State greenlights funds for Overland Park entertainment district

? The state has committed to $49.4 million in public financing for this Kansas City suburb’s proposed entertainment district, which would include an 8,000-seat arena.

But before it can use special bonds that would be repaid by sales taxes in the district, the city must meet nine conditions set by state Commerce Secretary Howard Fricke.

Fricke has set an April 28 deadline.

One key requirement is for the city to reach an agreement with the developers of the $151.2 million project.

RED Development has requested $30 million in tax incentives from Overland Park. That includes $6 million to buy the arena site, although the city would own and operate the arena.

“This is a huge boost,” said Greg Musil, an attorney for the developers and a former member of the City Council. “Having this allows everything else to now fall into place. The rest of the financing aspects are in the hands of the city as opposed to the state.”

An additional $71.8 million for the project would come from RED Development; the city would have to provide most of the remainder.

The City Council has approved a nonbinding letter of intent with the developers, giving the two sides a negotiating tool. In it, the city agrees to consider guaranteeing $25 million in bond debt, abating $5.5 million in property taxes and creating a 1-cent sales tax within the district.

Another letter has been approved with Centerplate, the Spartanburg, S.C., company that would manage the arena. The management company has offered to put $4 million into the project.

The Kansas City Knights minor league basketball team and Kansas City Comets indoor soccer team have said they would move to the arena from their current homes in Kansas City, Mo.

Also in Kansas, the adjacent suburb of Olathe has been trying to put together an arena project since mid-2000. That project received state approval in September for about $50 million in bonds, but developers had hoped to receive approval for about $159 million. The city is still negotiating, spokesman Tim Dannenberg said.

Meanwhile, Kansas City, Mo., has plans for a downtown arena with 18,000 to 20,000 seats. Voters on Aug. 3 approved a $170 million bond issue to cover part of the expected $225 million cost.