Bonner Springs is giving more than $200 million of tax incentives for Mattel Adventure Park. City officials say it will boost the local tax revenues. But a public finance expert says the deal will mostly cost the state, according to KCUR.
A theme park spotlighting famous toys, including the Barbie brand and Hot Wheels, is slated to come to Kansas, powered by the state’s sales tax incentive for major developments.
Bonner Springs officials in October approved a large tax incentive package to help the $540 million development of Mattel Adventure Park in Wyandotte County.
The park will be built near an entertainment district in Kansas City, Kansas. That area already features shopping and sports venues, and it will likely be the new home of the Kansas City Chiefs’ new $3 billion stadium.
It’s another major development project to which the state has committed future tax revenue through the Sales and Tax Revenue incentive, also known as STAR bonds. Those are loans secured by a municipality that are paid off through state and local sales tax revenue generated by the project. Sales taxes collected in the special district go to paying back the bonds instead of being collected by governments.
But if a project were to fail, municipalities do not have to guarantee the bonds, meaning the investors who provided the loan may ultimately be on the hook for them, not taxpayers or the developers. That’s what happened when a STAR bond project in Overland Park defaulted on its loan, according to the Kansas City Star.
State officials have also argued that STAR bonds create new tax revenue to fund the projects and do not use existing dollars.
But Zach Mohr, a public finance expert at the University of Kansas, said these kinds of major developments are still tying up the state’s future revenue.
