Field Station: Dinosaurs

After months of intense publicity culminating in a high-profile city council vote of approval July 26, the city’s dinosaur park and STAR bonds issue may seem to have disappeared.

But that’s not the case – it’s just gone quiet for a while.

As City Manager Kathy Sexton put it: “We are awaiting their decision.”

The city’s documentation for its $29.2 million STAR bond request has been submitted to the state, which needs to approve it to proceed.

It can also reject it, and in that case, the deal is done. There is no appeals process, say state officials.

STAR, or Sales Tax and Revenue bonds allow Kansas municipalities to issue bonds to finance the development of major commercial, entertainment and tourism areas. The sales tax revenue generated by the development is used to then pay off the bonds.

In Derby, the bonds are being viewed to spark a $159 million development project consisting of a dinosaur park, hospital and medical facility along with restaurant and retail outlets.

While its advocates say the bonds provide a financially risk-free method of development for cities such as Derby, its critics say all the risks are not fully explained, it shorts the state out of tax revenue in favor of developers, and it provides an unfair advantage for a select group of business owners and operators.

But those discussions are finished in Derby and now that the Kansas Department of Commerce has the application, it is reviewing it.

In general, the process takes 60 to 90 days, although that is only a range as the timeline varies by project, said Nicole Randall, department spokeswoman.

“The department will review the application as expeditiously as possible, while also being thorough and careful in reaching a final decision,” she said.

The final decision rests with Secretary of Commerce Antonio Soave; however, he makes the final decision after consulting with experts on the matter along with agency staff.

Unlike the city, which held required hearings on the bonds, the department doesn’t hold any public hearings on the matter.

And just because the city of Derby approved the bonds, it doesn’t mean the state will, too.

“The secretary has a responsibility to the state and its taxpayers to invest in a prudent manner,” Randall said. “Not all projects submitted are approved for STAR bonds funding.”

If a project has “questionable financial and economic merits,” or doesn’t meet legal requirements, the Department will not approve it, she said.

Soave’s review also includes an independent feasibility study to determine if a project meets all of the criteria required by statute.

That includes being a regional attraction that is projected to draw visitors from out of state – and even across the country.

“It’s important that the project bring new visitors and new revenue to the state rather than draw visitors and revenue from surrounding areas,” Randall said.

The project also has to be financially viable and spur economic growth in Kansas, she said.

Economic development is what the examination comes back to time and time again, as that’s the heart and soul of the undertaking.

Randall calls it the “primary consideration.”

She said department analysis shows that they have proven to be beneficial.

According to Randall, STAR bonds projects have:

  • Generated more than $3 billion in capital investment.
  • Created more than 10,000 direct jobs.
  • Brought in 10 to 12 million new visitors to the state every year.
  • Produced an annual economic impact of more than $770 million.

Derby’s bond request is for $29.2 million, but that could vary, as Randall said it’s relatively common for an approved amount to be different than the requested one.

STAR bonds are due to expire in June 2017.

There has been talk of making changes to them, including restricting their use to areas within a short distance of the state’s borders in order to ensure that they are designed to pull visitors into Kansas, but as to whether changes will be made, or whether they’ll be back or not, is an issue that’s up to the Kansas Legislature.

For more on STAR bonds and to view the Department of Commerce’s annual report on them to the Kansas Legislature, go to