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Prairiefire and STAR Bonds – 3 takeaways from critical appraisal of state auditors

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A Kansas State Auditor’s Analysis released this week offers a scathing assessment of the state’s sales tax and revenue bond program, or STAR, with a particularly critical eye on the use of bonds for the Prairiefire Museum in south Overland Park.

The audit concludes, in part, that it could take decades for the state to recoup the diverted sales tax revenue for Prairiefire and that ultimately the site along 135th Street would have grown anyway. without the help of STAR bonds.

What are STAR bonds?

Overall, STAR Bonds – which have captured the attention of Kansas lawmakers and local officials for years – have provided over $ 1 billion in funding for 20 different developments statewide since inception. of the bond program in 1993.

The stated goals of these STAR bond-funded projects are to create “tourist attractions” that attract at least 20% of their visitors from outside of Kansas and 30% of their visitors from at least 100 miles away.

But the new audit conducted by the Kansas Legislative Division of the Post Audit concludes that only three of the 16 attraction auditors examined met those targets, fulfilling the Kansas Department of Commerce’s goal of boosting tourism.

Listeners closely evaluated three specific STAR bond attractions, including the Prairiefire Museum in Overland Park, 5801 W. 135th St.

Here are three takeaways from the Prairiefire audit report:

State could wait decades to recapture embezzled sales tax revenue for Prairiefire

Auditors believe Overland Park could generate enough tax revenue to withdraw its STAR bonds by 2032.

After that, auditors say it could be between 2046 and 2104 before Prairiefire generates enough revenue for the state to recoup the misappropriated sales taxes to issue the $ 65 million STAR bonds to develop the project.

Based on the auditors’ report, Prairiefire also failed to meet the STAR requirement targets of attracting 20% ​​out-of-state tourists and 30% 100 miles away.

“I like that we set ambitious goals, but these seem very, very ambitious to me,” said Sen. Ethan Corson, Democrat of Prairie Village, at a committee meeting this week outlining the findings of the audit. “I am afraid that we are setting a standard that we can never realistically reach.”

Due to the modest number of out-of-state visitors the Prairiefire Museum receives each year, the audit concludes, the project does not generate many new sales taxes, resulting in the breakeven estimate. expected over several decades.

Prairiefire provided local benefits, but didn’t really attract tourists

Prairiefire likely has local value as it improves the region’s quality of life by providing new amenities, according to the audit.

The museum helped stimulate local employment growth, capital investment and boosted tax revenue. This, in turn, may continue to have additional economic effects for Overland Park, according to the audit.

Yet, according to listeners, that doesn’t mean Prairiefire is helping generate new tourism revenue for the entire state of Kansas.

Economic research suggests that local visitors to attractions like Prairiefire are generally likely to displace existing economic activity from one part of Kansas to another, according to the report.

It also suggests that people are probably spending similar amounts on entertainment regardless of where they are doing it.

For example, according to the report, if the Prairiefire area hadn’t been built, it’s possible that visitors to Missouri would have gone to other entertainment areas in Kansas instead.

Even without the STAR bonds, Prairiefire would probably still have developed

The Prairiefire district was an underdeveloped area before STAR Bonds boosted the project, but citing Overland Park officials in their report, auditors said the area likely would have grown without STAR bond financing at a given time anyway.

Prairiefire is part of the city’s growing dining and retail corridor along 135th Street, and listeners said they assumed the site would have developed in the same way as the rest of the surrounding area here. 2025 and would have generated sales taxes as it does now without the use of STAR. obligations.

The report states that Kansas likely would have earned most or all of the state’s revenue in the district, even without the STAR bond financing, although it may have grown later.

Overland Park City manager Bill Ebel said in a response to the audit that he disagreed with this part of the report.

While Ebel said he agreed that the Prairiefire district likely would have grown without STAR bond financing, before it had the potential to simply be office space.

“Therefore,” he said, “it is debatable that just because the district was likely to grow, it would have earned most of the sales tax revenue in the district even without the bond funding. STAR.”


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