond developments in the state– the Kansas Speedway and Sporting KC, with nearly $1.5 billion in additional investment well underway.

Adding another professional sports franchise would only enhance public traffic to this area, attract millions of new fans to Kansas every year, and make this area even more successful, which benefits all of Kansas.

[TwistedChief]

So, I come at this as someone who has traded bonds for the last two decades of my life at Goldman Sachs and now at a hedge fund, and while I’ve never heard of these bonds (nothing wrong with that btw), I did some cursory digging.

The fact that this is marketed as this risk-free-too-good-to-be-true financing mechanism should raise some major red flags. STAR bonds have in aggregate never been issued in the size required to fund these stadiums, so this is seriously untested from a market’s perspective. And this notion that the risk is on the bondholders so everything is great?! These bondholders aren’t stupid. They understand the risk and the limited buyer base. The interest rate they’ll require will be prohibitive and that will increase the risk the project fails.

But it doesn’t matter, right? Because the bondholders only have recourse to the sales tax generated in the economic zone and would not have any claim on the state/municipality? Well, yes, in theory. But theory is not practice and one article cites a wink and a nod relationship between investors in these bonds and the state that they’d step in in the event of a default. You can imagine that a high profile project like this failing would have reputational impact for the state of Kansas more broadly (see:contagion) and there’s a reasonable chance they would bail them out if push came to shove. Think the government and the implicitly guaranteed Fannie Mae and Freddie Mac. Essentially, the Chiefs and Royals would be benefiting from the backstop of the state of Kansas.

I also wonder if some of these districts aren’t sized up a little larger than they would otherwise be which would carve out some sales tax that would otherwise go to the state. Wouldn’t shock me.

I’m a bit skeptical of Kansas politicians peddling snake oil without fully understanding the economics.

[Fish]

Originally Posted by Kiimo

I am under the impression it's exactly the same as the new stadium, part STAR bonds, part private equity.

Like that Tarwater guy said the Chiefs have to come up with "hundreds of millions".


Anyway, from that site so take it with a grain of salt:

Straight from Tarwater:

But the proposal includes key differences from a typical STAR bond district. Most significantly, the proposal allows for 100% of the project to be financed through STAR bonds, instead of the typical 50%. The term of the bond would run 30 years.

“This would allow 100% of the project to be paid for with bonds and they could be up to 30-year bonds,” Tarwater said, adding that the Kansas secretary of commerce would have room to negotiate.

https://www.kansascity.com/news/poli...288134415.html

[Kiimo]

Maybe they meant the Chiefs would buy a bunch of bonds.

[DanT]

Originally Posted by Kiimo

I am under the impression it's exactly the same as the new stadium, part STAR bonds, part private equity.

Like that Tarwater guy said the Chiefs have to come up with "hundreds of millions".


Anyway, from that site so take it with a grain of salt:

Thanks for the info, Kiimo. I just saw on the KCTV clip that the proposal does include that $1 billion come from the Chiefs. https://www.kctv5.com/video/2024/04/...chiefs-royals/

So, I was wrong to say that the proposal was going to rely on STAR Bonds to fund the entire project. Thanks for the additional information.

Still, I would think just using rough estimates about potential revenues from sales tax that it's a very risky bet for investors, unless the total issue of Bonds is somewhere around $1 Billion or less. Like TwistedChief mentioned in his recent post, investors will expect a big interest rate and there might even be some backstopping, the sort of thing that happened when the government stepped in to bail out some previous bad bets made in the finance industry.

One thing that could also happen is that the government sets asides funds to pay off the bond obligation in case the revenues from taxes aren't sufficient. That's the sort of thing that investors might ask for in order to agree to a lower interest rate. Apparently, the Unified Government of Kansas City, Kansas does this for several STAR bond projects, as they discuss this on page 88 of this report on their Long-Term Financial Forecast 2022-2026, https://www.wycokck.org/files/assets...11-19-2020.pdf Fortunately, they've not yet had to use those set aside funds to pay off investors, but those kinds of deals involving trading risks between investors and the government could spell impacts for "average Kansans".

[Titty Meat]

Originally Posted by TwistedChief

So, I come at this as someone who has traded bonds for the last two decades of my life at Goldman Sachs and now at a hedge fund, and while I’ve never heard of these bonds (nothing wrong with that btw), I did some cursory digging.

The fact that this is marketed as this risk-free-too-good-to-be-true financing mechanism should raise some major red flags. STAR bonds have in aggregate never been issued in the size required to fund these stadiums, so this is seriously untested from a market’s perspective. And this notion that the risk is on the bondholders so everything is great?! These bondholders aren’t stupid. They understand the risk and the limited buyer base. The interest rate they’ll require will be prohibitive and that will increase the risk the project fails.

But it doesn’t matter, right? Because the bondholders only have recourse to the sales tax generated in the economic zone and would not have any claim on the state/municipality? Well, yes, in theory. But theory is not practice and one article cites a wink and a nod relationship between investors in these bonds and the state that they’d step in in the event of a default. You can imagine that a high profile project like this failing would have reputational impact for the state of Kansas more broadly (see:contagion) and there’s a reasonable chance they would bail them out if push came to shove. Think the government and the implicitly guaranteed Fannie Mae and Freddie Mac. Essentially, the Chiefs and Royals would be benefiting from the backstop of the state of Kansas.

I also wonder if some of these districts aren’t sized up a little larger than they would otherwise be which would carve out some sales tax that would otherwise go to the state. Wouldn’t shock me.

I’m a bit skeptical of Kansas politicians peddling snake oil without fully understanding the economics.

The water park where the kid got his head decapitated was built with STAR bonds. There's a lot of examples of where those things failed big time. I'm glad this will be Kansas problem and not Kansas City's problem soon

[TwistedChief]

Originally Posted by DanT

One thing that could also happen is that the government sets asides funds to pay off the bond obligation in case the revenues from taxes aren't sufficient. That's the sort of thing that investors might ask for in order to agree to a lower interest rate. Apparently, the Unified Government of Kansas City, Kansas does this for several STAR bond projects, as they discuss this on page 88 of this report on their Long-Term Financial Forecast 2022-2026, https://www.wycokck.org/files/assets...11-19-2020.pdf Fortunately, they've not yet had to use those set aside funds to pay off investors, but those kinds of deals involving trading risks between investors and the government could spell impacts for "average Kansans".

That’s interesting. I would imagine that’s exactly what would need to happen to make this a financially feasible proposition. Kansas lawmakers are either too obtuse to understand the economics or deliberately misleading so that this becomes a last minute bait-and-switch where the taxpayer bears some direct exposure.

[DanT]

Originally Posted by Titty Meat

The water park where the kid got his head decapitated was built with STAR bonds. There's a lot of examples of where those things failed big time. I'm glad this will be Kansas problem and not Kansas City's problem soon

I don't know the details, but I think somehow the Schlitterbahn Bonds haven't been defaulted on, yet. The Unified Government has pivoted and some new developments are on the way, there, in what's called (or going to be called) Vacation Village. https://fox4kc.com/news/wyandotte-co...ation-village/

In the 2023 STAR Bonds Annual Report, they show that those bonds are still being paid off, so they must have defined the district where sales and use taxes come from to be bigger than just the water park itself. https://www.kansascommerce.gov/wp-co...port-FINAL.pdf

[Titty Meat]

Originally Posted by DanT

I don't know the details, but I think somehow the Schlitterbahn Bonds haven't been defaulted on, yet. The Unified Government has pivoted and some new developments are on the way, there, in what's called (or going to be called) Vacation Village. https://fox4kc.com/news/wyandotte-co...ation-village/

In the 2023 STAR Bonds Annual Report, they show that those bonds are still being paid off, so they must have defined the district where sales and use taxes come from to be bigger than just the water park itself. https://www.kansascommerce.gov/wp-co...port-FINAL.pdf

Damn that's surprising I thought they did for sure. I know Praire Fire did

[jettio]

Originally Posted by DanT

Part of the Speedway was built on STAR Bonds, not all of it:
"Funding the $283 million racing complex was $167 million in public funds comprised of STAR Bonds supported by annual sales taxes, utility company contributions and matching funds from the local road improvements
budget plus $116 million in private equity from ISC."
https://www.iedconline.org/clientupl..._09_Summer.pdf


The State of Kansas did a report on their STAR Bond projects and noted that their Department of Commerce has two tourism goals for their projects, that at least 30% of users come from over 100 miles away and that at least 20% come from outside Kansas.
https://www.kslegislature.org/li_202...0220118_01.pdf

In Figure 2 of the report, you can see that the Speedway has been a success in part because it meets these two goals. The other sports projects with STAR Bonds don't come close to bringing in at least 30% of users from over 100 miles away. I doubt that Arrowhead ever has 20,000 fans from that far away, but I could be wrong.

The Scoop and Score proposal is talking about fully funding a NFL stadium in a region that already has one and the proposal basically amounts to sentencing Kansans in the 2050s and beyond to be stuck with a stadium that has lost its luster and that never came close to bringng in enough revenue to justify its costs or the risks that investors took. Of course, I doubt that proposal will go forward without serious modification because it's so preposterous. The Chiefs weren't even asking for as much charity as the folks behind this proposal are offering. Kansans aren't that reckless, or at least not the part of Kansas represented by the majority will.

The Royals are the team that wants a new venue.

That does not even make any sense to court the team that wants to stay in their current venue and has a dozen dates a year compared to the one that says it wants a new place and has at least 81 dates.

This nonsense is so dead letter, if they meant business they would court the Royals and try to find a spot near State Line or a part of downtown KCK.

And, Carol Marinovich was very important part of the development that did happen. KCK does not have the unity and leadership to get things done like they did when Marinovich was a key figure.

[Kiimo]

jettio posting


https://youtu.be/XBZUz4C6kqk?si=N41hoCxyMiIeu7qs