photo by: Sylas May/Journal-World

Jeff White of Columbia Capital Management addresses the Lawrence City Commission on Tuesday, Oct. 13, 2026.

What’s the worst thing that can happen? That’s what a group seeking a STAR bond district for an arena, a flight school and other developments on the edges of Lawrence asked the City Commission on Tuesday night.

That’s what Commissioner Kristine Polian wanted to know, too – what’s the worst that could happen if the city approved that district that would capture millions of dollars of sales taxes generated by Lawrence’s new Costco store?

“I would like a worst case,” Polian said. “What happens if we set the district without knowing what will be built and without knowing what the market will sustain?”

Ultimately, the commissioners agreed that the worst case was too risky. They agreed 5-0 that they didn’t want the district to include Costco – which the developer had said was necessary for the project to proceed as currently envisioned.

As the Journal-World has reported, STAR bonds are a tool from the state of Kansas that can use local and state sales tax revenue to finance entertainment- and tourism-related developments. The group, led by Wichita developer Phil Bundy, was proposing a district for the bonds that wrapped around the city’s southern and western sides, and then extended a bit to the east to take in the Costco store, which opens on Oct. 29 and is not affiliated with Bundy’s group.

All the commission was being asked to determine on Tuesday was whether the district should include the Costco, not to make a final decision on the district or the project itself. But Curt Petersen of the law firm Polsinelli shared some details about it on behalf of Bundy’s group.

As the Journal-World has reported, the project would have included, among other things, a multipurpose arena with a velodrome track for competitive bicycle races; youth sports facilities for Sporting Kaw Valley; and a flight training center, which Petersen said the developers were in talks with the airport and the International Organization of Women Pilots about.

Petersen said the developers had tried to listen to the community’s concerns, including by moving development out of the areas nearest to the Wakarusa River. He also said that even if the district were formed this year, the only time the developers would be owed anything was when they had a project plan approved.

But he and the city’s advisers also said that if the city waited too long after Costco’s opening, the STAR bond district wouldn’t generate as much revenue for the developers whenever they got started.

Commissioner Mike Dever said that the timing was important for the community, too. It’s “a monumental time in our city” with a Costco opening, he said.

He said that Costco was the culmination of more than a decade of planning. The city could either take its winnings from that, he said, “or we could borrow against the sales tax dollars … and hope that the plans of this developer come to fruition.”

“I don’t think we as a community can sit back and divest ourselves of these dollars,” Dever said.

photo by: City of Lawrence

This map shows a proposed STAR bond district for The 1059 and Beacon Landing, including the new Costco store.

•••

When Polian asked about the worst case, Jeff White of Columbia Capital Management, the city’s municipal advisory firm, urged caution.

White said the Costco was a “unicorn” investment and “a generational contribution to your sales tax base.” And he urged the commissioners to think about the STAR bond project as an investment of that Costco money. He said they should consider whether they’d have enough information to invest in the project if they were being asked to put their own money in it.

“It feels rushed. It feels under-described,” White said. He envisioned that in the worst-case scenario, “you create a district, you create an expectation that the Costco sales taxes are going to go and invest in something, and you don’t get anywhere near the level of investment that the developer has promised.”

The commissioners, he said, should consider “what you’re giving up.”

“The consequence of all that is that you don’t have this incredible resource that fell on Lawrence from the sky,” White said, “in the form of a Costco generating regular sales tax receipts.”

But Petersen had a different view of the worst-case. “When the district’s formed, you owe us nothing,” he said. “… You can change the purpose, you can amend the district all you want, it can sit there for 14 years and do nothing.”

“You haven’t started the clock,” he said. “You’re not any worse for wear.”

Petersen said Polsinelli had worked on other STAR bond projects in Kansas, and that in his experience, where the project was currently at was not unusual.

And, while STAR bonds are meant for tourism-based developments and can’t be used to build housing, Petersen said the incentive would be a “supercharger” for development west of the South Lawrence Trafficway. Bundy’s group was planning to build hundreds of millions of dollars worth of single-family and multifamily housing to the west of the SLT, and Petersen said the STAR bonds would help pay for the infrastructure buildout needed in that area.

Most people in Lawrence “really want to see the west built,” he said, and then asked: “What do we need for that?”

“Tons and tons of infrastructure … Utilities, streets, everything you need over in the west.”

•••

Commissioners had other questions, as well, including about the flight training center component.

The developers were proposing building that at Lawrence Regional Airport, but Commissioner Amber Sellers asked why the STAR bond district map that the commission was provided doesn’t include the airport. Petersen said that would require county approval, because the airport is “an island” separated from the city by unincorporated areas.

And Vice Mayor Mike Courtney wanted to know whether Bundy’s group had experience with doing a project this large. Petersen replied that they hadn’t done a project this big, but that compared to developments they’d done before, “It’s just a longer one, more land.”

But their biggest questions were about the risks, and after hearing from the developers and their advisers, they decided they couldn’t jeopardize the Costco revenue.

While Polian said she liked the idea of Bundy’s project and of growth, “at the end of the day, I just think it’s too risky for us and this is too rushed for us to put Costco in the STAR bond.”

“We currently need those revenues,” she said. “It’s our best chance at balancing our budget, helping us pay down debt that we’ve already issued … Fingers crossed that it doesn’t happen, but if we have an economic downturn, we’re going to need those revenues.”

Courtney agreed. “The developer at Costco put their own money into the project,” he said, and it wasn’t right to take the tax revenue from it and devote it to another developer’s project.

“For me, Costco’s out,” Courtney said.

While staff will no longer be considering the Costco district, the project is not necessarily over. Staff said in a memo to commissioners that if the commission voted no, the city could “continue working with the developer regarding other potential approaches.”

Sellers said she wanted to see on Tuesday night was the alternative plan was if Costco weren’t in the district. And, in her opinion, the developers hadn’t shown the commission that.

“The fact of the matter is,” she said, “there isn’t an alternative.”