STAR bond rate on Wizards Stadium funding favorable to community
The Unified Government of Wyandotte County/Kansas City, Kan., announced it will save taxpayers an estimated $1.21 million a year on the Kansas City Wizards Stadium and development project, thanks to a lower-than-expected interest rate on the Sales Tax Revenue (STAR) bonds.
Lew Levin, Unified Government chief financial officer, delivered the news to the commission during a presentation at a special session Thursday, May 6. The final interest rate acquired for the sale of the STAR bonds was 6.07 percent and was scheduled to close Wednesday, May 12.
“We were able to fully fund the project given a complex financing structure,” said Levin. “We received a competitive interest rate and the project had a strong appeal across the investment community.”
The estimated interest rate for the STAR bonds was 6.25 percent. However, the recent passage of the 3/8 cents sales tax increase by voters in April combined with a Better Business Bureau rating in the investment category by Fitch Ratings had a positive impact on the UG’s ability to acquire an even lower interest rate, Levin said.
“To be able to sell bonds at a low interest rate we just received during these tough economic times means that we’re on the right track to moving this city forward, providing opportunities for job creation today and in the future, and improving the quality of life for all our citizens,” said Mayor/CEO Joe Reardon.
In 2009, the Unified Government approved a more than $400 million deal to bring a major expansion of the Cerner Corporation and an 18,000 seat stadium to Kansas City, Kan. The more than $400 million total public/private investment was financed in part by $147 million in STAR bonds. The bonds are scheduled for pay off by 2021, but based on revenue estimates, are projected to be retired in 2017 assuming continued revenue growth in the Village West area.
Officials have said the Wizards Stadium deal will bring in a combined nearly 10,000 jobs to Wyandotte County.