Lawrence city commissioners unanimously agreed to start the process of issuing $40 million worth of industrial revenue bonds that will provide property and sales tax breaks for the proposed Rock Chalk Park.
Commissioners at their Tuesday evening meeting approved a “resolution of intent” to issue industrial revenue bonds for the Kansas University portions of the proposed sports complex planned for the area just north of the northeast intersection of Sixth Street and the South Lawrence Trafficway.
The industrial revenue bonds will qualify the project for a sales tax exemption on all construction materials purchased for the project. City officials on Tuesday estimated the exemption will relieve the project of about $885,000 in sales tax payments.
The bonds also qualify the project for a property tax abatement for all the structures at the facility, which is proposed to have a track and field stadium, soccer field, softball stadium and other amenities.
Tuesday’s action, though, did not grant the property tax abatement, but rather starts the process. That process will include a cost benefit analysis by the city, a review by the city’s Public Incentives Review Committee and another separate vote by the City Commission.
The city doesn’t yet have an estimate on the potential value of the property tax abatement. The project would have automatically been exempt from property taxes if Kansas University was proposed to own the facilities.
But instead, a private for-profit entity, Bliss Sports, led by Lawrence businessman Thomas Fritzel is scheduled to own the facilities for 50 years as part of a financing arrangement with the Kansas University Endowment Association and KU Athletics.
The private ownership makes the project ineligible for the automatic property tax exemption given to state-owned property. The $40 million in bonds will be issued by the city, but the legal obligation to repay them will rest with Bliss Sports, the city's bond counsel told commissioners.
None of Tuesday’s action involved a proposal for the city to build a $25 million regional recreation center adjacent to the KU facilities. Commissioners are still scheduled to discuss potential agreements for that project at its Feb. 19 meeting.
At least one commissioner, Mike Amyx, has expressed concern with the recreation center portion of the project. But he voted for Tuesday’s items, saying he was not opposed to the KU portion of the Rock Chalk Park proposal.