Though details of a potential big development on the east side of Garden City aren’t ready for public disclosure, the initial ideas from two sets of developers provided to Garden City officials and the Kansas Department of Commerce have proved enticing enough for the state to consider allowing use of Sales Tax Revenue Bonds to help finance them.
STAR Bonds are a financing tool reserved for major commercial, entertainment and tourism endeavors capable of being a statewide and regional destination. The attraction must not only be high-quality and innovative, with unique features that will increase tourism, they must generate significant, positive economic impacts that are sustainable and diverse.
The districts work by allowing municipalities to issue bonds to finance the development that will be paid off by capturing an increment of the future sales tax revenue from the defined area.
This week, the Garden City Commission voted to set the boundaries of a STAR Bond district covering approximately 312 acres of land from the Tangeman Sports Complex northeast to Schulman Crossing, and undeveloped land from the shopping center east to Jennie Barker Road. A public hearing is scheduled for Dec. 16.
A general description of potential developments is vague, but listed at the top is a major, multi-sport athletic complex, something that has been included in the city commission’s annual goals for several years.
The identities of the two interested development parties aren’t being released yet. However, City Manager Matt Allen said both groups are aware of the other and have talked to each other. Both are serious about development and have expressed more than just a cursory interest.
Allen said the city wouldn’t have taken the initial step of setting the district boundaries this week had there not been a certain level of interest expressed by the developers, and an interest expressed by the state.
“That said, there still isn’t a detailed description of a project for the commission to consider. But there is certainly enough interest that all the parties involved felt it warranted taking step one,” Allen said.
The Legislature created the STAR Bond program 20 years ago. Two of the more high-profile projects in the state that used STAR Bond financing include the Kansas Speedway and the Village West shopping and entertainment district in the Kansas City area, projects that both cost hundreds of millions of dollars.
Garden City’s project likely won’t rise to the level of a NASCAR venue, but STAR Bonds also have been used by smaller cities in the state, such as Manhattan and Goddard.
Goddard started working on its STAR Bond project two years ago. Earlier this year, it received the go ahead from the state to use $25.4 million in STAR Bond financing toward a $155 million project to build a 66,000-square-foot Olympic quality swimming complex operated by the International Swimming Hall of Fame, build a 150-room hotel and conference facility, create several baseball and softball fields, as well as other retail, commercial and dining establishments.
The state estimates the Goddard project will create 400 full-time jobs with an $8.6 million annual payroll, and will generate $154 million in retail sales at full build-out.
Goddard City Administrator Brian Silcott said the city started planning the project more than two years ago out of a desire to grow its commercial base and attract business and retailers to Goddard, a suburb of Wichita with about 5,000 residents.
“The biggest thing we’ve had happen is a Walmart Supercenter. We lack a downtown, so it was a good fit for us. They’ve been a good community partner for us, and that’s obviously a big component of our STAR Bond district,” Silcott said.
Goddard did a lot of homework about its needs and worked with developers to identify good fits. Eventually, a developer identified a need for a large-scale aquatic facility.
“When I say aquatic facility, I’m not talking about a Schlitterbahn or water park. We’re talking an honest to goodness natatorium that will hold regional Olympic, NCAA, USA, USA Master competition events,” he said. “This will be a unique facility. There are comparable ones on each coast, but nothing like this in the interior of the U.S.”
Silcott said the city already has seen the proposed development start to bear fruit in attracting additional development to Goddard.
Currently, the city is reviewing site plans for the development and expects to break ground next year, with completion expected to take a full two years.
Manhattan used $50 million in STAR Bonds as part of a $200 million downtown redevelopment project.
“It was a piece of a larger effort undertaken by the city,” Deputy Manhattan City Manager Jason Hilgers said.
The STAR Bonds helped build the Flint Hills Discovery Center and were used for land acquisition, infrastructure, streetscape, a portion of a parking garage, and a park area. The bonds were awarded in 2006, issued in 2009 and the Discovery Center opened in 2012.
Hilgers said the facility has met expectations in terms of being a community asset and tourist attraction, though it is still finding its way in reaching its full potential.
“We’re real close to projections for operations, visitation and revenues. We may be underperforming a little bit in terms of revenues generally, but we’re pretty much in our infancy in getting the program established, ramping up programs,” he said.
Generally, the state indicates STAR Bond financing should make up less than half of total project costs. To be eligible for STAR Bond financing, a project must also generate at least $50 million per year in taxable sales revenue, and generate a minimum of $50 million in improvements.
According to the Department of Commerce criteria for using STAR Bonds, to be considered a major, unique destination attraction, at least 20 percent of total annual visits should come from out-of-state visitors, and a significant portion, at least 30 percent, of yearly visits should be drawn from greater than 100 miles.
While it’s important to stress that there is no specific project on the table yet in Garden City, the idea of a multi-sport complex keeps coming up.
Kim Inderlied, Finney County Convention and Visitors Bureau executive director, said such a facility would be huge if built.
“I have my fingers tightly crossed that it would include not only sports, but a facility where you could host conferences and trade shows, all kinds of stuff,” she said.
The CVB also has expressed an interest for some time in seeing a multi-use facility built in the community. Inderlied said the city’s capital improvement committee, which she serves on, has ranked such a facility high on the list.
While Inderlied is not privy to what has been or might be proposed to the city, like others she is anxious to hear more.
“I don’t know the details, but I know that similar projects built under programs like this include Bricktown in Oklahoma City, the Waterfront in Wichita. This is really about a development that draws people in. If it’s like I’ve envisioned, then it’s absolutely huge,” she said.
During early stages of the project that ultimately became Schulman Crossing, the city considered the possibility of using STAR Bonds for the financing. Ultimately, however, it turned out the final version of that project could move forward with tax increment financing and the city’s local investment in creating the Schulman Avenue intersection near the bypass.
Allen agreed that given the nature of eligibility requirements, if a project moves forward using STAR Bond financing, it would need to have a large scope. Allen is uncertain of the potential developers’ timeline or when more details about their plans might be made public, though more specifics will be presented before the city commits to any project that might come along.
“At such point the city is asked to move forward with an actual project, it would be my expectation that the parties are known, the project is fully described,” Allen said, both for the city commission’s and the public’s benefit.