A major milestone has been reached in the initiative to create a stunning new arena and state-of-the-art practice facility for the Kansas City Chiefs in Kansas, as the project has successfully passed its initial legislative hurdle.

On Tuesday afternoon, a significant decision was made when the Kansas House of Representatives voted 84-38 in favor of a bill that establishes a Sales Tax and Revenue (STAR) bond district. This district will facilitate the funding and construction of new facilities that could potentially house up to two professional sports franchises. Following this, the Kansas Senate also voted overwhelmingly, 27-8, to approve the measure, demonstrating strong bipartisan support.

During the House debate, Rep. Sean Tarwater of Stilwell passionately urged his fellow legislators, asking, “Are you going to step up today and take a leap of faith and make this happen – keep them in the metroplex and bring money to Kansas?” His call to action reflects the urgency and significance of this legislative decision for the future of professional sports in the region, as reported by the Kansas City Star.

Kansas Governor Laura Kelly is anticipated to give her approval by signing the bill into law, which would mark a pivotal step in the endeavor to secure a new home for the Chiefs.

Following the vote, the Chiefs organization released a statement, expressing their optimism regarding the outcome.

When the initial proposal was introduced earlier this spring, it was aimed at enticing either the Chiefs or the Kansas City Royals—or perhaps both—to relocate across the state line into Kansas. This initiative gained traction after Jackson County voters rejected an extension of a 3/8 cent sales tax, which would have ensured the teams remained at Arrowhead Stadium for at least 25 more years, creating a significant opportunity for Kansas.

The Kansas legislation has been designed to accommodate the potential development of facilities for teams in various professional sports leagues. However, the current Major Professional Sports Franchise (MPSF) bill specifically restricts eligibility to NFL and MLB teams, mandating that qualifying teams must be “adjacent” to Kansas. This effectively narrows down the list of potential beneficiaries to just the Kansas City Chiefs and the Royals.

On Monday, representatives from both teams addressed the legislative hearings, marking a historic moment of engagement with Kansas lawmakers regarding the proposal. This interaction signifies the teams’ serious consideration of the opportunities presented by the new legislation.

“Missouri spoke [and] Jackson County spoke. They had their opportunity,” remarked Chiefs’ representative Korb Maxwell, emphasizing the importance of Kansas stepping up to provide a viable solution for their franchise. “But now there’s a moment for Kansas to step up and [provide] an option for us all here,” he added.

“This STAR bonds legislation you’re considering offers a very good opportunity for us to explore an option in the state of Kansas,” stated Royals envoy David Frantze, as reported by the Kansas City Star.

Both teams recognize the significant advantages that this new proposal presents. They are only required to cover 30% of the overall construction costs, which are projected to be between $2 billion and $3 billion. This is a substantial reduction from the normal requirement of 50% that STAR bonds typically impose on developers. Consequently, each team would only need to contribute between $600 million and $900 million towards the total expenses, making the project more financially feasible for them.

The financing for this ambitious project would be sourced from issuing STAR bonds to private investors, who would take on all associated risks. Currently, local, county, and state governments have not provided guarantees for these bonds. Investors would be reimbursed through sales tax revenue generated from the STAR bond district over a period of thirty years, which is longer than the typical 20-year lifespan of STAR bonds, offering an extended opportunity for returns.

Additionally, the revenue streams from the MPSF district’s state alcohol taxes (in excess of existing earnings) and funds from the state’s Attracting Professional Sports to Kansas Fund—derived from the state’s annual lottery income—could also be pledged to ensure bond repayment. Moreover, local and county governments within the district may choose to allocate their sales tax revenues towards these payments, providing further financial support for the initiative.

While STAR bonds have proven effective in financing projects like Wyandotte County’s Kansas Speedway and Children’s Mercy Park, there are concerns among critics regarding the sufficiency of revenue generated by these projects.

“When the project fails to generate enough sales tax revenue to cover its debt, future lawmakers will have to decide to bail out the project with additional taxpayer dollars or have the state’s creditworthiness take a hit,” warned University of Colorado-Denver professor Geoffrey Propheter in a social media post. He highlighted the potential consequences, stating that such an event “may increase the state’s future borrowing costs — and residents’ cost for debt-financed goods and services.”

Legislators may also consider issuing bonds that would be repaid directly from the state’s sports gaming and lottery revenues. Advocates believe these alternative revenue streams could facilitate the creation of bonds worth up to $1 billion, providing a solid financial backbone for the project.

Despite these strategies being proposed as a way to finance the arenas without using taxpayer dollars—Rep. Tarwater referred to it as a “destination tax” to fund the arenas—there has been considerable opposition among both Democrats and Republicans in the state legislature. A significant number of Kansans have also expressed their dissent.

“This is the first time in my legislative career that I have ever seen district opinion, constituent opinion, at a dead heat,” noted veteran Overland Park Rep. Stephanie Sawyer Clayton, conveying her uncertainty about her vote in an interview with the Kansas City Star.

Ultimately, Clayton chose to support the bill.

Once the governor signs the bill, it will officially become law on July 1. If no team has taken advantage of the opportunities provided by the legislation, it will expire on July 1, 2025. This timeline gives the Chiefs and Royals a limited window of one year to decide whether to relocate to new facilities across the state line or find a way to remain in Missouri.

In response to the Kansas legislation, Jackson County lawmaker Manny Abarca has already initiated a counter-move in the ongoing Missouri-Kansas border conflict. On Monday, he introduced a resolution to establish a countywide 3/16-cent capital improvement sales tax, which will be put to vote during the upcoming November general election. The aim is to “retain the Kansas City Chiefs sports team in Jackson County,” showcasing the competitive nature of the situation.

The defeated 3/8-cent sales tax extension in April would have allocated funds between the Chiefs and Royals. Abarca’s proposal introduces a sales tax that is half of the amount that was previously rejected, effectively pitting the two teams against each other at the ballot box.

Abarca also intends to propose alternative resolutions with the same goal, which must be finalized and approved by the county legislature by August 27 in order to be included on the November ballot.

As this situation unfolds, Missouri legislators may also become involved in the discussions and decisions regarding the future of these teams.

In a recent interview with the Star, Missouri House majority leader Jonathan Patterson of Lee’s Summit indicated that his colleagues might not rush to respond to the Kansas legislation.

“I think after the primary [election], we will be able to look at possibly having a special session to address this issue,” he stated. “Before the primary, there would be a lot of politics involved in this — and I think once that’s out of the way, it’ll make it easier for us to come up with a plan.”

With the Kansas bill now a reality, the question remains whether the Missouri legislature will prioritize this issue. We are on the brink of discovering the next steps in this unfolding saga.