NFL's Chiefs Get Largest Public Funding Package Ever For New Stadium In Kansas
The Kansas City Chiefs have decided to leave the stadium that has served as their home for more than 50 years, lured by more than $2B in taxpayer money.
The NFL franchise has signed an agreement to build a $3B domed stadium in Wyandotte County, Kansas, $1.8B of which would come from state taxpayer funding, Kansas Gov. Laura Kelly and the team announced Monday.
The team, owned by the Hunt family, also plans to develop a new training facility and headquarters in Olathe in Johnson County, and both projects would anchor mixed-use developments with hotels, residential, retail and offices. Kansas could provide nearly $1B in additional funding for that project, all financed by bonds issued by the state.
“This is a game-changer for Kansas, and it’s a signal to America and the world that our state’s future is very bright,” Kelly said in a statement.
The Chiefs would be responsible for developing a stadium with at least 65,000 seats and covering 40% of its costs, as well as any overruns beyond a $3B budget, according to a term sheet of the deal released by the state.
No site has been selected yet.
The combined cost of the nonstadium development would be at least $1B, $300M of which would come from the construction of the team headquarters and training facility. The state has agreed to fund $625M toward those projects. If the ancillary development cost reaches $1.5B, the state could provide $975M of that funding, according to the term sheet.
Along with the practice facility and headquarters, the term sheet calls for the development to include an entertainment venue, hotel, retail and restaurant spaces, office space, a community facility, medical facilities and residential, 10% of which would be designated as affordable or workforce housing.
The public funds would be issued in the form of sales tax and revenue bonds, and the stadium would be owned by the state and leased to the Chiefs, with annual rent starting at $7M a year.
The Chiefs agreed to open the stadium in time for the 2031 NFL season. The associated development is expected to be completed no later than 2038, according to the term sheet.
The Chiefs' lease at Arrowhead Stadium in Kansas City, Missouri, runs until 2031. The team has played at the facility — renowned for reaching ear-splitting decibel levels — since 1972. It has been the setting of a recent run of dominance by the team that has resulted in three Super Bowl victories since 2020.
“This will give Chiefs kingdom a state-of-the-art facility for multiple generations, a building that can last for at least 50 or 60 years. We believe it's the best thing for the region,” Chiefs owner Clark Hunt, son of team founder Lamar Hunt, said, according to ESPN. “It will give Kansas City the opportunity to bid on events that we can't host right now, like the Super Bowl, the College Football Playoff and the NCAA Final Fours.”
Missouri voters rejected a $2B subsidy package last year that would have funded new stadiums for the Chiefs and Kansas City Royals.
“I think we are seeing ourselves in a hypercompetitive moment, with local jurisdictions, with our neighbors, with border communities,” Kansas City Mayor Quinton Lucas said Monday in prepared remarks. “I think that is incredibly regrettable long-term for Kansas City.”
In recent years, most stadiums have been built as anchors for large districts with retail, hospitality, and even housing and offices, all controlled by the teams.
The real estate value created by these projects has led team valuations to skyrocket. Forbes estimates that the value of Major League Baseball's Atlanta Braves, which developed The Battery around their stadium in Cobb County, has doubled from $1.5B when the stadium opened in 2017 to $3B this year.
The public funding for the Chiefs' yet-to-be-named facility is by far the most ever handed out for a stadium project. It exceeds by several hundred million dollars the previous record of $1.3B that the Tennessee Titans were approved for in 2022 for a new stadium in Nashville.
While taxpayer financing for stadiums has come under scrutiny for diverting resources to subsidize developments owned by billionaires, their use and size have only increased in recent years.
Washington, D.C., agreed this year to fund $1.1B toward a $3.8B stadium and entertainment district to lure the Commanders back after the team played in Maryland for decades. New York struck a deal in 2022 to provide $850B to the Buffalo Bills for a stadium in Orchard Park, where the team plans to move next year.
The absence of public financing from Illinois has complicated the Chicago Bears' search for a new stadium — and surrounding mixed-use district — to replace Soldier Field. The team spent nearly $200M on 326 acres in suburban Arlington Heights for a stadium, but CEO Kevin Warren said last week that the Bears are now considering a move to Indiana because of a lack of public subsidy.
