photo by: City of Lawrence

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

Tuesday’s Lawrence City Commission meeting could be a pivotal one for developer Phil Bundy’s 1059 and Beacon Landing STAR bond projects – and for the city’s future finances.

No, the commission won’t be voting yet on whether to establish that incentive district, which could help the Wichita developer build a destination cycling arena, a flight training center and other attractions. But it will be asked to resolve one of the biggest questions around the proposed district: whether Costco should be a part of it.

The new Costco store, which opens on Oct. 29, isn’t affiliated with Bundy’s group, and it won’t be affected by the district one way or another. What would be affected are the sales taxes it generates and where they go.

STAR bonds are a tool from the state of Kansas that can use sales tax revenue to finance entertainment- and tourism-related developments. They are more powerful than other types of development incentives because they can capture state sales taxes, and the state charges more sales tax than local governments do.

Bundy’s group is proposing a district for the bonds that wraps around the city’s southern and western sides. The southern part of the development is called The 1059, and the western part is called Beacon Landing. From there, the district extends a bit to the east to take in the Costco store. If that district were to win approval, it would divert most of the sales tax revenue generated by the store.

Staff is asking city commissioners whether it should keep evaluating the plan that includes Costco. If commissioners say yes, they’ll also be asked to set a public hearing for Nov. 17 about establishing the STAR bond district. If they say no, staff could still work with the developer on other approaches to the project.

Bundy’s group has said that the purpose of having Costco in the district is to provide the initial sales tax revenue to help sell the bonds. Earlier this year, when the district was proposed, the developers had said it would be much harder to do the project without Costco in the district.

And now, city staff says the developers will need Costco in the STAR bond district to continue the project as currently envisioned.

“The developer has indicated that Costco-generated revenues are necessary for its current STAR bond financing structure and has requested that the City continue consideration of the proposal with Costco included,” staff’s report to the commission says.

The city’s municipal adviser, Columbia Capital Management, has been reviewing the developers’ application, and its estimate of the STAR bond proceeds is smaller than what Bundy’s group is estimating. Columbia’s preliminary estimate is about $144 million, while the developers had estimated about $182 million.

Whatever the proceeds end up being, a district with Costco could have big implications for the city’s budget in the near term.

As we’ve reported, the Costco store or some other major retail development like it has been envisioned in west Lawrence since the city invested millions in public funds in Rock Chalk Park in the 2010s. The idea was that the sports complex and recreation center would draw retailers to the area, and that these would generate sales tax revenue for the city in turn.

City leaders have said they expect the new Costco will play an important role in Lawrence’s finances. Back when Bundy’s group released its plans for the STAR bond district, the City Commission had questions about Costco’s inclusion, and Vice Mayor Mike Courtney said that the city government’s “execution phase” would depend on the store’s success.

We’ve also reported that Lawrence has been lagging behind the state’s other major retail markets lately in sales tax collections. In the most recent sales tax numbers, from September, Lawrence was down 0.7% in its year-to-date collections compared to the same time in 2025. The city had projected that sales taxes would grow instead, by 1.6%.

On the other hand, there are reasons the city might want the district with Costco to move ahead. It would mean that millions of dollars a year that would otherwise go to the state would instead go toward these projects in the community.

While the STAR bond proceeds can’t be used for housing, a lot of housing is included in the plans for Beacon Landing. The development would include hundreds of millions of dollars worth of single-family and multifamily housing, and the STAR bonds could be used for infrastructure that would support both the housing and the tourism components.

The developers have also said that they intend to make Lawrence a destination for major sporting events, especially in cycling. The plans for Beacon Landing include a multisport arena with a velodrome track designed for competitive bicycle races. The 1059, meanwhile, would have six outdoor turf fields and one indoor one for the Sporting Kaw Valley youth soccer club, as well as convertible basketball/volleyball courts. Bundy’s group has said that these facilities could bring more youth sports tournaments to the community.

One new element in the plans is a “flight training facility,” which is mentioned in the commission’s agenda packet. Bundy’s group has sent out communications about a “Centennial Flight Center” that would provide training for pilots and aviation maintenance workers. It would be a partnership between the developers and The Ninety-Nines or International Organization of Women Pilots, and it would focus on training women who are beginning their careers in aviation.

The City Commission meets at 5 p.m. Tuesday at City Hall, 6 E. Sixth St.