Fact Check: Kansas Stays Losing BILLIONS On Stadium Deal

Today we want TKC reader "Randy" to take the lead if only because he is a generous soul and has crunched the numbers for us. 

The crux of his well-researched commentary . . .

KANSAS TAXPAYERS ARE FINANCING BILLIONAIRE CLARK HUNT WITH SO MUCH CASH THAT ECLIPSES ANY ALLEGED ECONOMIC IMPACT!!!

The numbers aren't pretty and this deal doesn't even really qualify as a job creation scheme if only because it's such a drain on Kansas finances . . . Check the commentary that we're taking out of the comments in order to highlight:  

AWESOME TKC Reader: Damn, the boys in Topeka are sure smart. 

Assuming a AA (good) quality grade, the current interest rate paid to municipal bond holders on large accounts is about 4.5 percent.

Assuming a 30 year payout, that means bondholders will get their loan amount back (on average) at $100 million per year, plus about $4.5 million per year in interest. This means Kansas will have to come up with $104.5 million per year for 30 years in *extra* tax receipts just to break even

Amortized over 30 years, that means Kansas will pay bondholders about $5.5 billion in principal and interest.

By the way, do you know how much sales income is needed to generate $104.5 million in tax revenue at the 8 percent rate? Try $1,312,500,000 each year. That has to be an *extra* $1.3 billion in revenue just for this thing to break even -- each year for 30 years.

Now, I'm just a dumb Kansan, but given the speedway (only $250 million in bonds 20 years ago) attracted new hotels, restaurants and other businesses, how many more businesses do the folks in Topeka think will come with the new stadium? Afterall, it's not like races and football games are held on the same weekend. (Fun fact: the speedway holds a lot more people than a stadium.)

To get $1.3 billion in *extra* annual sales tax revenue at least half of Kansas, maybe all of it, will have to become a special tax district.

This assumes no inflation or cost overruns. If the Chiefs decide they couldn't possibly live without solid gold faucets, start thinking about up to double the numbers above.

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