Kansas City, Kansas weighs Margaritaville hotel, more incentives at Schlitterbahn site

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A massive redevelopment of the former Schlitterbahn water park would receive more incentives as it adds new projects, including a Margaritaville hotel.

Robb Heineman, a former CEO and current part-owner of Sporting KC, this week presented an updated plan for his Homefield development to a committee of the Unified Government of Wyandotte County-Kansas City, Kansas.

The most substantial change is the addition of an $85 million, 250-room Margaritaville resort hotel. Named after Jimmy Buffet’s song of the same name, that chain is known for big, yet laid-back properties. Margaritaville has resorts at popular destinations like Lake of the Ozarks, Nashville, Palm Springs and the Bahamas.

Heineman noted the brand just opened a new hotel in New York’s Times Square last year.

“We’re tickled to death,” he said. “...Conceptually, it’s one of the hottest things going on in the United States right now.”

The popular Schlitterbahn water park opened in 2009, but business declined sharply after a 10-year-old boy died on the 17-story Verruckt water slide in 20016. The slide was torn down and the park sat unused since 2019.

Described as a “youth sports mecca,” the wider Homefield development will focus on youth sports development facilities and fields for large tournaments. It will also include new hotels, apartments and retail.

Heineman said work has already begun on some $75 million worth of new construction for the site, which sits just northeast of the intersection of Interstates 70 and 435 in western Wyandotte County. Those initial projects include a new Fairfield Inn, a Camping World store and a 270-unit apartment complex.

The Unified Government approved a development agreement with Homefield in November. That agreement called for the awarding of $130 million in Kansas STAR bonds, a controversial incentive program that redirects sales taxes to help offset the cost of major projects, to Homefield.

But a Unified Government committee this week endorsed plans to expand incentives for the company. It will now seek up to $150 million in STAR bonds, which must be approved by the Kansas Department of Commerce.

The local government will also consider construction sales tax exemptions and Community Improvement Districts, special sales taxes collected within a geographic area that can help offset costs of projects. UG officials said the company would seek a 2% tax for the Margaritaville property.

Additionally, the Unified Government will give 70 acres of property it owns at the site for free to Homefield. The local government previously asked the developer to purchase that land for $3 million.

The Unified Government will actually use the first STAR bond issuance to pay off older STAR bonds. The state in 2013 awarded $85 million in STAR bonds to help fund improvements at the Schlitterbahn park. But those bonds are now at risk of default and Wyandotte County could owe millions if they are not repaid.

“They will be wiped off the books,” said Todd LaSala, a local attorney representing the unified government. “So, the risk of us having to come out of pocket to back those bonds will disappear with the first issuance of STAR bonds. And that’s a big deal to us.”

As part of the new agreement, the developer has also agreed to increase its pledge to invest in downtown and other urban areas of Kansas City, Kansas. Though no specific projects have been identified, Homefield upped its promise from $3.75 million to $4.35 million.

Heineman told commissioners on Tuesday that his company has signed a partnership agreement with Perfect Game, which scouts baseball talent and organizes amateur tournaments. As part of that agreement, Heineman said, Perfect Game is required to bring 75,000 hotel room nights to the area each year.

He said the wider development, which sits near the Kansas Speedway and Village West, continues to gain interest from developers.

“The nice thing is we still have a lot of land out here,” he said. “And we have interests that are popping up every day and they’re across the board.”

While some commissioners had questions about specifics, the amended development agreement was easily passed through the commission’s economic development committee on Tuesday. The full board of commissioners will vote on the measure next week.

“It was long overdue that we got rid of the eyesore that was out there,” said Chuck Stites, who represents that portion of Wyandotte County. “I’m proud to have that out there.”

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