Yesterday, after only a few hours of discussion and zero public hearings, the Kansas state house voted 84-38 to approve a bill to pay for up to 70% of the cost of new stadiums for the Royals and Chiefs; the state senate voted 27-8 to approve the measure shortly afterward.
As discussed yesterday, the bill authorizes the sale of bonds starting at $700 million for each stadium project, and with no upward limit, to be repaid with a combination of sales tax kickbacks and state lottery money. Additional details include:
- Once Gov. Laura Kelly allows the bill to become law, either by signing it or by declining to veto it, the decision of where to build a stadium and how much to pay for it will be up to one state official, Kansas secretary of commerce David Toland (who is also the lieutenant governor). He would then have to get it approved not by the full legislature, but only by an eight-person Legislative Coordinating Council that includes House and Senate leaders from both parties. And the council would be able to debate the stadium projects entirely in private before voting publicly.
- The bill would allow a STAR tax-kickback district to be created around any team facility, meaning if the Chiefs move their practice facility to Kansas as well, there could be as many as three districts where all new sales taxes are redirected back to the team owners.
- Some state legislators wondered if the Chiefs and Royals would be able to apply for additional subsidies as well, such as PEAK, which kicks back payroll taxes to businesses that relocate to the state. “We don’t have all the details of this,” said state Rep. Henry Helgerson.
- The Kansas City Star, in an otherwise good article, included asides that “the vote represents a major bet by Kansas that both teams and their sports will remain popular, economically viable enterprises into the second half of the 21st century” and that “the broad support for the plan reflected a clear desire to ensure the Chiefs and the Royals don’t leave the Kansas City region,” neither of which exactly makes any sense: Kansas can lose tons of money on this deal even if the teams remain popular, and neither the Chiefs nor Royals have discussed leaving the Kansas City region.
- Speaking of not making sense: “Sen. Rob Olson, an Olathe Republican, predicted that a new stadium would host a Super Bowl within a few years. Discussing the potential revenue the event would bring in, he called the proposal a ‘gold mine for Kansas.’ ‘We owe it to the Kansas City Chiefs if they want to come to Kansas,’ Olson said.” Um, no.
Both Chiefs owner Clark Hunt and Royals owner John Sherman were noncommittal after the vote about taking Kansas up on its stadium offers, and it seems very likely that this will be just the beginning of a cross-border bidding war. (Missouri House Majority Leader Jonathan Patterson said any counteroffer will likely wait until after the August primaries, because “before the primary, there would be a lot of politics involved,” which is a polite way of saying “we don’t want people holding us responsible for our stadium vote on election day.”) This would be in apparent violation of a truce agreed to in 2019 by Kelly and Missouri Gov. Mike Parson to stop poaching each other’s businesses with tax breaks — that agreement is supposed to be legally binding, though it also expires next year, so Kansas may just have to wait a few months to make an actual offer to the team owners.
Tl;dr: Kansas elected officials just dropped a $2.45-billion-and-up subsidy package on the table to lure the Chiefs and Royals across the border, with no public debate, despite it being against the law. There’s a lot to be said here, but suffice to say that predictions the national tide was turning against giant stadium subsidies following the defeat of the Royals/Chiefs sales tax referendum and the Virginia arena proposal may have been just slightly premature.
Fitch, Moody’s and Standard & Poor’s;
Downgrade Kansas.
A Kansas Super Bowl seems pretty unlikely. Not nearly enough high end hotel rooms, smaller airport, transportation issues, not to mention the unpredictable weather that time of year.
The recent cities “gifted” a Super Bowl for opening a new stadium (Indianapolis, twin cities, New York) had hosted other large scale events before. They could handle events that size.
Yeah, that makes sense. I get the sense that maybe the NFL is leaning toward just staying with the old standbys. I think the next three Super Bowls are New Orleans, Santa Clara and LA. Maybe not that order. I forget.
That reminds me of a question I had recently that somebody might know about.
When a city bids for an event like an NCAA tournament regional or finals – in any sport that has neutral site events – what does it have to offer in terms of promises? What kind of financial risk is it taking and who exactly is taking that risk?
I assume something as big as the Super Bowl is negotiated by the mayor or even by the state, but what does, for example, Grand Rapids have to do to get something like an NCAA hockey regional? What risk is the city taking they assuming and who exactly is on the hook for it?
I believe Neil has covered this a few times. The NFL asks for a lot of free (to them) stuff. After paying for logistics and security, cities spend millions to get back thousands in extra sales taxes. But the substitution effect? The “gold mine” holds only fools gold…..
I know about the Super Bowl. The bidding for that is political and front page news in the relevant cities.
I was wondering about smaller events where some board somewhere is putting together a bid and nobody locally knows much about it until it happens.
And then when the city/town does get named as the host, the media will always frame is as an unmitigated good because it just looks like a bunch of people stayed in the hotels and ate at the restaurants and had a good time and what could be bad about that?
Maybe it is good in most of these cases, but it’s so rarely remarked on or covered that the public does not really know the cost-benefit.
“The NCAA is renting out the Indiana Convention Center for just a fraction of the estimated $1.2 million cost and occupying Lucas Oil Stadium rent-free as it hosts the massive March Madness tournament downtown, two of several incentives that Indianapolis has offered to host the 67-game tournament.
The deals for the facilities, finalized last week and obtained by IndyStar, charge $84,000 for renting various halls, ballrooms and lobbies in the Convention Center, roughly 7% of the estimated price.
Meanwhile, the NCAA will use the attached Lucas Oil Stadium rent free, offering the city’s Capital Improvement Board a percentage of various revenues made during the tournament.”
https://www.southbendtribune.com/story/news/2021/03/18/his-is-what-indianapolis-offered-in-incentives-to-host-the-ncaa-tourname/116620420/
(That’s from 2021, when Indianapolis hosted the entire tournament thanks to the pandemic.)
The NFL has standards for hotels within a reasonable distance to the stadium, practice facilities for both teams etc etc.
Smaller events have their own standards. As far as NCAA hockey regionals go- a willingness to host is about all it takes. They don’t really do on campus regionals anymore and bigger NHL type buildings don’t want to host because the attendance is very questionable (weird start times, might get stuck without a popular regional team).
Which is why the NCAA needs to go back to on-campus hockey regionals. The current setup is embarassing.
And Kansas City did just build a brand new airport terminal FWIW.
I don’t know the right answer for fixing the NCAA regionals. On campus might help, but a major problem is to satisfy ESPN the early games are played in the middle of the week in the afternoon. I think the really amazing thing would be to identify a city/region and hold the entire tournament there. The downside is you’d kind of be stuck rotating it between the Twin cities, Denver, Boston. But I think Tampa, maybe Vegas, Phoenix, LA could be interesting. It would be almost like a World Cup type environment, lots of games, it would be very appealing for the die hard fans and they could plan things out years in advance instead of just getting a weeks notice.
While they did build a new terminal- it was more to fix the old terminal that was made obsolete by 9/11. It hasn’t exactly expanded the number of flights to the airport. nFL bigwigs and their advertising partners won’t be arriving to the Super Bowl on Spirit or Southwest.
I would change it if it were up to me, but I can assure you that the people running things are not embarrassed. It’s 100% intentional. It’s debated every single year at the coaches meetings and among the few dozen reporters that actually cover college hockey and it is not going to change because the coaches of the smaller schools don’t want to change it.
There are such enormous – and growing – structural inequalities in college sports, they want to give the lower seeds more of a chance to get an upset in the first round.
I think their better argument is planning. It’s no problem logistically for AHL teams to host a regional if they can plan for it. It is not always the best for attendance, perhaps, but at least they can accommodate it without much trouble.
If it were always hosted by the higher seed, the school would have to hold those dates and somehow block out hotel rooms for an event that might not happen. If they’re expecting 10,000 people to show up, that could be a problem for schools that aren’t in big cities.
The worst idea – which the NCAA has used in some sports – is for pre-determined campus sites to host. Then if that team makes it, they may get to host a regional even though they may not be the top seed in that regional.
And if the host is not in the tournament, then it’s just another neutral site and there’s no particular advantage having it on a campus over a bigger city that would be, possibly, easier to get to for people from out of town.
Most NCAA finals are in major markets now, but there are still a few events where the expected attendance is such that it just makes sense to do it on a campus because that’s the right-size facility.
Men’s gymnastics, men’s volleyball, and women’s hockey all do that. Maybe there are others.
KC was provisionally awarded a Super Bowl a decade+ back providing voters approved a retractable roof that would’ve been able to slide from Arrowhead to Kauffman. Voters approved renovations but rejected the roof.
An NFL stadium with a retractable (or permanent) roof could land a Super Bowl and a Final Four. But, the economic benefit to the state/region would pale compared to the cost to the public treasury. The major benefit would be the “Ooooh, we host big time events here” feeling. Not sure that’s worth the monetary cost.
Not a fan of the subsidy at all, just disagreeing with the assertion that KC wouldn’t get a Super Bowl if they had a roof. Then again Kansas didn’t retain any leverage here to demand one like Minnesota or Indianapolis so who knows.
I can’t even imagine the cost of a sliding roof that would alternate in covering either stadium!
I just don’t think these people are ever going to get it.
So, if you’re an elected official…is the play solely that you can say, “Look what I helped do! I helped you feel good that your team didn’t move, because football and baseball are important!” ? In hopes you can run on that?
Like…if Kansans’ lives get markedly and obviously worse from the standpoint of state services and taxes and things…how is that not bad for electeds? Or do sheep not notice, and just like the idea that their tax dollars went to keep Patrick Mahomes playing on your side of an arbitrary line?
I just…am baffled by the lack of long-term thinking. Do electeds REALLY just believe that this incredible amount of state spending is somehow “fiscally conservative” as long as they can somehow claim it creates some outlandish number of jobs and inflated estimate of economic activity?
“Do electeds REALLY just believe that this incredible amount of state spending is somehow “fiscally conservative” as long as they can somehow claim it creates some outlandish number of jobs and inflated estimate of economic activity?”
Pretty much. Or they think that “fiscally conservative” means giving money away for no good reason, but to the *right* people.
Politicians don’t know anything about economics, they just know they can run on SAYING they created jobs.
Wait until people in rural western Kansas find out they’re paying for 2 government-subsidized sportsball palaces located 300-400 miles away at the other end of the state.
Because fixing the real problems takes a long time and requires a coordinated approach at all levels of government and society – crime, poverty, housing, even traffic and urban development. All of these can only be changed over many years or, in some cases, many decades, not a few years.
But politicians have just a few years to show results or they get voted out.
The business and labor interests that fund campaigns want a quick ROI. And the “swing voters” are easily impressed by “results” touted on campaign ads.
So we just get the same old short-term “fixes” that don’t fix anything – tax cuts (or even tax raises), money for sports stadiums, more police (not better police, just more of them), more military weapons for police, more lanes of traffic, more parking, more jails, more casinos, etc. The list is long.
And, as Neil has mentioned several times, people tend to be a lot more motivated by keeping what they already have than by hoping to get something better that they haven’t seen yet.
Losing a local sports team is psychologically distressing. All the things that money could pay for instead might actually be a lot better, but we can’t see those things, because they don’t exist yet and may never exist. So people just stick with the devil they know.
And I suspect a lot of people just assume that the whole system is so corrupt that if that money doesn’t go to sports stadiums, it will just go to some other pork-barrel boondoggle so they’d rather it just go to something they can see and enjoy.
“And, as Neil has mentioned several times, people tend to be a lot more motivated by keeping what they already have than by hoping to get something better that they haven’t seen yet.”
When did I say that? There’s a behavioral economics principle that’s somewhat related — assuming we still believe in behavioral economics now that Dan Ariely turns out to have falsified data — but I don’t recall ever having made that claim in relation to stadiums and voting patterns.
The suburbs are a great place for a football stadium, but the baseball stadium should be downtown.