10-03-2025
Kansas House members scrutinize Senate plan to rehab malls with STAR bonds
Rep. Bill Sutton, R-Gardner, seen during a March 5, 2024, session of the House, questioned the merits of trying to redevelop malls that might be empty for cultural reasons. (Sherman Smith/Kansas Reflector)
TOPEKA — Members of a House committee on Monday scrutinized a Senate plan to expand the use of STAR bonds to redevelop struggling malls.
The proposal is part of Senate Bill 197, which would extend the state's STAR bonds program through 2028 with revisions that include the elimination of eminent domain authority and new requirements for recording visitor data.
The Senate passed the bill 32-8 on Feb. 19, with eight Republicans opposed.
Sen. Jeff Klemp, R-Lansing, testified before members of the House Commerce, Labor and Economic Development Committee, where he revealed that he was responsible for adding the mall development provision to the bill. He said he had the dilapidated mall in Leavenworth in mind, and that more than a dozen other malls across the state would meet the criteria for a STAR bond project.
'The goal would be to drive in outside folks to come into that mall,' Klemp said.
Several members of the committee expressed concern with including malls in the expansion of the state STAR, or sales tax and revenue, bond program, which sunsets on July 1, 2026, without legislative action.
STAR bonds are an economic development tool using state and local sales tax revenue generated by a project to pay off the bonds that finance it. There are 17 STAR bond districts in the state, ranging geographically from the Amelia Earhart Hangar Museum in Atchison to the Dodge City Boot Hill Museum. There are four in Kansas City, including the Kansas Speedway.
Under SB 197, an existing mall would be eligible for a STAR Bond project if 50% of the space were unoccupied. The redevelopment project would require a minimum capital investment of $10 million.
'When we're talking about STAR bonds for mall rehab, what's the idea here?' asked Rep. Bill Sutton, R-Gardner. 'We're not building malls, are we? What is it? What is it we're wanting to do with these STAR bond projects, as it relates to an old mall?'
Rachel Willis, director of legislative affairs for the Kansas Department of Commerce, which administers the STAR bonds program, said communities across the state are 'seeing vacant, or mainly vacant malls' that formerly had been a main attraction for the community.
'So how can we help serve them and revitalize that to become again an attraction like it once was,' Willis said.
Sutton responded: 'Are we taking into consideration that the reason that they're dilapidated and empty might be a cultural issue? And further investing into a system that's out of fad doesn't seem to make a lot of sense to me.'
Willis said the idea was not to 'just redevelop that mall and make it a mall again.'
'It's how can we redevelop that particular space, those buildings, into an attraction that does fit our cultural needs now, based on how everyone is shopping and the experiences folks want to have within those communities,' Willis said.
Among other provisions, the bill would allow the commerce secretary through Dec. 31 of this year to approve a vertical construction within an existing STAR bond project in cities with a population below 60,000.
It also would eliminate the authority that city and county governments have to use eminent domain to acquire property for a STAR bond project, and prohibit the use of tax increment financing, or TIF, districts on top of a STAR bond project.
Opponents to the bill objected to a new requirement that all entities within a STAR bond district record visitor data, including ZIP codes, at the point of sale — which may not be possible for some small businesses.
The bill also would require the online disclosure of the project's feasibility study, financial guarantees of the prospective developer, and other data within 90 days of a project being adopted.
