The Unified Government Commission voted unanimously Thursday night to settle its legal fight with the state over the Kansas City Chiefs stadium.

Commissioners rescinded the home rule charter ordinance they passed Oct. 8 to exempt the UG from parts of the state’s new sports authority law. In a second 10-to-0 vote, they amended their February STAR bond pledge. The change drops three conditions the state wanted removed and grows the local pledge area from about 240 acres to about 440.

Neither action takes effect right away. The UG’s outside attorney said it probably would not make the ordinance effective by publishing it until a written settlement with the state is fully signed.

Settlement terms

Todd LaSala, the UG’s outside economic development attorney from Stinson, walked commissioners through the terms. The UG filed suit against the state, the Kansas Sports Facilities Authority, and several legislative officials on Oct. 9. It dropped the case on Oct. 26, but it did so without prejudice, meaning that it could be refiled at any time.

The dismissal, LaSala said, “really has opened the door for a bunch of good conversations with the state.”

Under the deal, the Board of Public Utilities keeps its claim to serve the stadium. The authority can pick another electric provider, but that provide has to compensate BPU. BPU will supply the stadium’s water. A contractual payment for that service will match the BPU payment in lieu of taxes (PILOT). Commercial development around the stadium will pay the normal BPU PILOT.

The UG gives up land use approval over the stadium itself, but the stadium authority will consult with UG departments. Other improvements on the site will go through normal local approvals, and the UG agreed not to attach unrelated off-site costs. The commercial development will be subject to normal zoning requirements.

The state also reconfirmed its previous commitment to pay for the Central Avenue Bridge, estimated at $135 million, and it limits the property tax exemption area to 355 acres. The state will exempt the Quindaro Ruins area from the STAR bond district, keeping it eligible for a future project there. The mayor will get a seat on the sports authority board. The UG will also get one of five seats on the community impact committee.

The UG will dismiss the suit with prejudice only after those steps happen.

LaSala said the UG’s pledge is limited to the local sales tax and transient guest tax inside the pledge area. The state pledges its share of sales tax from nearly all of the rest of the county. He said the larger local area should not change revenue projections much, because the stadium design takes up more land.

By UG estimates, the local pledge would be worth about $120 million if the bonds pay off in 12 years. It would reach $256 million at 20 years and $447 million at 30 years. The team’s own study puts those figures higher, up to more than $600 million at 30 years.

“I don’t really know what it’s worth,” LaSala said of the projections.

Commissioner Andrew Kump (At-Large District 2) said nothing in the pledge area produces sales tax now, which makes forecasts hard. “I’m a lawyer and they’re confusing for me,” he said of STAR bonds.

Kump called the bridge commitment “a huge win for us.” In February the money was not yet budgeted, he said, and a future Legislature could have changed course.

Case for reaching an agreement with the state

Commissioner Christian Ramirez (District 3) asked LaSala directly whether the agreement satisfied each condition commissioners had written into the February ordinance.

“I think we have adequately checked the boxes,” LaSala said.

Commissioner Evelyn Hill (District 4) asked what the UG had gained. LaSala pointed to the BPU and PILOT terms, land use, the board seats, and the Quindaro and KU carve-outs. He said the bridge was a promise the state had already made in February, and he praised the state as a good partner after the lawsuit.

“We’ve always wanted this stadium to be here,” he said. “It wasn’t ever an issue that we had with the stadium itself. It was these details and how it lands and what our role is in the process.”

Andrew Ferris, BPU’s chief financial officer, said the terms let BPU either serve the stadium or collect payment from whoever does. “This does largely serve BPU’s purposes of what we were trying to accomplish,” he said.

Commissioner Andrew Davis (District 8), who voted against the original pledge in February, said he had changed his mind. He said he considered the taxes the UG keeps, including the EMS and public safety sales taxes and property taxes on ancillary development, plus the bridge.

Davis said his hesitancy had always been about profitability, since stadium deals are widely seen as money losers. “I would say we have something that is historic for the size of our community,” he said. “What we are getting back is absolutely astounding.”

He said the pledged sales tax is only an estimate. “What is not an estimate is that per this settlement agreement, we’re getting $135 million worth of infrastructure that we could not come up with ourselves,” he said.

Commissioner Carlos Pacheco (District 5) credited the February conditions with bringing the state to the table. “I think we’ve gotten to a point that we may not have gotten to without the leverage that we created in our original ordinance,” he said.

Pacheco also urged the commission to decide in advance how it will use future stadium revenue, such as for property tax or debt reduction. “We have to come up with an actual spending plan for the money that comes from these things,” he said.

Guarding against a reversal

Commissioner Phil Lopez (District 6) asked what would happen if the state changed the terms after the UG acted.

“We do this and then they switch up the game on us, right?” Lopez asked.

LaSala said the written agreement is not yet signed, but the parties agree on its substance. If a signed settlement never arrived, he said, the UG could refile its lawsuit, and the commission could rescind Thursday’s actions before publication.

“Until we have a fully executed settlement agreement, we’re not dismissing that lawsuit,” he said.

Lopez said the UG had been run over once and wanted to avoid it happening again.

Earlier, Davis had asked LaSala to explain why no settlement appears in court records yet. LaSala said the next steps are a signed agreement, the state’s changes to the district and board seats, and then a dismissal with prejudice.

Pacheco then moved to approve the rescission with the condition that it not take effect until publication. Commissioner Bill Burns (District 2) seconded, and the vote was 10 to 0. Pacheco moved to approve the amended pledge ordinance, Burns seconded, and it also passed 10 to 0. That ordinance needed no added condition, because its own terms make it effective only on publication.

Mayor Christal Watson thanked commissioners, staff, BPU, the state, and the Chiefs.

“Each of us has a voice and has always had a voice that mattered, but we came together and we listened,” Watson said.

Bonds and sewer loan approved

Commissioners approved six financing items, each by a 10-to-0 vote.

Three items cover up to $29.4 million in general obligation bonds for projects in the 2027 budget. They include $10 million for fire station improvements, roads, bridges, and overlay. Another $18.5 million goes to sewer projects under the federal consent decree.

Chief Financial Officer Shelley Kneuvean said the bonds fit the UG’s debt strategy. That strategy, she said, is “to reduce the amount of debt and not issue new debt until we retire debt.”

Commissioners also approved a $67.5 million state revolving fund loan for consent decree work to reduce combined sewer overflows in three areas. The loan will be repaid from sewer rates over 20 years.

Two more items authorized utility revenue bonds for BPU. A resolution set a $75 million maximum, and the ordinance authorized $65.1 million for improvements. The ordinance also lets BPU refinance existing bonds, for a total of up to $451.1 million, if interest rates changes will produce savings.

Audit response

Kneuvean also presented the UG’s response to an October report from the Legislative Division of Post Audit, requested by Rep. Carolyn Caiharr.

She said the audit found county funds went to appropriate uses that benefited residents countywide. She called claims of $40 million in missing money “completely and wholly inaccurate.”

“What is this, just like bad journalism?” Davis asked.

Kneuvean said one budget page had a table that did not match the other two. “It was a clerical error, that’s it, but it was an error of $40 million, so I don’t want to minimize that,” she said. The budget office has added an automated tool to reduce manual data entry.

The audit did find one problem with highway money. A 1970 state law requires the county to set aside 10 percent of its special highway funds for unincorporated roads, and the UG had not. Kneuvean said the money still went to roads and bridges, but Edwardsville, Bonner Springs, and KCK received more than the statute allows. The only unincorporated area left, near Loring, has 39 residents.

Kump said following the formula would mean spending about $5,100 per Loring resident, compared with about $12 per person in KCK.

“It’s kind of asinine to spend $5,000 per person in one part of the county and the rest of the county gets a fraction of a fraction of that,” he said.

Ramirez said staff should put a change to the statute on the UG’s legislative agenda, since the UG should follow state law until it changes.

Commissioner Chuck Stites (District 7) thanked Caiharr for requesting the audit. “This kind of transparency and looking into processes, I think, is something that we should continue,” he said.

Other business

Before the stadium votes, commissioners met in executive session. Topics were a recent civil verdict and litigation over a proposed economic development project. Davis confirmed the withdrawal of a resolution to create a citizen oversight board for a proposed countywide sales tax.

Commissioners approved the consent agenda 10 to 0. It included:

• An installment purchase of automated resuscitation equipment from Zoll Medical for the Fire Department’s EMS division.
• A $4.9 million federal grant, with no local match, to install 118 crash-rated bollards at three pedestrian entrances around Sporting Kansas City’s stadium.
• A Health Forward grant for the Public Health Department.
• The appointment of Matt Watkins to the Landmarks Commission, and Dannetta Pappert and Pat Pettey to the Library Board.

Three American Rescue Plan Act recipients described their projects. Young Women on the Move used a $619 thousand grant to renovate the education wing of its building on Parallel Parkway. KU Medical Center’s Project Eagle opened two Head Start classrooms for 34 more children. The Village Initiative bought three houses, expanding its transitional housing for people leaving prison.

Davis and Commissioner Melissa Bynum (At-Large District 1) both served on the ARPA selection committee. Davis said most of the money went to areas east of I-635.