Five years ago, the Derby City Council decided to take advantage of a state program (STAR bonds) designed to encourage partnerships with cities and businesses to (1) stimulate the economic welfare of Kansas communities and (2) increase tourism and visitors from outside the state.

Although the program in Derby is still in its infancy, the community already has benefitted from millions of dollars of private capital invested in Rock Regional Hospital and state tax revenue invested in streets and water infrastructure and attractions like Derby Sports Zone (under construction) and Field Station: Dinosaurs. Many people are excited about the BMX pump track and climbing facility scheduled to break ground in 2022.

STAR bond projects in Derby involve no increases in taxes or new taxes. STAR bond projects are paid for using mostly private investments from the businesses involved and also some future sales tax revenues earned within the STAR bond district. Mostly, STAR bonds are a way for the state to invest in business development with the intent of long-term payback in tax revenues.

Most cities in Kansas provide some type of financial incentives to assist certain businesses with construction or expansion, often partnering with state incentive programs. In Derby, we use very few tax incentive programs commonly provided in other communities (CID increases in sales tax, TIF property tax incentives, HPIP income tax credits, CDBG grants, etc.) The STAR bond program is our primary tool.

A final phase of STAR bonds is being proposed now to provide a Marriott hotel with a year-round water play attraction (perfect place for a destination wedding!), glamping, several restaurants, apartments and possibly senior housing.

Businesses participating in the STAR bond program add to the property tax base beginning in their first year of operation, which means STAR bond projects are an excellent return on investment for the city, the state, and other governments that rely on property tax funding (Derby schools, the El Paso cemetery district, and Sedgwick County).

Keep up-to-date on the final phase of STAR bonds at DerbyKS.com/star.

Kathy Sexton
City Manager

Published in the Derby Informer on Dec. 1, 2021.